Joan D Krizack.

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fore, are located in the South, West, and Southwest^^; California, Texas,
Florida, and Tennessee claim the most.^^ Voluntary hospitals are still most
prevalent in the northeastern, mid-Atlantic, and midwestern states,
where the wide variety of religions and ethnic groups were able to amass
the necessary capital to fund hospitals in the late nineteenth and early
twentieth centuries. ^^


Hospitals differ from each other and from other institutions, not only by
their ownership and control but also according to the functions that they
perform. Four of the functions — patient care, health promotion, biomedi-
cal research, and education — replicate the broad functions of the U.S.
health care system, as shown in Table 1-1. The fifth function, administra-
tion, is not unique to hospitals but is a requisite function of all institutions.
It is important to understand all of these functions and their recordkeep-
ing implications in terms of the distinctions between hospitals and busi-

American hospitals are similar to businesses and have become more
so since the passage of Medicare and Medicaid legislation in 1965, which
created a large base of paying population for which hospitals competed.
Since the mid-1960s, nonprofit hospitals have been forced to adopt some
of the management activities, such as marketing, employed by for-profit


hospitals. ^^ It is not uncommon for nonprofit tiospitals today to have
marketing managers or marketing departments. Nonprofit hospitals were
again forced to adopt some of their for-profit counterparts' strategies in
1983 when the federal government changed its method of Medicare
reimbursement from "reasonable cost" to a fixed rate based on the
patient's diagnosis. ^^ Thus, all hospitals were forced to become more
efficient or lose money when treating Medicare patients.

Several important differences also set hospitals apart from businesses.
The major difference, and probably the one that has the most effect on
records creation, is the nature of the hospital's organizational structure.
Hospital organization is not strictly hierarchical but comprises two main
components: an administrative component and a clinical or medical
component. Each component is organized differently, and no theoretical
model integrates them.^°

The administrative component, which is responsible for hospital man-
agement, is usually organized in a strict hierarchical fashion. The organi-
zation of the medical component, which is responsible for patient care,
education, and biomedical research, is flatter, and its members typically
work in teams across departmental lines. To complicate matters further,
the two components overlap, and many hospital employees report to two
supervisors, an administrator and a physician. The chief technician of a
pathology laboratory, for example, generally reports to the physician in
charge of the medical operations of the laboratory and to the administra-
tor responsible for the laboratory's financial operations. Many hospitals
have a joint committee in place to bridge the gap between the medical and
administrative components. This administrative/medical dichotomy,
which is referred to in the professional literature as a "dual authority
structure," has also affected the credentials of hospital chief executive
officers, which seem to alternate between management and medical
degrees. The current trend in nonprofit hospitals is toward physician chief
executive officers.''

Another significant difference between hospitals and businesses is
that while businesses employ all the individuals on their staffs, physicians
who work in hospitals may not be employed by the hospital. In the past,
very few physicians were paid by hospitals; instead, hospitals extended
privileges to physicians to admit their patients. The patient paid two fees,
one to the physician and the other to the hospital for use of the facilities,
nursing care, diagnostic tests, medical supplies, and medication. In con-
trast, certain types of physician, such as radiologists and anesthesiologists,
have traditionally been employed by hospitals and receive a salary. Differ-
ent arrangements between physicians and hospitals are now common
practice, and hospitals routinely employ physicians individually or as


groups. Newer alliances between hospitals and groups of physicians,
called physician hospital organizations, are the result of pressures to
contain costs. Their main purpose is to contract with managed care
organizations (HMOs and preferred provider organizations) and self-
insured employers, and to manage health care delivery. To further com-
plicate the issue, physicians in teaching hospitals may also have an
appointment at an affiliated medical school. Whatever the arrangement
between physicians and hospitals, a two-pronged organizational scheme
is the prevailing pattern.

There are several significant differences between hospital patients and
consumers of business products and services. Patients are not always able
to comparison shop; they generally are not concerned with the cost of
health care, especially if they have health insurance; and they have little
control over what they are buying because the physician decides which
drug or procedure is best for them (although sometimes patients will be
offered a choice among a small number of treatment options).

Other differences between hospitals and businesses include the fact
that hospitals do not manufacture a uniform product or provide a uniform
service; rather, hospitals provide health care services that are tailored to
each patient. In addition, physicians significantly influence both the sup-
ply and the demand for a service or product, whereas in business supply
and demand are determined independently. Finally, in business techno-
logical advances are usually cost-efficient; in hospitals they are usually
not, since technological advances increase cost because specially trained
personnel are needed to operate new and often expensive diagnostic and
therapeutic equipment. '^ There may, however, be several departments or
services within a hospital that are run as businesses. Hospital pharmacies,
gift shops (often run by the auxiliary), and optical shops are examples. In
addition, a hospital's parent company may own for-profit businesses, such
as nursing homes, alcohol and drug treatment centers, freestanding emer-
gency centers, ambulance services, HMOs, doctors' office buildings, pro-
gressive care retirement communities, hotels, and parking facilities.

