System Perspectives and Environmental...

PART I

System Perspectivesand Environmental

Exchanges

This book takes the open system approach. In modern management, theopen system theory has found a strategic role in operating a successfulenterprise in a changing environment. To be successful, an organizationmust adapt to external change.

According to the open system theory, organizations are viewed as livingentities that exist within, and are part of, a larger environment. The exter-nal environment consists of numerous forces, which can be classified intosix broad environmental domains: social, political, economic, technologi-cal, informational, and ecological. Forces in these domains have varyingdegrees of influence on an entire industry and its member organizations.The nursing home industry is no exception. Over time, the long-termcare industry in America has been shaped by such factors as innovationsin medical care and technology, government regulations, national healthpolicy, consumer advocacy groups, and people’s attitudes and commit-ments at work and home. Such external influences will continue to pres-sure the industry to change. While broad forces influence the wholeindustry, individual long-term care facilities are affected by their local

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environment. Examples include market competition, shifts in local demo-graphics, and makeup of the labor force in the area.

In the open system approach to long-term care management, facilityadministrators view their organizations as integrally linked to the externalenvironment. Because the various environmental forces remain dynamic,administrators must be keen observers of emerging trends. They mustassess the nature and degree of change in the environment, and evaluatethe potential impact of external changes on the organization. Certainenvironmental changes can have a lasting effect on an individual facility’sor a nursing home corporation’s long-range survival. For example, whennew competition enters the market, new regulations take effect, or pay-ment methods are changed, they generally have lasting effects on long-term care facilities. Hence, the difference between success and failureoften depends on the ability of top-level managers to identify changes inthe external environment, evaluate their potential effect on the organiza-tion, make decisions, and take action. The dynamic environment notonly presents challenges, it also opens up new opportunities. Long-termcare administrators who understand and are attuned to external factorsand their potential effect on the organizations they manage are likely tooutperform those who do not pay attention to the changes or do notgrasp their implications for the facility. Achieving this kind of successrequires that nursing home administrators develop a high level of concep-tual skills. They must be active in their local communities, exchange ideaswith managers in other health care organizations, and actively participatein professional associations representing the long-term care industry.

A clear understanding of the external environment is essential for fourmain reasons:

● To meet the variety of care needs of all the patients served by a facil-ity, the administrator must establish effective exchanges between thefacility and key external agencies that are best suited to provide theservices that the facility does not produce.

● Administrators must pursue opportunities to forge partnerships withexternal agencies that would result in serving the organization’s bestinterests.

● Administrators must persistently improve operational efficiencies asnew health policies emerge, new regulations are passed, and newreimbursement methods are implemented.

2 SYSTEM PERSPECTIVES AND ENVIRONMENTAL EXCHANGES

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● The long-range direction of a facility must be driven by the currentand anticipated changes in the external environment.

Strategic decision-making is vital for an organization’s long-term suc-cess. Examples of strategy include deciding whether to add new services tomeet changing health care demands or to curtail services for which thedemand is declining; whether to expand an existing facility or to build anew one; and whether to acquire a facility or to merge with anotherorganization. Periodically, all health facility administrators must confrontexternal threats, take action to meet new environmental challenges, ortake advantage of some opportunity to gain market share.

The major environmental components are discussed in this Part of thebook. Chapter 1 explains the six environmental domains and discussestheir implications. It also gives an overview of the long-term care system,describing the various services that can be arranged along a continuum ofcare. From a facility’s perspective, some of the services are competitivewhereas others are complementary. The chapter also addresses how long-term care services ought to be rationally linked to the rest of the healthcare delivery system. Chapter 2 provides more specific illustrations of thetypes of exchange relationships a nursing facility can establish with exter-nal agencies. Using a systems model of value exchanges, it emphasizesvalue-driven partnerships as the basis on which meaningful exchanges arebuilt. Chapter 3 centers on the legal and regulatory environment.Chapter 4 covers details of financing and reimbursement, which consti-tute the life blood necessary for sustaining an organization.

The significance of the environmental domains for strategic man-agement, and how the concepts of open and closed systems should beintegrated into management practice, are more fully addressed later inPart III.

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5

System Concepts andLong-Term Care Delivery

1CHAPTER

LEARNING MODULES

1. Differences between closed and open systems. Open sys-tem cycle of exchanges. Organizational outputs thatbenefit the external agencies in open system partner-ships. Outputs and benefits as necessary conditions toattract desirable resource inputs.

2. Application of open system theory to strategic manage-ment. An overview of the six environmental domains thatinfluence the operation of a long-term care facility.Implications of environmental factors for long-term caredelivery.

3. Operation of environmental influences in primary andsecondary proximities, and at four proximal levels thatrequire different types of responses from administrators.Competitive and complementary services, and theirimplications for nursing home administration.

4. Six main characteristics of long-term care. Differencesbetween care based on the medical model and the holis-tic model. Reasons that a variety of services must beappropriately balanced. Four distinct categories for clas-

5

continues

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If we can find a logical point of departure to discuss effective managementof long-term care organizations, it will be recognizing that no organizationis self-contained. Organizations are not self-sufficient and cannot functioneffectively if isolated from their external environments. Organizationalsuccess requires establishing linkages with external agencies. It requiresadapting to a changing environment. It requires managers to be proactivein assessing the potential effects of emerging trends. It requires perception,understanding, analysis, decision-making, and action on the part of man-agers. The open system theory embodies these concepts. An organizationthat is capable of pulling resources from its environment remainsdynamic. Over time, it builds internal strengths that enable it to attractclients, serve them well, improve profitability, develop its staff, and benefitthe community. Such an organization gains a certain momentum,

6 CHAPTER 1 SYSTEM CONCEPTS AND LONG-TERM CARE DELIVERY

sifying the variety of long-term care services. Two majoraspects of medical care.

5. Reasons that mental health needs may go unattended.The facility’s responsibility for total care. Importance ofintegrating social and residential services.

6. Physical and mental dysfunction and the goal of long-term care. Integration of holistic aspects and quality-of-life features into the delivery of care.

7. Three main components of the long-term care contin-uum. Common types of community-based long-termcare services. General objectives of community-basedservices. Intramural and extramural services.

8. Types of institution-based long-term care services. Maindifferences between a skilled nursing facility and othertypes of institutional settings. Challenges posed byskilled nursing care.

9. Subacute care and specialized care services.10. Common types of non-long-term health care services.

Their relationship to long-term care. Rational integra-tion of long-term care and other services. How integra-tion can be improved.

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enabling it to meet new challenges and profit from new opportunitieswhen other organizations may remain inert and suffer from atrophy.

In general, long-term care includes a complex array of services that haveremained fragmented because no attempts have been made to integratethem into a seamless system of long-term care delivery. Nursing care facili-ties are a part of this uncoordinated “system,” and facility administratorsshould understand the other pieces of the long-term care puzzle. For exam-ple, a nursing home administrator should become familiar with comple-mentary long-term care services available in the community. These servicesinclude home health care, outpatient rehabilitation, subacute care, special-ized services for Alzheimer’s patients, and a variety of supportive livingoptions for the elderly or disabled. A knowledge of other health care agen-cies and social services outside the long-term care sector is also critical.

THE CLOSED AND OPEN SYSTEMSA system can be defined as “a set of elements standing in interrelationamong themselves and with the environment” (Von Bertalanffy 1972).Whether or not an organization’s internal systems are linked to the exter-nal environment is what differentiates between closed and open systems.

Closed SystemOrganizations that function as a closed system emphasize only the inter-relationships between the various internal components, while the interac-tion with the external environment is largely ignored. A closed system typ-ically focuses on procedures for monitoring outputs, comparison ofoutputs with preset standards, evaluation of discrepancies between actualoutputs and preset standards, and mechanisms for taking action to rectifynegative variances between actual outputs and preset standards (Brown1977). Effective closed systems management is essentially focused on orga-nizational structures, productivity, effectiveness, cost control, profitability,and quality. In an effectively functioning closed system, the various depart-ments of a nursing facility work together cohesively, support each other,and develop systems to improve quality and efficiency. Clearly, manage-ment must focus on improving the internal operations. However, eventhough these aspects of management are extremely important, a closed sys-tem functions as a self-contained entity, isolated from its environment. Nomatter how efficient the internal systems of an organization may become,

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without the open system approach a nursing facility will stagnate andeventually lose any competitive advantage it may have once enjoyed.

