3 Chapter 3: The Business of Working in Healthcare

Introduction

There are many aspects of working in career in healthcare that are vital to have knowledge about. There are very distinct differences between a professional licensure and a certification. In most cases, both are required to work as a practitioner in any field of medicine. It is critical to have knowledge of one’s scope of practice to ensure the safety of patients but to protect the provider from liability or negligence.

Knowledge about the agencies who are responsible for accrediting healthcare institutions is vital to ensure those institutions are meeting requirements for safe operating practices for their patients and staff alike.

Licensure, certification, and scope of practice

In healthcare, licensure, certification, and scope of practice are fundamental concepts that define a professional’s qualifications, legal authority, and permitted activities. Here’s an overview of each:

Licensure

• Definition: Licensure is a mandatory process by which a governmental agency grants permission to individuals to practice a profession within a designated scope.
• Purpose: It ensures that practitioners have met minimum standards of competence and protects public safety.
• Authority: Typically issued by state regulatory boards, licensure is legally required to practice certain healthcare professions.
• Example: A registered nurse (RN) must obtain a state license to legally provide nursing care.(IceV Online, Allied Rx Training)

Certification

• Definition: Certification is a voluntary process through which a non-governmental organization recognizes an individual’s expertise in a specific area.
• Purpose: It demonstrates advanced knowledge and skills beyond basic licensure requirements.
• Authority: Granted by professional organizations, certification is not legally required but may enhance employment opportunities and professional credibility.
• Example: A nurse may obtain certification in critical care nursing (CCRN) to showcase specialized proficiency.

Scope of Practice

• Definition: Scope of practice outlines the activities and procedures that a licensed healthcare professional is authorized to perform.
• Determination: Defined by state laws, regulations, and the professional’s education, training, and experience.
• Importance: It ensures that practitioners operate within their competencies, safeguarding patient care quality.
• Example: A physician assistant’s scope may include diagnosing illnesses and prescribing medications, depending on state regulations.

Summary Comparison

Aspect	Licensure	Certification	Scope of Practice
Mandatory?	Yes	No	Yes
Issued By	Governmental agency	Professional organization	Defined by law and professional standards
Purpose	Legal authority to practice	Recognition of specialized expertise	Defines permissible professional activities
Example	State RN license	CCRN (Critical Care Registered Nurse)	Duties allowed for a nurse practitioner

Understanding these distinctions is crucial for healthcare professionals to ensure compliance with legal requirements, pursue professional development, and provide safe, effective patient care.

License Revocation

Healthcare license revocation is a serious disciplinary action undertaken by state licensing boards to protect public safety and uphold professional standards. This process involves a formal investigation and legal proceedings, resulting in the permanent loss of a healthcare provider’s legal authority to practice.

Common Reasons for License Revocation

Healthcare professionals may face license revocation for various forms of misconduct, including:

• Gross negligence or repeated incompetence: Consistent failure to meet the standard of care expected in the profession.
• Substance abuse: Impairment due to drugs or alcohol that affects the ability to practice safely.
• Criminal convictions: Especially those involving moral turpitude, such as fraud or assault.
• Sexual misconduct: Engaging in inappropriate relationships or behavior with patients.
• Fraudulent activities: Including falsifying patient records or billing for services not rendered.(Miller & Wagner)
• Unethical or unprofessional conduct: Violations of professional codes of ethics or standards.

Revocation Process Overview

• Complaint Filing: A complaint is submitted to the state licensing board by patients, employers, or other parties.
• Investigation: The board conducts a thorough investigation to determine the validity of the complaint.
• Formal Charges: If sufficient evidence is found, formal charges are filed against the practitioner.
• Hearing: An administrative hearing is held where the practitioner can present a defense.
• Decision: Based on the evidence, the board decides whether to revoke the license.
• Appeal: The practitioner may have the right to appeal the decision through the judicial system.(Wikipedia)

Reinstatement Possibilities

Reinstating a revoked license is challenging and varies by jurisdiction. Generally, the practitioner must demonstrate rehabilitation, compliance with board requirements, and a commitment to ethical practice. Some boards may allow reapplication after a specified period, often requiring additional evaluations or monitoring.

Understanding the gravity of license revocation underscores the importance of adhering to professional standards and ethical practices in healthcare.

Accreditation in Healthcare

Accreditation in healthcare is a formal process by which an independent, authoritative body evaluates and recognizes organizations or programs for meeting predetermined performance standards. It serves as a quality assurance mechanism, ensuring that healthcare facilities, managed care organizations, and educational programs adhere to established benchmarks for safety, effectiveness, and continuous improvement.(Wikipedia)

Accreditation of Healthcare Facilities

Healthcare facilities, such as hospitals and outpatient centers, undergo accreditation to validate their commitment to delivering safe and high-quality patient care. This process involves comprehensive evaluations against standards that encompass patient safety, clinical practices, and organizational management.