Hospital Organization The clinical activities of hospitals are usually
organized into medical departments or services, but there is no standard
organizational model. One of three criteria is generally used in defining
departments: (I) the organ or organ system that is treated, (2) the skill
involved, and (3) the age or sex of the patients. The number of medical
departments in a hospital varies according to the hospital's size and degree
of specialization, but most general hospitals include the following depart-
ments: anesthesiology, emergency medicine, internal medicine, obstet-
rics/gynecology, pathology, pediatrics, psychiatry/neurology, radiology/


diagnostic imaging, and surgery. More specialized medical departments
include ophthalmology, preventive medicine, and urology. ^^

The nonclinical activities of hospitals fall into six categories: govern-
ance, external relations, fiscal affairs, operations management, facilities
management, and human resources. Hospitals are often organized so that
vice presidents are responsible for these activities.

The following sections, organized by hospital function, discuss the
activities and mechanisms peculiar to hospitals, which archivists need to
understand to make sense of the resulting records.

Administration All institutions engage in administrative activities that
are necessary to conduct business. Hospitals are no exception; they engage
in activities related, for example, to institutional governance, fiscal man-
agement, personnel management, and research management, much as
other businesses do. Two hospital activities, however, accreditation and
regulation, warrant further discussion because they are complex and

Since 1952, hospital accreditation has been carried out by the Joint
Commission on Accreditation of Healthcare Organizations (JCAHO).
Representatives of five organizations make up the commission: the Amer-
ican College of Physicians, the American College of Surgeons, the
American Dental Association, the American Hospital Association, and the
American Medical Association. In accrediting hospitals, the JCAHO is
concerned with three areas: (1) quality of patient care, (2) hospital
organization and administration, and (3) hospital facilities. The accredita-
tion process consists of an extensive survey that is filled out by hospital
administrators and a site visit by a JCAHO accreditation team consisting of
a physician, one or two nurses, and sometimes a hospital administrator.
Hospitals may be accredited for three years with or without contingencies,
and hospitals that are regarded as "marginal" are publicly identified as
such. Beginning in mid- 1993, the JCAHO instituted unannounced sur-
veys of randomly selected accredited organizations to better gauge and
ensure compliance with commission standards. The surveys are con-
ducted at the midaccreditation point of a 5 percent sample of all organiza-
tions that participate in the three-year accreditation process. One sur-
veyor will conduct a one-day survey limited to the five performance areas
in which hospitals generally have the most problems: safety management,
life safety, medical staff appointment and privileging, infection control,
and governance. In 1995, the JCAHO will implement new standards that
are organized functionally instead of departmentally. Although the
JCAHO is a private organization and JCAHO accreditation is not man-
dated by law, Medicare and Medicaid legislation requires hospitals to meet


Standards equal to JC AHO standards to receive payment; thus, virtually all
hospitals seek JCAHO accreditation.

Hospitals are the most extensively regulated institution in the United
States.^'* Since the passage of Medicare and Medicaid legislation, hospital
regulation has increased dramatically. Before that time, regulations were
aimed mostly at the condition of the facility. Today, they have been
expanded to cover the quality and cost of care. Regulation of hospitals has
been described as lacking in "consistency, parsimony and clarity. "'' This
is because hospitals are regulated by a wide range of private organizations
(e.g.. Blue Cross and the JCAHO) and public agencies representing all
three levels of government, without any attempt at coordination. Often,
the regulations of different bodies conflict with one another.

Hospital regulation falls into four categories: ( 1 ) facilities regulation,
(2) planning regulation, (3) quality and appropriateness of care, and (4)
payment. ^^ All states require hospitals to be licensed, although the scope
of mandatory facilities regulation varies from state to state, and in some
states JCAHO accreditation guarantees state licensure. State licensing
regulations usually concern hospital organization (requiring an organized
governing body, organized medical staff, and administrator), the provi-
sion of certain specified services, and standards for facilities, equipment,
and personnel. State governments also have certain building code re-
quirements that apply to all facilities. These include regulations regarding
elevator and boiler performance, waste disposal, fire safety, and electrical
and plumbing facilities. In addition, hospitals are subject to state and
federal legislation that affects, for example, the dispensing of narcotics and
alcohol, the disposal of hazardous waste, radiation safety, water and air
quality, labor practices (including job safety), and educational require-
ments for teaching programs.