Open SystemAn open system recognizes the effects of external factors and views inter-nal operations in relation to changes in the external environment. Theopen system approach is based on the premise that “no organization cansurvive for long if it ignores government regulations, supplier relations, orthe myriad external constituencies upon which the organization depends”(Robbins 2000, 606). The open system approach is necessary becauseorganizations do not function in a stable and predictable environment. Inthis approach, internal operations are evaluated in terms of the demandsof a changing environment. External forces impose new pressures andchallenges, compelling the organization to respond, conform, adapt, andinnovate. Appropriate responses to external demands also result in inter-actions that benefit the organization as well as the constituencies theorganization serves. The organization depends on the environment toreceive essential inputs, it transforms those inputs and supplies outputsthat benefit the environment (Brown 1977).

Open systems theory suggests that an organization’s interface with itsexternal environment should be viewed as an exchange relationship—agive-and-take relationship—between the organization and its environ-ment. At the receiving end, the organization obtains from its environ-ment various inputs in the form of resources such as staff, supplies, loans,fire and police protection, clients, and payments for services. At the givingend, the organization returns to the environment what it has produced inthe form of jobs, taxes, market competition, education, and improvedcommunity health. Dill (1958) identified four factors in the environmentthat are particularly relevant for organizational goal setting and goalattainment. The four factors are:

● Customers ● Suppliers of labor, materials, capital, etc. ● Competitors for both markets and resources ● Regulatory groups

When properly exploited by astute management, each of these factorsmakes a contribution toward making a nursing facility more effective indelivering services.


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Cycle of ExchangesThe relationship between an organization and its environment goesthrough a complete cycle of exchange, which has four identifiable phases,as illustrated in Figure 1-1.

Resource Inputs

Organizations rely on the environment to obtain the critical resourcesneeded to accomplish their goals and objectives. Some of the majorresources are human resources, capital financing, supplies and equipment,technology, complementary services needed by the organization’s clients,licensure by the state, and federal certification. These basic inputs are crit-ical to a long-term care facility’s ability to deliver appropriate levels ofpatient care.

Clients and Payments

The nursing facility must attract clients who will benefit from the servicesprovided by the organization. Clients establish the primary exchangewhereby the organization produces services: clients receive services tai-lored to meet their individual needs, and the facility gets paid for the ser-vices it has rendered. This exchange relationship among the facility, itsclients, and payers generates revenues that make an indispensable contri-bution to a nursing facility’s profitability.

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FIGURE 1-1 Organizational Interface with the ExternalEnvironment

External Environment

External Environment

O R G A N I Z A T I O N

CLIENTS

INPUTS OUTPUTS

PAYMENTS

Human resourcesCapital financingSupplies & EquipmentTechnologyComplementary servicesLicensureCertification

Clinical qualityClient satisfactionStaff satisfactionProfits

Jobs Taxes Education

Health Community outreach Competition

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Production of Outputs

As they deliver services to clients, nursing care organizations transform theresources obtained from the environment into critical outputs such as clin-ical quality, client satisfaction, staff satisfaction, and profits. Effectivenessand consistency in producing these outputs determine the long-rangesuccess of a nursing facility.

Returns to the Environment

Organizations provide jobs, pay taxes, contribute to cost-efficiency withinthe health care system by actively competing in the marketplace, engagein community outreach by providing education and information, andpositively influence a community’s health and well-being. Thus, theorganization creates external benefits by what it produces and returns tothe environment. Finally, the cycle is completed as external agencies takeinto account a facility’s outputs and benefits returned to the communitywhen the facility needs resources to sustain its operations. A facility’s abil-ity to attract desirable resource inputs is often conditional upon its out-puts and returns to the environment. For example, a long-term care facil-ity that produces poor quality outputs will find it difficult to attract themost qualified staff members, a key resource the facility must obtain fromthe external environment. Such a facility is also likely to face difficultiesattracting clients. Other health care providers, such as hospitals andphysicians, may stop referring their patients. In extreme cases, the facilitymay risk losing its license and certification, which may put it out of busi-ness. An organization builds its reputation and image on the basis of whatit delivers to the environment. When a facility fails to meet communityexpectations, it jeopardizes its prospects for attracting quality resourceinputs and further weakens its ability to stay competitive.

THE ENVIRONMENT

Open System and Strategic ManagementAlthough strategic management is one of the main themes in Part III ofthis book, it is appropriate here to emphasize that there is an inextricablelink between the open system approach and strategic management. Figure1-2 gives an overview of the strategic management process and includesexamples of strategic planning and actions. Strategy formulation is a top-


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management function that is driven primarily by environmental change.The purpose of strategy is to keep the nursing facility afloat duringadverse circumstances and to make it more profitable by gaining a com-petitive edge. When a nursing facility administrator adopts the open sys-tem approach to management, he or she will monitor changes in the envi-ronment; decide on the type of strategic response that would be in theorganization’s best interest according to organizational mission and val-ues; plan a course of action; and carry out the plan. Using various formaland informal processes to identify significant trends and events on anongoing basis is called environmental scanning. A formal analysis andevaluation of environmental trends to understand their potential implica-tions for a facility’s long-term success is called environmental assess-ment. In strategic planning, administrators assess major trends and direc-tions and make decisions to avert threats and pursue new opportunities

T H E E N V I R O N M E N T 11

FIGURE 1-2 Relationship Between the Open System Approachand Strategic Management

Social

PoliticalEconomic Technological

Informational

Ecological

Environmental Assessment

Strategic Planning

Action

Improve quality

Train staff in new skills

Restructure organization

Revise the marketing plan

Establish strategic partnerships

Expand existing facilities

Add new services

Acquire or build a new facility

Renovate the facility

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that may emerge. A careful environmental assessment is also often neces-sary when planning major changes in the internal operations.

Environmental DomainsEnvironmental scanning and assessment activities are greatly facilitated bya conceptual model that classifies the macro-environment of a long-termcare facility into six main domains: social, political, economic, technolog-ical, informational, and ecological (Figure 1-3).

Social Factors

Social factors include demographic trends, social change, cultural factors,and lifestyle preferences. The demand for long-term care and the type ofservices are influenced by changes in the population’s demographic compo-sition, such as age, gender, and prevalence of disability. Greater longevityhas given rise to the “sandwich generation” of middle-aged families whomust take responsibility for their teenage and college-age children on theone hand, and for elderly parents on the other. An increasing number ofwomen in the workforce means that married couples may need formal help


FIGURE 1-3 Environmental Influences in the Primary andSecondary Proximities of an Organization

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to care for their elderly parents. Strong family and social support enablepeople with disabilities to continue to live independently. Other trends,such as job mobility, often require making appropriate arrangements for theelderly parents who are left behind as close family members move away.Migration of retired people to areas of the country that offer a more tem-perate climate has important implications for the development of long-termcare services in those areas. Lifestyle preferences of baby-boomers are givingrise to a new demand for nursing care settings that emphasize personal inde-pendence and lifestyle choices.

Political Factors

The policy agenda that sets priorities for political action, tax policy, theappropriation of tax dollars to various programs, and laws and regulationshave a tremendous impact on the management of long-term care facili-ties. For instance, high taxes chip away profit margins in for-profit busi-nesses. Federal and state funding appropriations for the Medicare andMedicaid programs determine how much nursing facilities will get paid.Federal and state legislatures pass new laws, and government agenciescraft regulations. The political clout of the long-term care industry caninfluence how state and federal funds are appropriated or how the indus-try is regulated. Administrators can participate in the political process byestablishing contacts with their state and federal representatives, by voic-ing their opinions, and by becoming members of professional associationsrepresenting their interests.

Economic Factors

Economic growth or recession, industrial development, and unemploy-ment create demographic shifts that can bring people into an area ormake them leave. Economic factors may also dictate whether people canafford to pay for long-term care, especially when public financing doesnot cover certain services. Changes in the labor market affect the avail-ability of skilled workers and hence a facility’s ability to recruit qualifiedstaff members. Tight labor markets, for example, ease up recruitment ofnursing assistants, cooks, and housekeepers, because those workers havedifficulty finding jobs in restaurants, hotels, motels, and other low-skilledservice industries. The job market also governs wages and benefits neces-sary to attract and retain employees. Competition from other facilities,and from substitute services such as home health care, present challenges


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that nursing home administrators must not ignore. Other major eco-nomic events, such as the growth of managed care since the late 1980s,have an enormous impact on every aspect of health care delivery, includ-ing long-term care.