 

Accreditation by these bodies is often essential for facilities to participate in Medicare and Medicaid programs and to instill confidence among patients regarding the quality of care provided.

Accreditation of Managed Care Organizations

Managed care organizations (MCOs), including health maintenance organizations (HMOs) and preferred provider organizations (PPOs), seek accreditation to demonstrate their effectiveness in delivering coordinated and efficient healthcare services.

Key Accrediting Body:

National Committee for Quality Assurance (NCQA): A nonprofit organization that evaluates MCOs based on criteria such as patient care quality, preventive services, and patient satisfaction. NCQA utilizes tools like the Healthcare Effectiveness Data and Information Set (HEDIS) and the Consumer Assessment of Healthcare Providers and Systems (CAHPS) to assess performance. (Investopedia)

Accreditation from NCQA signifies that an MCO meets high standards for quality and consumer satisfaction, influencing consumer choice and eligibility for certain government programs.

Accreditation of Educational Programs

Educational programs in the healthcare sector pursue accreditation to ensure that curricula meet the necessary standards for preparing competent healthcare professionals. This accreditation is crucial for program credibility and for graduates seeking licensure and employment.

Key Accrediting Bodies:

Commission on Accreditation of Allied Health Education Programs (CAAHEP): Accredits over 2,200 programs in more than 30 health science disciplines, ensuring that educational content aligns with professional standards. (Wikipedia)

Accrediting Bureau of Health Education Schools (ABHES): Recognized by the U.S. Department of Education, ABHES accredits private postsecondary institutions offering allied health education programs, focusing on institutional and programmatic quality. (Wikipedia)

Liaison Committee on Medical Education (LCME): Accredits medical education programs in the U.S. and Canada that lead to the Doctor of Medicine (M.D.) degree, ensuring that medical schools meet established educational standards. (Wikipedia)

Accreditation from these bodies assures that educational programs provide the necessary knowledge and skills for students to succeed in their respective healthcare fields.(Wikipedia)

In summary, accreditation across healthcare facilities, managed care organizations, and educational programs serves as a cornerstone for maintaining and enhancing quality, safety, and effectiveness in the healthcare system. It provides a framework for continuous improvement and accountability, benefiting patients, providers, and the broader community.

Scope of Practice Acts and Professional State Boards

In the U.S. healthcare system, Scope of Practice Acts and Professional State Boards are essential mechanisms that define, regulate, and enforce the standards of healthcare practice. They work in tandem to ensure that healthcare professionals deliver safe, competent, and ethical care.

Scope of Practice Acts

Purpose: Scope of Practice Acts are state-specific laws that delineate the procedures, actions, and processes that licensed healthcare professionals are authorized to perform. These acts aim to:

• Protect public health and safety by ensuring practitioners operate within their competence.
• Define the legal boundaries of professional roles.
• Adapt to evolving healthcare needs and technologies.

Scope: Each state legislature establishes these acts, which can vary significantly between jurisdictions. They consider factors such as education, training, and certification to determine permissible activities for various healthcare roles. For instance, the scope of practice for nurse practitioners or physician assistants may differ from one state to another. (Wikipedia)

Professional State Boards

Purpose: Professional State Boards are regulatory agencies responsible for overseeing the practice of healthcare professionals within a state. Their primary objectives include:

• Licensing qualified individuals to practice.
• Monitoring ongoing compliance with professional standards.
• Investigating complaints and enforcing disciplinary actions when necessary.

Scope: These boards have the authority to:

• Issue and renew licenses.
• Set continuing education requirements.
• Define ethical and professional conduct standards.
• Conduct hearings and impose sanctions for violations.(Wikipedia)

For example, the Federation of State Medical Boards (FSMB) represents state medical boards across the U.S., supporting their efforts to ensure high standards for physician licensure and practice. (Wikipedia)

Interplay Between Scope of Practice Acts and State Boards

While Scope of Practice Acts establish the legal framework for healthcare roles, Professional State Boards implement and enforce these laws. Boards interpret the acts, develop regulations, and ensure that practitioners adhere to defined scopes, thereby maintaining the integrity of healthcare delivery.

Challenges and Considerations

Despite their critical roles, these regulatory systems face challenges:

• Variability Across States: Differences in scope definitions can lead to inconsistencies in care delivery and professional mobility.
• Enforcement Limitations: There have been instances where state boards failed to act promptly against malpractice, raising concerns about their effectiveness in protecting the public. (New York Post)
• Evolving Healthcare Landscape: Rapid advancements in medical technology and changing healthcare needs require continuous updates to scope definitions and regulatory practices.

In summary, Scope of Practice Acts and Professional State Boards are foundational to the regulation of healthcare professions in the U.S. They work collaboratively to define professional roles, ensure competence, and protect public welfare. Ongoing evaluation and adaptation of these systems are essential to meet the dynamic needs of the healthcare environment.

Business Aspects of Healthcare

The healthcare industry is a complex ecosystem that integrates medical services with business operations to deliver patient care efficiently and sustainably. Understanding its major business aspects is essential for professionals navigating this dynamic field.

