How hospitalists can provide high quality patient care at the lowest possible cost

by Bob Wachter, MD

Much has been made of the superior performance – on both cost and quality – of integrated health care organizations like the Mayo and Geisinger Clinics. But since the defining characteristic of these standout systems is at least 50 years of integrated history, few believe that the rest of us – namely the docs and hospitals that provide the bulk of American health care – can quickly achieve such seamless integration, even if the perfect bill emerges from the Congressional sausage factory.

And it’s increasingly clear that the perfect bill will not be coming out of Washington this year.

Is hope lost? Is it possible to create tighter integration between hospitals and doctors without a legislative Attaboy? Can health care organizations and physicians be incented to deliver the highest quality, safest, most reliable, most patient-centric care at the lowest possible cost without Atul Gawande reading the findings of the Dartmouth Atlas into the Congressional Record?

I think they can, if they have a strong hospitalist program.

I know that some accuse me of seeing hospitalists as the answer to every question (“What did you have for breakfast today, Bob?” “Oh, hospitalists.”). They’re not. They won’t do anything to tackle the excesses of the McAllen, Texas’s of the nation, where most of the shenanigans take place in the netherworld of doctor-owned clinics and surgi-centers. And – although many hospitalists now staff inpatient specialty services like orthopedics and neurosurgery – it is unlikely that they’ll be in a position to tamp down procedural overutilization driven by the specialists.

And I am painfully aware that there are some crummy hospitalist programs out there, capable of perpetuating, even expanding, some of the ills the movement was meant to heal.

Yet I’ve seen many hospitalist programs that have created little islands of Mayo-like practice: with strong hospital-physician partnerships, appropriate focus on both quality and costs, thoughtful balancing of individual and group benefit, real passion for systems improvement, and exemplary physician-nurse teamwork. And I’ve seen these things in organizations that, from the outside, look like the rest of American health care. How can that be?

The answer lies largely in the economics. More than 90% of hospitalists receive financial support from their hospitals (about one-third of hospitalists are directly employed by the hospital, the rest weave the hospital support into other employment models), and relatively few hospitalists are paid under the unfettered fee-for-service model that promotes relentless overutilization.

Precisely the opposite – by accepting support from their hospital, hospitalists find themselves in a uniquely well-balanced incentive environment. Although many receive a productivity bonus, their dominant incentive is that of their hospital: they see the world through a DRG-tinged lens that rewards shorter lengths of stay and lower inpatient costs.

(A brief word of explanation. While most insurers pay hospitalists just like they pay other doctors [namely, for piecework], this fee-for-service revenue stream is blended with the hospital’s support dollars to create a paycheck based on salary, or a salary-plus-bonus. Under this model, the hospitalists’ incentives are aligned with the hospital’s DRG-generated incentive to conserve resources, since these saving partly account for the hospital’s willingness to support this particular group of doctors.)

Moreover, since hospitals are the target of most robust quality reporting, pay-for-performance, and patient safety mandates, hospitalists share their worldview on these issues as well. If I’m getting money from my hospital, I damn well better help the hospital achieve excellent performance on publicly reported hospital quality data, “no pay for errors”, Joint Commission National Patient Safety goals, patient satisfaction scores, readmission rates, and the other scary things that keep my hospital CMO up at night.

In other words, well-organized hospitalist programs share their hospital’s accountabilities.

The result of this set of incentives is that hospitalists should be the best behaved doctors in the building. In my own program at UCSF, we’re just finishing our yearly negotiations with our medical center leadership over their support for the clinical parts of our program (we also have robust research and educational enterprises that support themselves in other ways). I’m acutely aware that there are many things that my hospital can do with its money other than support my group. My arguments for hospital dollars hinge on things that seem like reasonable goals for all of American health care: we provide high quality, safe, patient satisfying care; we meet reasonable efficiency targets; we work hard and make defensible salaries; and we are enthusiastic and effective citizens of our organization. At the Mayo Clinic – which I’ve been privileged to visit several times – that’s how everybody thinks. In most hospitals, it is decidedly not how the fiercely independent physicians have been conditioned to approach their work.

This is why I’m enthusiastic about any policy maneuvers that promote this kind of integration and shared accountability. When these things are successfully achieved, I’ve seen how it changes the nature of practice – not only at the Cleveland Clinics and Kaiser Permanentes of the world, but at hundreds of other hospitals that share none of these organizations’ storied pedigrees and cultural DNA, but do have well functioning hospitalist programs.

The importance of a strong hospitalist program extends beyond direct changes in clinical care. Such programs may help model a new system of less dysfunctional hospital-physician relationships. When the market or policymakers finally get around to forcing hospitals and medical staffs into each other’s metaphorical arms, both parties are more likely to embrace the lessons of their own successful hospitalist program than of bright but distant supernovas like the Mayo Clinic.

Bob Wachter is Professor of Medicine and Chief of the Division of Hospital Medicine at the University of California, San Francisco. Author of 200 articles and 6 books, he coined the term “hospitalist” and is considered one of the nation’s leading experts in health care quality and patient safety. He blogs at Wachter’s World, where this post originally appeared.

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Related posts:

1. Should hospitalists control hospital beds?
2. Hospitalists and the importance of the patient-doctor interaction
3. Hospitalists: Good in theory
4. Are hospitalists financially viable?
5. How will the economy affect the hospitalist profession?
6. How to provide safe, quality hospital care by increasing transparency
7. "Poor-quality medicine is being rewarded; high-quality medicine is being punished"

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Tagged as: health reform, hospital, hospitalist