Technological Factors

Technological innovation in medical sciences will continue to revolution-ize health care. It also has social implications as people live longer andhealthier lives, and as the elderly seek more independent lifestyles.Technology has enabled many individuals to receive long-term care ser-vices in less restrictive or non-institutional settings instead of getting thatcare in traditional nursing homes. Home health care, for instance, is notonly a cheaper alternative to nursing homes, but is also preferred byclients when services such as intravenous antibiotics, oncology therapy,hemodialysis, and parenteral and enteral nutrition can be provided byhome-care agencies. On the other hand, technology has enabled nursingcare facilities to provide specialized services and has allowed these facilitiesto care for acutely ill patients who previously could receive such servicesonly in a hospital. Examples include AIDS care, ventilator care, headtrauma services, and post-orthopedic rehabilitation.

Informational Factors

Computer-based information systems and the Internet have numerousapplications. Adoption of information systems is changing many of theprocesses of health care delivery. It is also providing more effective toolsfor managing health care organizations. Areas of application where infor-mation systems have made a positive difference include clinical records,patient assessment and care planning, patient-care protocols, inventorymanagement, data collection and analysis, advertising, and computer sup-port systems for both clinical and management decision-making. TheInternet has also opened access to a barrage of information for practition-ers and consumers alike.

Ecological Factors

New infections and diseases, as well as a carry-over of certain medical con-ditions into older populations will affect long-term care delivery. Theincidences of infection with Human Immunodeficiency Virus (HIV) andHepatitis C virus have shown the need for training in precautionary


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measures and practice of stringent infection-control procedures. Also,new treatments seem to delay the onset of Acquired Immune DeficiencySyndrome (AIDS). As people infected with HIV live longer, AIDS islikely to become more prevalent among older people. People with devel-opmental disabilities are also living longer and need specialized care.Other ecological factors such as natural disasters (earthquakes, floods,hurricanes, snowstorms, tornadoes, etc.) require that facilities undertakeadequate planning and prepare for unforeseen eventualities, particularly ifthey are located in areas that may be prone to such events. The possibilityof bioterrorism has raised new concerns for patient safety. It also requiresthat health care facilities work in close collaboration with local civildefense and public health agencies to address potential threats.

Environmental ProximityEnvironmental proximity determines how closely certain influences sur-round the organization. An organization’s relationship to its environmentand the degree of control it may have over environmental issues is oftengoverned by the proximity. For instance, a facility administrator generallyhas much more control over managing relationships with the local hospi-tal than he or she does over state or national policy that affects nursinghome regulations and reimbursement.

First, in rather broad terms, we can think of primary and secondaryproximities (Figure 1-3). The primary proximity is closer to the organi-zation, and the six environmental domains operate in a local environ-ment such as the community, which can be a neighborhood, a local dis-trict, or an entire metropolitan area. In other instances, such as facilitiesserving rural areas, an entire county would constitute the primary prox-imity. The secondary proximity consists of environmental domains oper-ating at the state and national levels. Primary proximity offers theadministrator opportunities for direct involvement in the community, ithelps identify local agencies with which exchange relationships should beestablished, it creates heightened expectations for the organization’ssocial responsibility toward the community, and it influences the mar-ket’s competitiveness.

Another way to illustrate the interplay of external factors is through four proximal levels shown in Figure 1-4. In this four-level model, thefirst three levels comprise the primary proximity; the fourth level formsthe secondary proximity.


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Level One Proximity

The most proximal influence surrounding a nursing home is other similarfacilities and substitute services that directly or indirectly compete againstthe organization. Substitute services are other long-term care optionsthat clients may choose from. For example, home health can be a substi-tute for institutional care. Three-fourths of all elderly patients receivinghome health care require nursing services, and almost 30% need physicaltherapy (U.S. Bureau of the Census 2003), which are services that are alsoprovided by nursing care facilities. Competition is generally viewed as athreat, but it may also drive the organization to innovate and expand itsrange of services. For example, a nursing home may open an outpatientrehabilitation center, or expand into delivering home health care. Wellthought-out strategic actions can maintain or enhance a facility’s compet-itive advantage.

Level Two Proximity

Level 2 proximity includes a wide variety of complementary services.These are services that are not directly rendered by the facility in which thepatient resides, but are necessary to address the total health care needs of a patient. A nursing home must assume responsibility for the total care ofall patients. Total care means recognizing any health care need that mayarise, and ensuring that the need is evaluated and addressed by appropriateclinical professionals. When evaluation and treatment are beyond the


FIGURE 1-4 Four Levels of Environmental Proximity

LEVEL 4

LEVEL 3

LEVEL 2

LEVEL 1

Environmental domains operating at the state and national levels

Environmental domains operating at the local level

Complementary services

Competitive and substitutelong-term care services

ORGANIZATIONEXTERNAL ENVIRONMENTEXTERNAL ENVIRONMENT

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nursing home’s scope of services, a timely referral to an outside provider isnecessary. For example, a skilled care facility is not a mental health institu-tion. It must, however, recognize mental health needs when they arise, andcoordinate the delivery of appropriate mental health care. In some cases, itmay be necessary to move a patient temporarily to an acute care hospital.In other instances, a patient may need to be referred to a dentist, optome-trist, or podiatrist. Community outreach efforts, marketing decisions, andliaisons with complementary service providers that would facilitate readyaccess to services needed by a facility’s patients can only be undertakenwith a keen understanding of the level 2 proximity. Administrators mustforge meaningful relationships with external providers with the goal ofestablishing a two-way patient referral system. For example, it is commonfor nursing homes to have contracts with selected dentists, podiatrists,optometrists, acute care hospitals, and other providers. Skilled nursingfacilities can also make informal agreements with retirement centers,assisted living facilities, and home health agencies to transfer patientsamong them to accommodate the changing needs of their clients.

Level Three Proximity

At level 3, we can think of the environmental factors operating in a facility’sprimary proximity. These are local environmental factors and various com-munity and civil services that are not directly associated with health caredelivery. Examples include the local economy, demographic shifts in thecounty, local job conditions, the level of local police- and fire-protectionservices, and local ordinances.

Level Four Proximity

Level 4 environmental factors affect the nursing home industry at thestate and national levels. But in many instances these changes also affectlocal nursing homes. Examples are changes in the government’s paymentmethods for patients on public assistance, changes in rules and regula-tions, reports on nursing homes by state or national media, and majorindustry trends that may eventually become more localized, such as thespread of managed care or growth of substitute services. These influencesoften shape decisions that administrators must make. Administrativedecisions in response to state or national influences often have long-rangeconsequences for the nursing facility, and the type of response is generallyquite different from what would be appropriate for the previous three lev-

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els of proximity. The first three levels of proximity primarily call for estab-lishing community exchanges and involvement, and for adapting facilityservices to meet local needs. Level 4 proximity generally requires changesin internal operations to respond to broader issues. Level 4 proximity alsorequires active participation in the professional and trade associations thatrepresent the industry. Some of the major long-term care associationsinclude the American Health Care Association (AHCA), the AmericanAssociation of Homes and Services for the Aging (AAHSA), the AssistedLiving Federation of America (ALFA), and the American College ofHealth Care Administrators (ACHCA). These organizations closely fol-low major economic and political developments, and they keep theirmembers informed about these developments. These organizations main-tain active lobbying efforts at the state and national levels in order toinfluence long-term care policy. From time to time, they also engage inmobilizing grass-root campaigns by directing their members to contacttheir elected representatives and to educate those representatives aboutspecific nursing home issues.

THE NATURE OF LONG-TERM CARE

This section gives an overview of the main characteristics of long-term care.These characteristics are common to all long-term care services, regardlessof whether they are delivered in an institution or in a community-basedsetting.

