Health Care Reform: A Case Study

With so many changes in healthcare and the call to attention to reduce costs hospitals have been at the center of discussion in regards to health care reform. Many hospitals have gone out of business while others have simply gotten bigger and merged due to the complex and fundamental changes in deliveries care. Despite a history of strength and stature in America, the hospital institution is in the midst of massive and disruptive change (Houle and Fleece, 2012).
One of the single biggest changes to the growth of hospitals as well as to the decline of hospitals has been the increasing use of pay for performance models or value based purchasing strategies by both private health plans and government agencies.
The objective of pay-for-performance initiatives is to link reimbursement quality and efficiency as an incentive to improve the quality of healthcare, as well as reduce systemwide costs. Government agencies and private health plans are continuously establishing programs that encourage hospitals, physicians, and other providers to meet quality standards providers who can demonstrate improvement in care and more efficient performance stand to reap financial rewards with approximately

30% of all healthcare spending going to hospitals, payers have particularly targeted hospitals to reduce costs(Shi, L. & Singh, 2012, pp. 177).
Because the pay-for-performance programs have been so instrumental and important to our changes in healthcare, many hospitals have aligned their focus to meet targets set by these incentive-based programs. As a way to deliver better care, many of these hospitals or hospital systems have merged in order to better deliver care to the surrounding communities and populations that they serve.
In 1946, Congress passed a law that gave hospitals, nursing homes and other health facilities grants and loans for construction and modernization.

In return, they agreed to provide a reasonable volume of services to persons unable to pay and to make their services available to all persons residing in the facility’s area (http://www.hrsa.gov/gethealthcare/affordable/hillburton). Since the passage of that act, it helped further expand that number of hospitals to 7,200 by 1970. By the early 1990s that number steadily grew. But the demand for inpatient services sharply declined in the late 1990s with the introduction of managed care, the expansion of outpatient services, and the high costs of a hospital stay. During that time period, some hospitals were forced to merge or shut

down.
Recently in March, 2010, The Affordable Care Act was signed into law. While this act had many that it imposed, the single biggest target centered around hospitals and their ability to better manage populations and cost. The affordable care act mandated that hospitals in hospital systems be more accountable for the costs incurred to Medicare when it came to care of patients. Because of the monumental changes that this act impose many systems merged and others are struggling to stay in business. For those systems a have grown, it has been largely due to the quick adaptation of value based care, pay-for-performance models, more use or more integration of ambulatory models, and transitional care models. The lack of integration of these models has also cost certain hospitals or community-based hospital systems view ability to stay profitable and stay open.
As we move forward in 2014 the impact of government and private payers will directly affect the growth or the downsizing depending on efficiency of our hospital systems.