Major Business Aspects of Healthcare

1. Healthcare Delivery and Operations

• • Clinical Services: Hospitals, clinics, and outpatient centers provide direct patient care.
  • Operational Management: Includes staffing, supply chain logistics, facility maintenance, and quality assurance to ensure seamless service delivery.

2. Health Insurance and Payer Systems

• • Public Payers: Government programs like Medicare and Medicaid finance a significant portion of healthcare services.
  • Private Payers: Commercial insurance companies offer plans to individuals and employers, influencing care accessibility and reimbursement rates.

3. Pharmaceuticals and Medical Devices

• • Research and Development: Pharmaceutical companies invest heavily in developing new medications and therapies.
  • Manufacturing and Distribution: Medical device companies produce and supply essential equipment for diagnostics and treatment.

4. Healthcare Technology and Informatics

• • Electronic Health Records (EHRs): Digital systems for storing and managing patient information.
  • Telemedicine: Remote consultation services expanding access to care.
  • Health IT Infrastructure: Supports data analytics, cybersecurity, and interoperability among systems.

5. Regulatory Compliance and Legal Affairs

• • Accreditation: Healthcare facilities and programs undergo evaluations to meet established standards.
  • Licensure and Certification: Healthcare professionals must obtain and maintain appropriate credentials.
  • Legal Compliance: Adherence to laws such as HIPAA ensures patient privacy and data security.

6. Financial Management and Revenue Cycle

• • Billing and Coding: Accurate documentation is crucial for reimbursement from payers.
  • Revenue Cycle Management: Encompasses the entire financial process from patient intake to final payment.
  • Cost Control: Strategies to manage expenses while maintaining quality care.

7. Strategic Planning and Marketing

• • Market Analysis: Identifying community needs and service gaps.
  • Brand Management: Building a reputable image to attract patients and partnerships.
  • Business Development: Expanding services, mergers, and acquisitions to grow market share.

8. Workforce Management and Human Resources

• • Recruitment and Retention: Attracting qualified professionals and reducing turnover.
  • Training and Development: Ongoing education to keep staff updated on best practices.
  • Employee Relations: Ensuring a positive work environment to enhance productivity.

These components collectively ensure that healthcare organizations operate effectively, adapt to changing environments, and continue to meet the health needs of the population.

Managed Care Organizations

Managed Care Organizations (MCOs) are health insurance plans designed to manage cost, utilization, and quality of healthcare services. They contract with healthcare providers and medical facilities to provide care for members at reduced costs. The primary types of MCOs include:

1. Health Maintenance Organization (HMO)

• • Structure: Requires members to choose a primary care physician (PCP) who coordinates all healthcare services.(Verywell Health)
  • Network: Services are covered only if provided by doctors and hospitals within the HMO’s network, except in emergencies.(Verywell Health)
  • Referrals: Specialist visits require referrals from the PCP.
  • Cost: Generally lower premiums and out-of-pocket costs.
  • Flexibility: Limited; out-of-network care is typically not covered.(Verywell Health)

2. Preferred Provider Organization (PPO)

• • Structure: Offers more flexibility in choosing healthcare providers.(Verywell Health)
  • Network: Members can see any healthcare provider but receive higher benefits when using in-network providers.(Wikipedia)
  • Referrals: No referrals needed for specialists.(Wikipedia)
  • Cost: Higher premiums and out-of-pocket costs compared to HMOs.(Investopedia)
  • Flexibility: High; members can see out-of-network providers at a higher cost.

3. Exclusive Provider Organization (EPO)

• • Structure: Similar to PPOs but with more restrictions.
  • Network: Services are covered only if provided by doctors and hospitals within the EPO network, except in emergencies.(Wikipedia)
  • Referrals: Typically, no referrals are needed for specialists.(Investopedia)
  • Cost: Lower premiums than PPOs but higher than HMOs.(Investopedia)
  • Flexibility: Moderate; no coverage for out-of-network care.

4. Point of Service (POS)

• • Structure: Combines features of HMOs and PPOs.(Verywell Health)
  • Network: Members choose a PCP and need referrals for specialists.(Verywell Health)
  • Referrals: Required for specialist visits.
  • Cost: Moderate premiums; costs vary depending on in-network or out-of-network services.(Verywell Health)
  • Flexibility: Higher than HMOs; members can use out-of-network providers at increased costs.

5. High-Deductible Health Plan (HDHP) with Health Savings Account (HSA)

• • Structure: Plans with higher deductibles and lower premiums, often paired with HSAs.
  • Network: Varies; can be structured as HMO, PPO, or EPO.
  • Referrals: Depends on the specific plan type.
  • Cost: Lower premiums; higher out-of-pocket costs until the deductible is met.
  • Flexibility: Varies; HSAs offer tax advantages for medical expenses.

Understanding these differences can help individuals choose the plan that best fits their healthcare needs and financial situation.