Long-term care can be defined as a variety of individualized servicesthat are designed to promote the maximum possible independence forpeople with functional limitations, and these services are provided over anextended period of time to meet the patients’ physical, mental, social, andspiritual needs while maximizing their quality of life. This comprehensivedefinition covers six main aspects which apply to both institutional andnon-institutional long-term care:

● variety of services● individualized services● promotion of maximum possible functional independence● extended period of care● meeting the patient’s physical, mental, social, and spiritual needs● maximizing quality of life


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Variety of Services The delivery of most types of medical services is based on what is calledthe medical model, according to which health is viewed as the absence ofdisease. When a patient suffers from some disorder, clinical interventionsthat are widely accepted by the medical profession are used to relieve thepatient’s symptoms. Prevention of disease and promotion of optimumhealth are relegated to a secondary status. By contrast, in long-term care,medical interventions are only a part of an individual’s total care.Emphasis is also placed on non-medical factors such as social support andresidential services.

By its very nature, effective long-term care is holistic; medical andnursing care make up only one aspect of meeting the needs of the wholeindividual. On the other hand, the need for long-term care is not deter-mined solely by social and residential factors. The need is triggered byphysical factors, mental factors, or both; but once the need for long-termcare has been established, a holistic approach must be used in the deliveryof care.

Long-term care encompasses a variety of services so that needs thatvary from one individual to another can be adequately addressed. Therange of services an individual needs is determined by the nature anddegree of his or her functional disability, and the presence of any othermedical conditions and emotional requirements that the individual mayhave.

The full range of long-term care can be categorized into four distincttypes of services: medical care, mental health, social support, and residen-tial amenities. Although understanding the distinctive features of theseservices is important, in actual practice they should be appropriately inte-grated into the total package of care in accordance with individual needs.

Medical Care

Medical interventions in long-term care are primarily governed by thepresence of two main health conditions: chronic illness and comorbidity.First, as opposed to the care for acute conditions, long-term care focuseson chronic ailments, particularly when they have already caused somephysical or mental dysfunction. Acute conditions are episodic, requireshort-term but intensive medical interventions, generally respond to med-ical treatment, and are treated in hospitals, emergency departments, oroutpatient clinical settings. Chronic conditions, on the other hand, per-


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sist over time, are generally irreversible, but must be kept under control. Ifnot controlled, serious complications can develop. Examples of chronicconditions include hypertension, diabetes, arthritis, asthma, heart dis-ease, cancer, and multiple sclerosis. The mere presence of chronic condi-tions, however, does not indicate a need for long-term care. Whenchronic conditions are compounded by the presence of comorbidity—coexisting multiple health problems—they often become the leadingcause of an individual’s disability and erode that individual’s ability to livewithout assistance. This is when long-term care is needed. The prevalenceof comorbidity and disability rise dramatically in aging populations.

Services, devices, and living arrangements that enable a functionallyimpaired person to live independently are a part of long-term care.Examples include assistive devices for mobility, self-care, or eating.Intermittent assistance with household chores can promote independentliving. And living with a family member or friend who can routinely giveneeded assistance, with or without external services, is also consideredlong-term care. Institutional care generally becomes necessary when part-time help or assistive devices can no longer compensate for a person’s lossof function caused by some health-related complications.

The medical aspect of long-term care has two main areas of focus:

● Preventing complications from chronic conditions by routine moni-toring, promotion of healthful practices, medical treatment, and coor-dination of care with other providers, such as dentists, podiatrists, oroptometrists

● Delivering treatment after acute episodes.

Preventing Complications

Onset of complications arising from chronic conditions can be preventedor postponed through preventive medicine that includes nutrition, vacci-nation against pneumonia and influenza, and well-coordinated primary-care services. Each nursing home patient must be under the medical careof a qualified primary-care physician, and the overall care regimen mustemphasize prevention through adequate nutrition, hydration, ambula-tion, and various other preventive services. Ongoing monitoring andappropriate therapeutic regimens are important to keep chronic condi-tions under control and to minimize the development of medical compli-cations. Coordination of care with various medical providers such as the


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attending physicians, dentists, optometrists, podiatrists, dermatologists,or audiologists is often required to prevent complications or to deal withthe onset of impairments at an early stage.

Delivering Treatment After Acute Episodes

Onset of an acute episode requires medical evaluation and treatment in ahospital where the treatment plan must also take into account the pres-ence of chronic conditions and disabilities. Long-term care will generallycontinue after the acute condition is stabilized. Post-acute long-term careoften consists of skilled nursing care, which is physician-directed careprovided by licensed nurses and may include such treatments as intra-venous feeding, wound care, dressing changes, or clearing of air passages.The patient may also require rehabilitation therapies such as physicaltherapy, occupational therapy, speech therapy, or respiratory therapy.Rehabilitation therapies are supplemented by ongoing restorative carefrom the nursing staff. Medical services associated with long-term care aretypically provided by nurses and other professional staff members underthe supervision of a physician, rather than directly by a physician whomay only make periodic rounds for general follow-up.

Mental Health

Long-term care patients frequently suffer from mental conditions, mostnotably anxiety disorders, depression, and dementia. Mental disordersrange in severity from problematic, to disabling, to fatal. Mental illnessrepresents a grave threat, especially for older adults, who also have thehighest rates of suicide in the United States (Hoyert et al. 1999).Approximately two-thirds of nursing home residents suffer from mentaldisorders, including Alzheimer’s and related dementias (Burns et al.1993). It is erroneous, however, to believe that mental disorders are nor-mal in older people or that older people cannot change or improve theirmental health. But major barriers must be overcome in the delivery ofmental health care. Efforts to prevent mental disorders among olderadults have been inadequate because present knowledge about effectiveprevention techniques is not as extensive as our understanding of thediagnosis and treatment of physical disorders. On the other hand, treat-ment of many elderly people may be inadequate because assessment anddiagnosis of mental disorders in older people can be particularly difficult:the elderly often focus on physical ailments rather than psychological


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problems (Department of Health and Human Services [DHHS] 1999).Another drawback is that many elder-care providers, including primarycare physicians, are often not adequately trained in the diagnosis andtreatment of mental health problems.

Mental health services are generally delivered by specialized providersin both ambulatory (outpatient) and inpatient facilities. Because long-term care facilities are responsible for a patient’s total care, nursing homeemployees must be trained to recognize the need for mental health care,and the facility must arrange to obtain needed services from qualifiedproviders in the community.

Social Support

Social and emotional support are necessary for elderly residents to copewith changing life events. Various stressors commonly accompany theaging process itself and create such adverse effects as frailty, pain,increased medical needs, and the inability to do common things for one-self, such as obtaining needed information or running errands. Otherstressors are event-driven. Events that force an unexpected change in aperson’s lifestyle or emotional balance—such as moving to an institution,adjusting to a new environment, or the loss of a loved one—require cop-ing with stress or grief. Even the thought of change brings on anxiety.Many people go through a period of “grieving” when coming to termswith change, which is a normal part of the transition process. Grievingmay manifest in reactions such as anger, denial, confusion, fear, despon-dency, and depression (McLeod 2002). Social support is needed to helpbuffer these adverse effects (Feld & George 1994; Krause & Borawski-Clark 1994).

Social support includes both concrete and emotional assistance pro-vided by families, friends, neighbors, volunteers, staff members within aninstitution, organizations such as religious establishments and senior cen-ters, or by other private or public professional agencies. Such assistancemay also include coordination of simple logistical problems that may oth-erwise become “hassles” of daily life, providing information, givingreminders, counseling, and spiritual guidance.

Residential Amenities

Housing is a key component of long-term care because housing featuresmust be carefully planned to compensate for people’s disabilities to the


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maximum extent possible. Residences for the disabled must have physicalfeatures and amenities that are designed to promote independence. Somesimple examples include access ramps that enable people to go outdoors;wide doorways and corridors that allow adequate room to navigate wheel-chairs; railings in hallways to promote independent mobility; extra-largebathrooms that facilitate wheelchair negotiation; grab bars in bathrooms toprevent falls and promote unassisted toileting; raised toilets to make it eas-ier to sit down and get up; and pull-cords in the living quarters to summonhelp in case of an emergency. Adequate space, privacy, safety, comfort, andcleanliness are basic necessities. In addition, the residential environmentmust feel home-like, it must encourage social activities, it must promoterecreational pursuits, and the décor must be both pleasing and therapeutic.

Individualized ServicesLong-term care services are specifically tailored to the needs of the indi-vidual patient. Those needs are determined by an assessment of the indi-vidual’s current physical, mental, and emotional condition, as well as thatindividual’s past history of these conditions. A social history is also incor-porated into the assessment. The social history encompasses the individ-ual’s family relationships, former occupation, community involvement,leisure activities, and cultural factors such as racial or ethnic background,language, and religion. An individualized plan of care is developed so thateach type of need can be appropriately addressed through customizedinterventions. Assessment and plan of care are addressed in Part II of thisbook.

