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Nursing Leadership &
Management
Patricia Kelly-Heidenthal
0-7668-2508-6
Delmar Learning
Copyright © 2003 Delmar Learning, a Thomson Learning company
Chapter 1
America’s Health Care
Environment
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Objectives

Upon completion of this chapter, the reader should be
able to:
• Identify how health care is organized and funded in
America.
• Discuss the movement toward population-based health care
and disease management.
• Discuss health care variation, evidence-based practice, and
malpractice.
(continues)
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Objectives
• Review the Institute of Medicine’s Committee on Health
Care reports.
• Identify recent changes and current forces and trends
influencing the development of caring, transdisciplinary
nursing, and health care delivery in America.
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Organization of Health Care
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The unique American political and social outlook has
influenced the development of American health care.
Americans have resisted the development of a
coordinated, centralized, national health care system.
Health care in America uses a variety of different
resources.
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Types of Health Care Services
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Primary – Emphasize promotion of health and
prevention of illness or disability.
Secondary – Emphasize detection and early
intervention in illness to prevent further illness and
disability.
Tertiary – Provide restorative or rehabilitation
services for patients with chronic or irreversible
conditions.
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Public and Private Stakeholders and
Settings
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Public stakeholders include tax-supported agencies at
the national, state, and local levels.
Private stakeholders include health care deliverers
and other organizations that operate in the health care
field.
Voluntary groups also operate in the health care
arena. Examples of such groups are the American
Nurses Association, American Red Cross, and
American Heart Association.
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Health Care Spending
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The United States ranks 18th in the world in overall
health.
A large number of Americans do not have health
insurance.
A large portion of health care dollars is spent on
illness care rather than on preventative care.
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Health Care Funding
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The U.S. government provides health care funding for
military personnel, veterans, and Native Americans.
Through Medicare, the U.S government provides
health care funding for citizens who are over the age
of 65 or disabled.
Through Medicaid, the U.S government provides
health care funding for the medically indigent.
(continues)
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Health Care Funding

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Medicare and Medicaid use a fee-for-service system
that increases the total number of fees when the
number of patient services increases.
This system has led to escalating medical costs.
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Health Maintenance Organization Act
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The U.S. Congress passed this act in 1973. It
encouraged the formation and proliferation of health
maintenance organizations (HMOs).
In the 1990s large numbers of Americans began
enrolling in HMOs.
HMOs use a payment method called capitation, which
is the payment of a fixed dollar amount, per person,
for the provision of health services to a patient
population for a specified period of time.
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Managed Care
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Managed care manages quality and cost of health care.
It uses a variety of methodologies.
It also uses various care models, such as preferred
provider organizations (PPOs), point of service plans
(POSs), and traditional HMOs.
Many are concerned that managed care has adopted
cost-cutting strategies that are compromising effective
health care.
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Tax Equity and Fiscal Responsibility Act
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This act put a ceiling on Medicare reimbursement for
hospital services.
It set the stage for the 1983 Social Security
amendments, which mandated a prospective payment
system (PPS).
PPS resulted in the establishment of diagnosis-related
groups (DRGs) to permit comparison of similar
admissions and regulation of their cost.
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Movement Toward Population-based
Health Care and Disease Management
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Population-based health care
Addresses the needs of a population of patients rather
than focusing on care delivery to meet the needs of
individual patients.
Multiple determinants of health
Interest has grown in the role of social, environmental,
economic, and genetic factors in individual and group
health.
Increased emphasis is on spending on health
prevention and education.
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Integrated Health Care Delivery Systems

A network of health care organizations that provides
or arranges to provide a coordinated continuum of
services to a defined population and is willing to be
held clinically and fiscally accountable for the
outcomes and the health status of the population
served.
(continues)
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Integrated Health Care Delivery Systems
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Networks can be horizontally integrated when a
system contains several organizations of one type.
Networks can be vertically integrated when different
stages of health care are linked and delivered by one
agency.
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Disease Management
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A systematic approach to identifying at-risk persons
and intervening with care and prevention programs.
Provides cost containment by attempting to prevent
development of more serious health care conditions.
Rationing care
Process of using outcomes data to rank different types
of care, either for selection of patients or
reimbursement by agencies.
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Accreditation
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The Joint Commission on Accreditation of Healthcare
Organizations (JCAHO) is the national organization
that develops standards and accredits health care
organizations.
Accreditation is one of the ways hospitals can be
certified to receive Medicare and Medicaid payments
(continues)
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Accreditation