Planning is defined by the American Hospital Association as "an
orderly process for determining the health care needs of a specific popula-
tion and developing an appropriate health care capability to meet those
needs. "^^ The federal government was involved in hospital planning
regulation from 1946, when the Hill-Burton Hospital Survey and Con-
struction Act was passed, until 1986. This legislation provided for hospital
construction or renovation mostly in rural areas where there was a
shortage of beds. Currently, some states control capital expenditures for
construction, expansion, and modernization of health care facilities as
well as the purchase of costly technology, such as radiologic imaging
devices. The purpose of this legislation is to avoid unnecessary duplication
of services and to control costs. This certificate-of-need review process
involves considerable documentation and lengthy reviews at the local,
regional, and state levels.



The quality and appropriateness of care, the third type of hospital regula-
tion, has been in effect since the passage of the 1965 Medicare legislation,
which requires that the appropriateness and necessity of care provided to
Medicare patients be evaluated by an examination of patient records.
Because of this regulation, hospitals established quality assurance and
utilization review committees to monitor and analyze patient admissions,
length of stay, and allocation of resources. In 1972 the federal government
legislated the creation of professional standards review organizations
(PSROs) comprised of local physicians who were paid by the DHHS to
monitor physician behavior and evaluate the quality and necessity of
services covered by Medicare and Medicaid. Since 1984, the review
contracts have been awarded to peer review organizations (PROs), which
are nonprofit, community based, physician-directed agencies and have
more authority than the PSROs. One PRO per state reviews admissions
and re-admissions, validates diagnoses, and reviews exceptional cases and
quality of care. Each PRO has a contract with the Health Care Financing

FIGURE 2-2 Children's Hospital, Boston, 1990. A corner of the Hunnewell
Building is visible on the left. The thirleen-floor John F. Enders Pediatric Research
Building is located to the far right. Source: Children's Hospital Archives


Administration that specifies how it will carry out these activities. If
medical audits reveal unacceptable practice, the government does not
reimburse the offending hospital for Medicare patients. In many cases
hospitals participate in the review process through in-house professional
services review departments, which are monitored by the PRO.

The quality of care in hospitals is also regulated by several obligatory
committees that seek to ensure a high standard of patient care. These
committees are generally overseen by a hospital's Professional Services
Review Committee or another group with responsibilities for quality
assurance. They include the Credentials Committee (which ensures that
physicians have the necessary and appropriate credentials), the Infection
Control Committee, the Medical Records Committee (which reviews the
"content, appropriateness and timeliness"^^ of official patient records),
the Pharmacy and Therapeutics Committee (which reviews drug utiliza-
tion and patient responses), the Radiation Committee, the Safety Com-
mittee, and the Tissue Committee (which examines tissue removed from
patients to determine whether surgery was indeed necessary).

Whereas the other types of regulation indirectly aim at controlling costs,
the final type of hospital regulation, regulation of payment, directly influences
the cost of hospital services. At both state and local levels, retrospective
reimbursement has been replaced by prospective payment. At the state
level, payment regulation is sometimes controlled by a rate-setting commis-
sion that prospectively approves rates for hospital services. The federal
government controls rates for in-patient hospital care to Medicare and
Medicaid patients through diagnosis-related groups (DRGs). Historically,
only fees for hospital services were regulated; physicians were reimbursed
according to a system of "customary, prevailing, and reasonable" charges.
This changed with the adoption by federal regulators, some private insurers,
and other third-party payers of the recently formulated resource-based
relative value scale (RBRVS) for physician fees. Developed at the Harvard
School of Public Health, the RBRVS standardizes physician fees according to
three factors: (1) the duration and intensity of the work, (2) the cost of
providing the service, and (3) the cost of physician training. ^^

Just as hospitals are accredited by the JCAHO and licensed by the states,
health care practitioners are also licensed.*^ Licensure usually involves
fulfilling certain educational requirements and passing an examination.
Which of the numerous health care professions require licensure, however,
varies among the states. In most states the hospital is responsible for
ensuring that medical and technical personnel meet governmental stan-
dards; therefore, hospitals often employ registrars whose function is to
document the credentials of physicians and other health care practitioners.
(See Chapter 5 for more information on licensing health care professionals.)