Functional Limitations and Promotion of IndependenceA key determinant of the need for long-term care is the degree to whichan individual is unable to independently perform certain common tasksof daily living. The goal of long-term care is to enable the individualmaintain functional independence to the maximum level that is practica-ble. Restoration of function may be possible to some extent throughappropriate rehabilitation therapy, but in most cases a full restoration ofnormal functioning is an unrealistic expectation. The individual must betaught to use adaptive equipment such as wheelchairs, walkers, specialeating utensils, or portable oxygen devices. Staff members must rendercare and assistance whenever the patient is either unable to do things forhimself or herself, or absolutely refuses to do so.


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In keeping with the goal of maximizing functional independence for thepatient, nursing home staff members should concentrate on maintainingwhatever ability to function the patient still has and on preventing furtherdecline of that ability. For example, a patient may be unable to walk inde-pendently but may be able to take a few steps with the help of trained staffmembers. Assistance with mobility helps maintain residual functioning.Progressive functional decline may be slowed by appropriate assistance andongoing restorative care, such as assisted walking, range of motion exer-cises, bowel and bladder training, and cognitive reality-orientation.However, in spite of these efforts, it is reasonable to expect a gradualdecline in an individual’s functional ability over time. As this happens,services must be modified in accordance with the changing condition. Inother words, long-term care must “fill-in” for all functions that can nolonger be carried out independently. For instance, a comatose patient whois totally confined to bed presents an extreme case in which full assistancefrom employees is required. In most other instances, staff members moti-vate and help the patient do as much as possible for himself or herself.

Extended Period of CareFor most long-term care patients, the delivery of various services extendsover a relatively long period because most recipients of care will at leastrequire ongoing monitoring to note any deteriorations in their health andto address any emerging needs. Certain types of services, such as profes-sional rehabilitation therapies, post-acute convalescence, or stabilization,may be needed for a relatively short duration, generally less than 90 days.In other instances, long-term care may be needed for years. In either situ-ation, the period during which care is given is much longer than it is foracute-care services, which generally last only for a few days. Becausepatients stay in nursing care facilities over an extended time, holistic careand quality of life (discussed in the next two sections) must be integratedinto every aspect of long-term care delivery.

Physical, Mental, Social, and Spiritual NeedsIn sharp contrast to the medical model, the holistic model of health pro-poses that health care delivery should focus not merely on a person’s phys-ical and mental needs, but should also go beyond those concerns toemphasize well-being in every aspect of what makes a person whole andcomplete. In this integrated model, a patient’s mental, social, and spiritual


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needs and preferences should be incorporated into medical care deliveryand all aspects of institutional living.

The social aspects of health care include housing, transportation ser-vices, information, counseling, recreation, and social contact with otherresidents, staff members, family, and other members of the outside com-munity. For example, community members can participate in the lives ofnursing home residents through a variety of volunteer programs. The suc-cess of such programs depends on a facility’s ability to form links with theoutside community. Also, family and friends must be encouraged to visitthe facility as often as possible. The social aspects of institutional livingare explored in greater detail in some of the later chapters.

Spirituality and spiritual pursuits are very personal matters, but, formost people, they also require continuing interaction with other membersof the faith community. The facility’s main responsibility is to make everyreasonable accommodation that would allow each individual total free-dom to practice or not to practice his or her faith. Most long-term carefacilities invite local congregations to hold religious services for their resi-dents’ convenience. Participation in these services is important to manyresidents, but others should have the freedom to refrain from any partici-pation. The facility should also encourage a resident’s faith community tomaintain contact with the patient through regular personal visits. Clearly,an important factor in building exchange relationships with the commu-nity (discussed in Chapter 2) should be to enhance the social and spiritualwell-being of the facility’s residents.

Quality of LifeFor institutionalized patients, quality of life refers to the total livingexperience that results in overall satisfaction with one’s life. It is particu-larly relevant to long-term care facilities because people typically residethere for an extended period. Quality of life is a multifaceted concept thatrecognizes at least five factors: lifestyle pursuits, living environment, clin-ical palliation, human factors, and personal choices. Quality of life can beenhanced by integrating these five factors into the delivery of care.

● Lifestyle factors are associated with personal enrichment and mak-ing one’s life meaningful through activities one enjoys. For example,almost everyone enjoys warm friendships and social relationships.Elderly people’s faces often light up when they see children. Manyresidents may still enjoy pursuing their former leisure activities, such


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as woodworking, crocheting, knitting, gardening, and fishing. Manyresidents would like to engage in spiritual pursuits, or spend sometime alone. Even those patients whose functioning has decreased to avegetative or comatose state can be creatively engaged in somethingthat promotes sensory awakening through visual, auditory, and tac-tile stimulation.

● The living environment must be comfortable, safe, and appealing to the senses. Cleanliness, décor, furnishings, and other aesthetic featuresare critical.

● Clinical palliation should be available for relief from unpleasantsymptoms such as pain or nausea.

● Human factors refer to employee attitudes and practices thatemphasize caring, compassion, and preservation of human dignityin the delivery of care. Institutionalized patients generally find it dis-concerting to have lost their autonomy and independence. Qualityof life is enhanced when residents have some latitude to govern theirown lives. Residents also desire an environment that promotes pri-vacy. For example, one field study of nursing home residents foundthat dignity and privacy issues were foremost in residents’ minds,overshadowing concerns for clinical quality (Health Care FinancingAdministration 1996).

● The nursing facility should make every effort to accommodatepatients’ personal choices. For example, food is often the primaryarea of discontentment, which can be addressed by offering a selec-tion of dishes. Many elderly resent being awakened early in themorning when nursing home staff begin their responsibilities to carefor patients’ hygiene, bathing, and grooming. Patient privacy iscompromised when a facility can offer only semi-private accommo-dations. But, in that case, the facility can at least give the patientssome choice in deciding who their roommates would be.

THE LONG-TERM CARE DELIVERY SYSTEM

Nursing home administrators should have an understanding of the com-petitive environment. They must also understand the array of comple-mentary services within the long-term care delivery system. The broad


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discussion presented in this section provides an overview of the system.The full range of long-term care services is referred to as the continuumof long-term care.

The long-term care-delivery system has three major components:

● The informal system● The community-based system● The institutional system

The first component, informal care, is the largest, but it generally goesunrecognized. It is largely unfinanced by insurance and public programs,but it includes private-duty nursing arrangements between private indi-viduals. The other two components have formalized payment mecha-nisms to pay for services, but payment is not available for every type ofcommunity-based and institutional service. In many situations, peoplereceiving these services must pay for them out of their personal resources.

Although institutional management is the key focus of this book, theother two components, informal care and community-based service, alsohave important implications for administrators who manage long-termcare institutions. The community-based services and informal systemscompete with the institutional system in some ways, but are also comple-mentary. As such, the community-based and informal components oflong-term care are very much a part of the external environment of theinstitutional component.

The three subsystems that form the continuum of long-term care areillustrated in Figure 1-5. The patients’ levels of acuity and the complexityof services they need increase from one end of the continuum to theother. Informal care provided mainly by family members or friendsinvolves basic assistance, and is at one extreme of the continuum. Nexton the continuum are the various community-based in-home servicesand ambulatory services. Finally, there are different levels of institutionalsettings.

An evaluation of the extent of disability and personal needs determineswhich services on the continuum may be best suited, but client prefer-ences often play a significant role. Most people in need of long-term care,for instance, prefer to stay at home or in an institution where the envi-ronment is less clinical than in a traditional nursing home. Medical needs,however, may override one’s personal preferences. Generally, a patient isadmitted to a nursing facility when medical needs become the overriding

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factor, and a patient’s long-term care needs cannot be adequately ad-dressed in a less restrictive setting.

In recent years, numerous public and private health care organizationshave proliferated, organizations that offer information to consumers onhow to care for someone at home, how to find and pay for community-based services, and how to find an appropriate institutional setting. A listof Web sites at the end of this chapter names several such agencies.