JCAHO initially emphasized standards for how
hospitals should be structured and set up for
accreditation. It has broadened its approach and
identified patient and organization outcomes to be
reviewed for quality.
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Health Care Variation, Clinical Practice
Guidelines, and Malpractice
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Research in the 1970s indicated that patient outcomes
and costs varied significantly in different parts of
America.
In 1989 the Agency for Healthcare Research and
Quality (AHRQ) was formed to develop clinical
practice guidelines for uniformly measuring quality of
outcomes.
Concerns over malpractice have also led to an
emphasis on measuring and documenting outcomes.
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Institute of Medicine Committee on
Health Care Quality Reports

An Institute of Medicine (IOM) committee report
released in 2001 identified six major areas to be
pursued in health care. Health care should be:
•
•
•
•
•
•
Effective
Patient-centered
Timely
Efficient
Safe
Equitable
(continues)
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Institute of Medicine Committee on
Health Care Quality Reports

It also identified four major areas to target for change:
•
•
•
•
Information technology
Payment
Clinical knowledge
Professional workforce
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Quality Health Care
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Donabedian conceptualized a useful framework for
quality health care. It uses the elements structure,
process, and outcome.
Structure elements, such as quality patient care
standards, environmental standards, and so on,
identify what structures must be in place to deliver
quality health care.
(continues)
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Quality Health Care
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Process elements, such as managing the health care
process and using clinical practice guidelines, identify
what nursing and health care interventions must be in
place to deliver quality.
Outcome elements are the end products of quality care
and indicate the patient status that results from health
care. They reflect the effectiveness of structure and
process elements.
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Balanced Scorecard
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The balanced scorecard is a means of monitoring
outcomes and reviewing quality and cost.
It uses four key perspectives as a framework for
identifying measures to be reviewed in an
organization:
•
•
•
•
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Financial strength
Customer satisfaction and service
Internal operating efficiency
Learning and growth
Each perspective has five or six vital measures.
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Malcolm Baldridge National Quality
Award
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This national award annually recognizes quality
achievement in various industries.
A pilot program for the health care industry was
conducted in 1995, and health care organizations were
eligible to apply for the award in 1999.
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Recent Changes in Health Care
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Health Insurance Portability and Accountability Act
(HIPAA) of 1996
Includes measures to standardize and computerize
health care billing, claims, and reimbursement. Also
dictates that patient data be transmitted securely.
Public information about the quality of health plans
(continues)
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Recent Changes in Health Care
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Several public and private agencies are making public
information on the quality of patient care. This
information is being used for comparison purposes.
Other organizations compile ratings and rankings of
health care organizations across the country.
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The Pew Health Professions
Commission’s Report
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This report calls for nursing, medical, and other health
care curriculums to change and move into the 21st
century. It also recommends competencies that will
enable health care providers to improve patient care.
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Other Forces Currently Influencing
Health Care
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Capitation
Payment of clinicians based on performance, using
clinical guidelines
New technology
Aging population
Genetic engineering
(continues)
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Other Forces Currently Influencing
Health Care
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Increasing cultural diversity
New diseases
Information management
Globalization of the world economy
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Healthy People 2010
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A major public health initiative drafted by the U.S.
Department of Health and Human Services.
It contains a set of indicators that provide a snapshot
of the nation’s health.
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Trends in American Health Care and the
Need for Caring, Transdisciplinary Nursing

Nursing role
• Nursing has increasingly become an integral part of the
health care delivery environment.
• Nurses are assuming more and more responsibility in health
care.
• Transdisciplinary nursing encourages nurses to work
together to provide quality patient care.
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