Patient Care Patient care, which encompasses diagnosis and treat-
ment, is the primary function of hospitals and what distinguishes them
from other institutions within and outside of the health care system.
Patient care is often divided into three levels — primary care, secondary
care, and tertiary care — based on the severity of the condition to be
treated. Primary care denotes care that is simple to give, or the evaluation
of a condition and referral to a specialist. Although primary care does not
require hospitalization, individuals may receive primary care in a hospital
setting. Treating individuals with infections, or victims of minor accidents,
and providing annual physical examinations are examples of primary
care. Secondary care is more specialized care for conditions that require
day surgery or hospitalization. Treating victims of burns or serious acci-
dents and extracting tonsils are examples of secondary care. Tertiary care
is the most specialized level of care and generally involves the most
advanced medical knowledge and technology available. Because of this,
most teaching hospitals that are part of academic health centers specialize
in tertiary care. Tertiary care includes treatment for cancer and for con-
genital and metabolic disorders.^' Some hospitals engage in all three levels
of care, although many smaller hospitals refer tertiary care cases to larger

Diagnoses may be made by health care professionals without the aid
of technology (as when they prescribe treatment on the basis of their
observations or information provided by patients) or with the aid of
technology. There are three main catories of diagnostic technology: sam-
ple analysis, intrinsic energy analysis, and external energy probes. Sample
analysis consists of analyzing the chemical and cellular components of
body fluids and tissues. Examples of sample analysis include blood tests,
tumor biopsies, and spectroscopy. Intrinsic energy analysis measures
internal energy conditions, such as temperature, sound, and pulse. Elec-
troencephalographs, for example, are devices that record the electrical
activity of the brain. The third category of diagnostic technology, external
energy probes, is used to determine the size, shape, and location of
internal organs. External energy probes work by directing beams of
energy into the patient and analyzing the energy that comes out. Exam-
ples of external energy probes are ultrasound and x-ray imagers. "^^

Hospital laboratories are an important element in patient diagnosis.
Two types of laboratory — clinical pathology and research — may exist in a
hospital, but only clinical pathology laboratories are involved with diag-
nosis. Through sample analysis, they provide information that assists
health care personnel in diagnosing disease.

Patient treatment may be classified as internal therapy (medication).


external therapy (casts, bandages, advice on life-style changes), mental
therapy, or surgery. Patient treatment may further be distinguished ac-
cording to whether the patient remains in the hospital overnight (in-
patient) or is treated and released (outpatient). Hospital outpatient de-
partments first appeared in the 1920s, and since then they have increased
in number, scope, and complexity."^' Outpatient services consist of emer-
gency care and general diagnosis and treatment for nonemergency condi-
tions to individuals referred by themselves or a physician. It is noteworthy
that in the last several years the length of hospital stays has decreased, and
some procedures, such as cataract surgery, that were previously per-
formed on an in-patient basis are now performed as ambulatory surgery,
eliminating the need for an overnight hospital stay. This change is due to
improved techniques and to revised Medicare and Medicaid reimburse-
ment regulations aimed at cost containment.

Advances in communications technology have significantly altered
the delivery of patient care. Computer networks link physicians to one
another and physicians' homes and offices to hospital laboratories and
finance departments. Physicians can readily update medical records using
voice recognition technology, and diagnostic imaging departments are
able to store images on optical disks instead of film. Furthermore, patients
can carry with them their medical record on a card about the size of a
credit card. For an overview of how computerization has affected health
care, see Nina W. Matheson, "Computerization and a New Era for Ar-
chives" in Nancy McCall and Lisa A. Mix, eds.. Designing Archival Programs
in the Health Fields (Baltimore: Johns Hopkins University Press, 1994).

Health Promotion Health promotion, also called consumer health edu-
cation, is the process of communication and education that "helps each
individual to learn how to achieve and maintain a reasonable level of health
appropriate to his particular needs and interests, and to be motivated to
follow health . . . practices which contribute to his state of health and
well-being."'*^ Historically, hospitals in the United States have not partici-
pated very actively in health promotion. This trend seems to be reversing
due to the need to contain costs: by 1987, health promotion programs were
offered in more than one third of U.S. hospitals."*' Community hospitals are
especially conscientious about health promotion programs, and it is not
unusual for them to offer (free or at a moderate cost) literature concerning
health issues and health education classes in how to stop smoking, reduce
stress, or maintain a healthier diet. Health promotion programs may also
include health support groups, health screening, physical fitness classes,
family life education, and rehabilitation.


Biomedical Research Biomedical research is similar to scientific/tech-
nological research, with the exception that biomedical research may be
more clinical; therefore, the records of research done in hospitals are often
similar to those produced by research in a university .^^ Hospitals may
embark on research projects jointly with universities or corporations, thus
affecting the location and ownership of project records. Biomedical re-
search in the hospital setting may be scientific/technological in nature or a
combination of scientific/technological and medical. Recently, the trend
in hospitals has been to increase research and development activities to
produce new products with commercial potential. Often these activities
are conducted in cooperation with pharmaceutical companies. This type
of diversification is aimed at enabling hospitals to remain viable in a
competitive environment.'^^

Biomedical research in whatever setting is regulated just as scientific/
technological research is regulated. Hospitals, like other institutions per-
forming research involving animals or humans, must have animal care
committees and human subject committees. These are federally mandated

Online LibraryJoan D KrizackDocumentation planning for the U.S. health care system → online text (page 4 of 26)