The Informal SystemThe informal long-term care system is very large. An accurate estimate ofits size is difficult, mainly because the system is not formally organizedand it cannot even be called a system in the true sense. Hence, there is noreporting on how many people are cared for informally at home, andexactly what type of services family, friends, or privately paid help may beproviding. For the most part, services rendered are believed to be basic,such as general supervision and monitoring, running errands, dispensing


FIGURE 1-5 The Continuum of Long-Term Care

The Community-based System of Long-Term Care

The Institutional System of Long-Term Care

The Informal System In-Home Services Ambulatory Services Inpatient Services

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medications, cooking meals, assistance with eating, grooming and dress-ing, and, to a lesser extent, assistance with mobility and transfer.

The extent of informal care that an individual receives is highlydependent on the extent of the social support network the individual has.People with close family, friends, neighbors, or surrogates, such as mem-bers of a religious community, can often continue to live independentlymuch longer than those who have little or no social support. For thosewho do not have an adequate informal support network, community-based services provided by formal agencies can become an importantresource for allowing an individual to continue to live independently.

The Community-Based SystemCommunity-based long-term care consists of formal services provided byvarious health care agencies. Community-based long-term care serviceshave a threefold objective:

(1) To supplement informal caregiving when more advanced skills areneeded than what family members or surrogates can provide toaddress the patients’ needs,

(2) To delay or prevent institutionalization, and(3) To provide temporary respite to family members from caregiving

stress.

Community-based long-term care services can be categorized as intra-mural and extramural.

Intramural Services

Intramural services are taken to patients who live in their own homes,either alone or with family. The most commonly used intramural servicesinclude home health care and meals-on-wheels (home-delivered meals).Limited social-support programs that provide services such as home-maker, chores and errands, and handyman assistance also exist, but thefunding to pay for such services is not well-established and varies fromcommunity to community. In home health care, services such as nurs-ing, therapy, and health-related homemaker or social services are broughtto patients in their own homes because such patients do not need to be inan institution and yet are generally unable to leave their homes safely toget the care they need.


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Extramural Services

Extramural services require that patients come and receive the services ata community-based location. This category mainly includes ambulatoryservices, such as adult day care, mental health outpatient clinics, and con-gregate meals provided at senior centers. Respite care is another type ofservice that can be classified as extramural.

Adult day care enables a person to live with family but receive profes-sional services in a daytime program in which nursing care, rehabilita-tion therapies, supervision, and social activities are available. Adult day-care centers generally operate programs during normal business hoursfive days a week. Some programs also offer services in the evenings andon weekends. Senior centers are local community centers where seniorscan congregate and socialize. Many centers offer a daily meal. Otherssponsor wellness programs, health education, counseling services, infor-mation and referral, and some limited health care services. Respite carecan include any kind of long-term care service (adult day care, homehealth, or temporary institutionalization) when it allows family care-givers to take time off while the patient’s care is taken over by the respitecare provider. It allows family members to get away for a vacation or dealwith other personal situations without neglecting the patient.

The Institutional SystemA variety of long-term care institutions form the institutional continuum,with facilities ranging from independent-living or retirement centers atone extreme to subacute care and specialized care facilities at the otherextreme (See the lower section of Figure 1-5). Based on the level of serv-ices they provide, institutional long-term care facilities may be classifiedunder six distinct categories, keeping in mind, however, that the distinc-tions among these facilities are not always clear-cut because services pro-vided in some of the settings frequently overlap:

● Independent or Retirement Living● Residential or Personal Care● Assisted Living● Skilled Nursing● Subacute Care● Specialized Care


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A continuing-care retirement community (CCRC) integrates andcoordinates the independent living and institutional components of thelong-term care continuum. CCRCs offer the advantage and convenienceof having a range of living and care options located on one campus. Basedon the concept of aging-in-place, people’s changing needs are met withinthe same organizational setting. In addition to retirement and residentialliving apartments or cottages, CCRCs have personal care and assisted liv-ing services available in an adjoining facility. A separate skilled nursingfacility provides intermittent as well as permanent accommodations basedon changing needs.

Independent or Retirement Housing

Independent housing units and retirement living centers are not long-term care institutions in the true sense. They do not deliver clinical carebut emphasize privacy, security, and independence. Their special featuresand amenities are designed to create a physically supportive environmentto promote an independent lifestyle. The living quarters are equippedwith emergency call systems. Many of these facilities provide monthlyblood pressure and vision screenings, and most organize programs forsocial activities, recreation, and local outings for shopping and entertain-ment. Hotel services such as meals, housekeeping, and laundry may ormay not be included. Apartment units or detached cottages, equippedwith kitchenettes and private baths, are the most common types of retire-ment institutions. Common laundry rooms are often shared with otherresidents. Nursing or rehabilitation services, when needed, can bearranged with a local home health agency. Many upscale retirement cen-ters abound, in which one can expect to pay a fairly substantial entrancefee plus a monthly rental or maintenance fee. But some communities havegovernment-subsidized housing units available for low-income elderlyand disabled people.

Residential or Personal Care Homes

Domiciliary care facilities, board-and-care homes, and foster-care homesfall into this category. Residential or personal care can be defined as non-medical custodial care which is characterized by the least intensive levelof inpatient care. In addition to providing a physically supportive envi-ronment, these facilities generally provide light assistive care such as med-ication use management, and assistance with bathing and grooming.


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Other basic services such as meals, housekeeping, laundry, and social andrecreational activities are also included. Beyond the very basic nursingcare, more advanced services can be arranged with a local home healthagency on an as-needed basis.

For many people, adult foster-care homes, which are also called grouphomes, have become a preferred alternative to large institutions. Adultfoster care (AFC) is defined as a service characterized by small, family-runhomes that provide room, board, and varying levels of supervision, over-sight, and personal care to non-related adults who are unable to care forthemselves (AARP Studies Adult Foster Care 1996). The environment inthese homes promotes the feeling of being part of a family unit becausecaregiving families reside in part of the home, and the number of residentsis relatively small, generally between 6 and 10. Employed staff generallyconsists of nursing paraprofessionals, such as personal-care aides who donot require a license or professional certification to deliver care. Similarworkers employed in nursing homes must be certified by the state.

Because personal care homes are located within residential communities,they are sometimes regarded as a community-based rather than an institu-tional service.

Assisted Living Facilities

In the past few years, assisted living has been the fastest-growing type oflong-term care facility in the United States. An assisted-living facility canbe described as a residential setting that provides personal care services,24-hour supervision, scheduled and unscheduled assistance, social activi-ties, and some nursing care services (Citro and Hermanson 1999).Common nursing services include assistance with eating, bathing, dress-ing, toileting and ambulation, which are rendered by paraprofessionals.Most residents also require help with medications. Some facilities have askeleton staff of licensed nurses, generally licensed practical (or voca-tional) nurses, who perform admission assessments and deliver basic nurs-ing care. Advanced nursing care and rehabilitation therapies can bearranged through a home-health agency. The services are speciallydesigned for people who cannot function without assistance and thereforecannot be accommodated in a retirement-living or residential-care facility.Due to increased acuity level, approximately one-third of the residents inassisted-living facilities are discharged because they need the higher levelof service that is provided in skilled care nursing homes.


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Assisted living is paid for on a private basis for the most part. Monthlyfees are between $2,000 and $2,800, but costs vary according to ameni-ties, room size and type (e.g., shared versus private), and the servicesrequired by the resident. Most facilities charge a basic monthly rate thatcovers rent, board, and utilities. Additional fees are charged for nursingservices. Many facilities also charge a one-time entrance fee, which maybe equal to one month’s basic rent. In some states, assisted-living care maybe covered under the Medicaid program for SSI recipients, or may befunded through Title XX Social Services Block Grants or 1915(c) HCBS(home and community-based services) waivers. The main purpose ofthese grants and waivers is to extend Medicaid services to people who oth-erwise would have to reside in nursing homes at a much higher cost to theMedicaid program. Although most states license assisted-living facilities,the trend is toward increasing the regulatory oversight of these facilities.

Because of the phenomenon of aging-in-place, the distinction betweenresidential/personal care and assisted living is being blurred, from the stand-point of the level of services. However, compared to personal-care homes,assisted-living facilities are generally larger in size and offer some nursingservices that were previously available only in traditional nursing homes.

Skilled Nursing Facilities

These are the typical nursing homes at the higher end of the institutionalcontinuum that will be the focus of attention in the remainder of thisbook. Skilled nursing care is medically oriented care provided by alicensed nurse. It includes monitoring of unstable chronic conditions,evaluation of the patient’s care needs, and nursing and therapy treat-ments. The patient’s treatment plan is individualized and involves multi-disciplinary input from various health care professionals, such as theattending physician, nurses, the social worker, the dietician, therapists,and others. Compared to the institutions discussed earlier, the environ-ment in skilled nursing facilities is more institutionalized and clinical. Yet,many facilities have implemented creative ideas in layout and design tomake their living environments as pleasant and homelike as practicable.Some of these ideas are discussed in Chapters 5 and 6.

These facilities employ full-time administrators who must understandthe varied concepts of clinical and social care and have been trained inmanagement and leadership skills. The facility must be adequatelyequipped to care for patients who require a high level of nursing services


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and medical oversight, yet the quality of life must be maximized. A vari-ety of disabilities—including problems with ambulation, incontinence,and behavioral episodes—often coexist among a relatively large numberof patients. Compared to other types of facilities, nursing homes have asignificant number of patients who are cognitively impaired, besides hav-ing physical disabilities and conditions requiring medical intervention.The social functioning of many of these patients has also severelydeclined. Hence, the nursing home setting presents quite a challenge toadministrators in the integration of the four service domains discussedearlier—medical care, mental health care, social support, and residentialservices.

Subacute Care Units

Subacute care is a blend of intensive medical, nursing, and other services.It has become a substitute for services that were previously provided inacute care hospitals, and it has grown because it is a cheaper alternative tohospital stay. Now, patients who no longer need hospital-based acute care,but require more nursing intervention than what is typically included inskilled nursing care, can receive subacute services in specialized settings.The patients may still have an unstable condition requiring active moni-toring and treatment, or they may require technically complex nursingtreatments such as wound care, intravenous therapy, blood transfusion, orAIDS care. According to the National Subacute Care Association(NSCA), the severity of a patient’s condition often requires active physi-cian contact, professional nursing care, involvement of an interdisciplin-ary team in total care management, and complex medical or rehabilitativecare (NSCA 1996). Subacute services are generally found in two types oflocations:

(1) Long-term care units, known as transitional care units (TCUs) orextended care units (ECUs), located in acute care hospitals.Hospitals entered into this service after they started facing severeoccupancy declines because of payment restrictions from the gov-ernment, starting in the mid-1980s.

(2) Many nursing homes have opened subacute units by raising thestaff skill mix by hiring additional registered nurses and havingtherapists on staff. Some subacute type services are also rendered bycommunity-based home health agencies.


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Specialized Care Units or Facilities

By their very nature, both subacute care and specialized care place highemphasis on medical and nursing services. Some nursing homes haveopened specialized-care units for patients requiring ventilator care, treat-ment of Alzheimer’s disease, special rehabilitation, or closed head traumacare. There are also freestanding facilities that specialize only in treatingAlzheimer’s or in rehabilitation. Other specialized facilities include inter-mediate care facilities for the mentally retarded (ICF/MR). The key distin-guishing feature of the latter institutions is specialized programming andcare modules for patients suffering from mental retardation and associateddisabilities. Physical incapacity and mental retardation often accompanydevelopmental disabilities arising in early childhood. Specialized pedi-atric long-term care facilities fulfill the care needs for such children.

THE NON-LONG-TERM HEALTH CARE SYSTEM

Health care services described in this section are complementary to long-term care. Even though these services fall outside the long-term caredomain, they are often needed by long-term care patients. Hence, ideally,the two systems—long-term care and non-long-term care—should berationally linked. Following are the main non-long-term care services thatare complementary to long-term care:

● Primary care delivered by community-based physicians located insolo or group practices and walk-in clinics. By definition, primarycare is medical care that is basic, routine, continuous over time andcoordinated. It is rendered and coordinated by a primary-care physi-cian or a mid-level provider such as a physician’s assistant or nursepractitioner. Primary care is brought to the patients who reside innursing homes, whereas those residing in less institutionalized set-tings such as retirement living communities or personal care homescommonly visit the primary care physician’s office.

● Mental health care delivered by community-based mental-healthoutpatient clinics and psychiatric inpatient hospitals.

● Specialty care delivered by community-based physicians in specialtypractices, such as cardiology, ophthalmology, dermatology, or oncol-ogy. Certain services are also delivered by free-standing chemother-

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apy, radiation, and dialysis centers. Other services are provided bydentists, optometrists, opticians, podiatrists, chiropractors, and audi-ologists in community-based clinics or mobile units that can bebrought to a nursing home. In case of frequently needed services,such as dental, optometric, and podiatric care, nursing homes estab-lish contracts with providers, and in many instances these providersmake periodic rounds of the facility for screening and preventive care.

● Acute care delivered by hospitals and outpatient surgery centers.Acute care is short-term, intense medical care for an episode of ill-ness or injury, which generally requires hospitalization. Hence, acuteconditions require transfer to a hospital by ambulance. Dependingon the patient’s condition, surgical procedures may be performed inan outpatient center or a hospital.

● Diagnostic and health screening services offered by hospitals, com-munity-based clinics, or mobile medical services. Some commontypes of services brought to nursing homes include preventive den-tistry, x-ray, and optometric care.

● Hospice care that can be directed from a hospital, home healthagency, nursing home, or free-standing hospice. Also referred to asend-of-life care, the term hospice is used for a cluster of special ser-vices for the terminally ill. It blends medical, spiritual, legal, financial,and family-support services. However, the emphasis is on comfortand pain management, and on social support over medical interven-tion. The option to use hospice means that temporary measures toprolong life will be suspended. The services are generally brought tothe patient, although a patient may choose to go to a free-standinghospice center if one is available.

Rational Integration of Long-Term Care and Complementary ServicesThe system of long-term care is part of a larger continuum of health careservices. Types of services comprising the broader health care continuumare summarized in Table 1-1. Long-term care patients, regardless of wherethey may be residing, frequently require a variety of services along thehealth care continuum, dictated by the changes in the patient’s conditionand episodes that occur over time. As an example, a person living at homemay undergo partial mastectomy for breast cancer, return home under the


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care of a home health agency, require hip surgery after a fall in the home,and subsequently be admitted to a skilled nursing facility for rehabilita-tion. This individual will need recuperation, physical therapy, chemother-apy, and follow-up visits to the oncologist. Once she is able to walk withassistance and her overall condition is stabilized, she may wish to bemoved to an assisted living facility. To adequately meet the changingneeds of such a patient, the system requires rational integration, but theflow of care is not always as smooth as it should be. Integrated care alsorequires an evaluation of the patient’s needs in accordance with the typeand degree of impairment, and a reevaluation as conditions change.Depending on the change in condition and functioning, the patient maymove between the various levels and types of long-term care services andmay also need transferring between long-term care and non-long-termcare services. Figure 1-6 illustrates these concepts.

T H E N O N - L O N G - T E R M H E A LT H C A R E S Y S T E M 37

Table 1-1 The Continuum of Health Care Services

Types of Health Services Delivery Settings

Preventive care Public health programsCommunity programsPersonal lifestyles

Primary care Physician’s office or clinicSelf-careAlternative medicine

Specialized care Specialist provider clinics

Chronic care Primary care settingsSpecialist provider clinicsHome healthLong-term care facilitiesSelf-careAlternative medicine

Long-term care Long-term care facilitiesHome health

Subacute care Special subacute units (hospitals, long-term care facilities)

Home healthOutpatient surgical centers

Acute care Hospitals

Rehabilitative care Rehabilitation departments (hospitals, long-term care facilities)

Home healthOutpatient rehabilitation centers

End-of-life care Hospice services provided in a variety of settings

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Having primary responsibility for ensuring that each patient’s totalhealth care needs are met, administrators must institute working relation-ships with external agencies. As basic needs change, or episodes occur, thefacility must coordinate delivery of appropriate services. In someinstances, the patient may be actually moved to a more appropriate facil-ity. This responsibility includes determining which residential setting willbe the most appropriate, given the level of support offered by commu-nity-based services. Linkages with agencies in both the long-term care andthe broad health care delivery sectors are established through contracts insome cases, and through mutual working relationships in others. Sometypes of transfer arrangements, such as those with acute care hospitals, are


FIGURE 1-6 Key Characteristics of a Well-Designed LTC System

Health care delivery system

Promotion of independentfunctioning

Access to appropriateLTC services

Eval

uatio

nan

dre

eval

uatio

n

Individual needs

Type and degreeof impairment

Rational integration

Long-term careservices

Non-long-term careservices

KEY CHARACTERISTICS

1. The LTC system is rationally integrated with the rest of the health care deliverysystem. This rational integration facilitates easy access to services betweenthe two components of the health care delivery system.

2. Appropriate placement of the patient within the LTC system is based on anassessment of individual needs. For example, individual needs determinewhether and when institutionalization may be necessary.

3. The LTC system accommodates changes in individual needs by providingaccess to appropriate LTC services as determined by a reevaluation of needs.

4. LTC services are designed to compensate for existing impairment and have theobjective of promoting independence to the extent possible.

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mandated by state and federal regulations. Alliances with other serviceproviders often create mutual advantages for the two parties in eachexchange when a patient referral base is established. Administrators canalso develop community outreach programs, such as screening and educa-tional programs, case management, or meals-on-wheels, to enhance theirfacility’s image and to create goodwill in the community. A clear under-standing of the continuum of services can also enable the administrator tosee strategic opportunities to establish new services. For instance, a nurs-ing home can open a home health agency, a hospice program, an outpa-tient rehabilitation clinic, a respite-care program, specialized care units, orother types of operations.

CONCLUSION

Effective management is founded on open system theory. To obtain criti-cal resources, a nursing facility has no choice but to depend on the exter-nal environment. What the facility receives is a function of what it givesback. Also, external trends and events shape management decisions andstrategic action. To guide major decision-making, nursing facility admin-istrators should understand the six external environmental domains toidentify the nature of external demands and their likely impact on thefacility’s internal operations.

The need for long-term care services is triggered by the degree of func-tional impairment, but a variety of services must be provided in a holisticcontext to meet the varied needs of a long-term care patient with the goalof promoting the maximum level of self-functioning. Long-term carecomprises a number of different services along a continuum of care toaddress the changing needs of patients over time. The rational integrationmodel suggests that facility administrators must institute working rela-tionships with external agencies—both long-term care and non-long termcare—because the administrators are primarily responsible for ensuringthat each patient’s total health care needs are met.

DISCUSSION AND APPLICATION QUESTIONS

1. As a nursing home administrator, would you adopt the closed-system or the open-system approach to management? Explain.

D I S C U S S I O N A N D A P P L I C A T I O N Q U E S T I O N S 39

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2. Is the open-system approach needed only when the organizationfaces challenges or tries to take advantage of emerging opportunities?Explain?

3. W.R. Dill identified four environmental factors that are necessaryfor organizational goal achievement: (1) customers; (2) suppliersof labor, materials, capital, etc.; (3) competitors for both marketsand resources; and (4) regulatory groups. What contribution, ifany, does each of these factors make in enhancing the organiza-tional effectiveness of a nursing facility? What is the interrelation-ship between these four factors?

4. Both formal and informal processes can be employed to carry outenvironmental scanning. Discuss some of the formal and informalmeans that a nursing home administrator can employ to identifysignificant environmental trends.

5. Identify the various entities in a nursing facility’s primary proxim-ity. What influences might each have on the organization? Again,using the four-level model of proximities, discuss the influencesvarious entities may have on a nursing facility.

6. How does long-term care differ from other types of medical services?7. Why is it important that employees in nursing facilities not per-

form every task of daily living for a patient? How much shouldemployees do for patients who have functional impairments?

8. What type of exchanges can be created to enhance the social andspiritual well-being of a facility’s patients?

9. Identify some staff practices that will promote each individual res-ident’s privacy and dignity.

10. As an administrator of a skilled nursing facility, how can an under-standing of the long-term care continuum help you operate thefacility effectively?

INTERNET RESOURCES FOR FURTHER LEARNING

AARP (formerly, American Association of Retired Persons): The nation’sforemost consumer-oriented agency that concerns itself with numerousissues related to aging and long-term care.www.aarp.org


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Alliance for Aging Research: The nation’s leading citizen advocacy organiza-tion for improving the health and independence of Americans as they age.The Alliance was founded in 1986 to promote medical and behavioralresearch into the aging process.http://www.agingresearch.org

ARCH National Respite Network and Resource Center: This organizationassists and collaborates with those who run programs that provide respitefor caregivers of adults and the elderly.http://www.archrespite.org

Assisted Living Federation of America: A group that offers basic consumer-oriented information on assisted living and gives a directory of assisted liv-ing facilities. This trade organization represents assisted living and othersenior housing facilities.www.alfa.org

Family Caregiver Alliance: A nonprofit organization set up to provide infor-mation and resources to address the needs of families and friends provid-ing long-term care at home. http://www.caregiver.org

The George Washington Institute for Spirituality and Health: Affiliated withthe George Washington University, the Institute is a leading organizationon educational and clinical issues related to spirituality and health.http://www.gwish.org/

Hospice Foundation of America: A nonprofit organization that providesleadership in the development and application of hospice and its philoso-phy of care.http://www.hospicefoundation.org

The Meals On Wheels Association of America: This organization representsthose who provide congregate and home-delivered meal services to peoplein need. www.mowaa.org

Medicaid: A jointly funded federal-state health insurance program for theindigent.http://cms.hhs.gov/medicaid

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Medicare: A federal program of health insurance for the elderly and some dis-abled persons.http://cms.hhs.gov/medicare

National Adult Day Services Association: This organization represents theadult day-care industry and also furnishes consumer information.http://www.nadsa.org/

National Association for Home Care and Hospice: The nation’s largest tradeassociation representing the interests and concerns of home care agencies,hospices, home care aide organizations, and medical equipment suppliers.http://www.nahc.org

National Citizens’ Coalition for Nursing Home Reform: This consumerwatchdog organization lobbies to influence long-term care policy, pro-motes quality standards, and works to empower nursing home residents.www.nccnhr.org

National Council on Aging: A private, nonprofit organization providinginformation, training, technical assistance, advocacy, and leadership in allaspects of care for the elderly. It provides information on training pro-grams and in-home services for older people. Publications are available ontopics such as lifelong learning, senior center services, adult day care, long-term care, financial issues, senior housing, rural issues, intergenerationalprograms, and volunteers serving the aged.www.ncoa.org

National Family Caregiver Support program: A government program estab-lished under the Administration on Aging to provide information andsupport services to family caregivers.http://www.cfda.gov/public/viewprog.asp?progid=1547

National Hospice Foundation: A nonprofit, charitable organization affiliatedwith the National Hospice and Palliative Care Organization that providessupport and information about hospice care options. www.hospiceinfo.org

National Mental Health Association: The country’s oldest and largest non-profit organization that addressess all aspects of mental health and mentalillness. www.nmha.org


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Citro, J., & S. Hermanson. 1999. Fact sheet: Assisted living in the United States.Washington, DC: American Association of Retired Persons.

DHHS. 1999. Mental health: A Report of the Surgeon General. Rockville, MD:U.S. Department of Health and Human Services.

Dill, W.R. 1958. Environment as an influence on managerial autonomy.Administrative Science Quarterly, 2, 409–443.

Feld, S. & George, L.K. 1994. Moderating effects of prior social resources onthe hospitalizations of elders who become widowed. Journal of Aging andHealth, 6, 275–295.

Health Care Financing Administration. 1996. Nursing home quality of lifestudy spotlights residents’ concerns. Health Care Financing Review 17, no. 3:324.

Hoyert, D.L., Kochanke, K.D., & Murphy, S.L. 1999. Deaths: Final data for1997. National Vital Statistics Reports, 47 (9). Hyattsville, MD: NationalCenter for Health Statistics.

Krause, N., & Borawski-Clark, E. 1994. Clarifying the functions of social sup-port in later life. Research on Aging, 16, 251–279.

McLeod, B.W. 2002. And Thou Shalt Honor: A Caregiver’s Companion. Wiland-Bell Productions, distributed by Rodale at www.rodalestore.com.

NSCA. 1996. Definition of subacute care as developed and approved by theNSCA board of directors, June 27, 1996. Available: http://www.nsca.net/info/definition.htm

Robbins, S.P. 2000. Managing Today, 2nd ed. Upper Saddle River, NJ: PrenticeHall.

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