How hospitals can lose money by relying on hospitalists

Are hospitals victims of hospitalists’ success?

Interesting observation from cardiologist Dr. Wes, writing in Better Health. He notes that hospitalist services are so busy that they are limited in the number of patients they see. That’s similar to the caps many medicine programs have on their residents.

Who, then, takes care of the patient?

It won’t be the primary care doctor, who has divorced himself from inpatient care (besides, as a patient, would you want a doctor who hasn’t set foot in a hospital in years taking care of you?)

So, as Dr. Wes notes, the patients will languish in the emergency department, “even though the patient absolutely, positively does not need the ER.”

In many cases, hospitals are forced to hire more hospitalists to meet demand, or risk burning out the inpatient physicians they already have:

It appears hospitalist services are increasingly finding themselves overwhelmed with admissions and the promise of a reasonable lifestyle can be assured by either limiting the number of patients admitted to each hospitalist or hiring more of them. But new hires are becoming tougher to justify in this “do more with less” economic time in medicine. As a result, it appears existing hospitalists are quickly finding they’ve hit the peak speed of their clinical-care gerbil wheels.

And you can bet that this will affect any potential cost savings that comes from embracing the hospitalist movement.

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  • ninguem

    In times past, when primary care docs took care of their own patients in the hospital, they were giving away their services.

    Their on-call time. The time away from their office, while still paying for the overhead of that office. Frankly, their lives. If they worked all night and had a full office the next day, that was the doc’s problem.

    Atlas shrugged.

    Now, someone else is being paid to do the services that the private docs formerly did for free. You can, for example, replace PCP’s with nurse-practitioners. Thing is, you will need an adult NP for the adults, a pedicatric NP for the kids, women’s health, mental health, and pay someone to take the calls.

    Actually, there are free-standing 100% NP clinics in my area. I have had their patients end up in my office. I needed to call their office about 5-PM for a purely administrative matter. I had just seen one of their patients. The NP clinic just had an answering maching that says “Go to the nearest ER” and wouldn’t take the message to call me in the AM.

    So maybe they don’t need to take call.

    Committee work, fine, but now someone is being paid to attend that meeting, meaning someone is not available on the wards, so hire more personnel.

    In any event, this reflects work that PCP’s used to do for free, now the system is paying someone to do.

  • Jenga

    It think you gave an excellent analysis family, but I disagree with the thought that if an ER doc thinks an admission is justified it should be so. We have all seen “soft” or “social” admits and a hospitalist might be just as justified for refusing an admit. It is similar in some aspects as a nonsurgeon disagreeing with a surgeon that a patient needs surgery. I would always defer to the one that ultimately had to perform the work.

  • http://www.drjshousecalls.blogspot.com Dr. Mary Johnson

    Hospitals flip from extremes. It’s their own fault.

    The major reason the hospitalist “movement” exists today is because primary care docs – who once-upon-a-time covered call at their local hosptial out of a sense of duty to their patients and as a “courtesy” to the hospital/community, were hammered, used and horribly abused by executives and administrators who just kept piling it on.

    After a while, not having any kind of life gets old. Many docs got disgusted and pulled out. Hopsitals were forced to used locums (an even more expensive proposition than hospitalists) and/or convert to the hospitalist model.

    It’s the reason I’ve had a job for going on 12 years – having been on the wrong end of a “non-profit” hospital’s “private practice” screw myself (in my own hometown) before hitting the road.

    In many smaller towns and hospitals where this has happened, hospitalists do not make a “profit” in the classic sense. I’m paid by the hour or (right now) on salary – knowing full well that I’m not billing what they’re paying me. But here’s the thing about that: I cannot help what comes in the door. I’m just there when it does. And I’m worth it when it does.

    Hospitalists keep the doors open . . . supporting the money-makers like the ED/Surgery/OB, and they cover the call. And call is call. Their time covering is is worth something – especially in areas oftentimes referred to as “podunk”.

    Will it last? I dunno. I doubt it. But right now it works for me. And it’s about time medicine worked for me.

    Another thought: Hospital executives certainly have no qualms about upping their usually already inflated salaries & bene packages every year – even when their decisions turn to crap. I don’t see anybody complaining about that bad business model.

  • jsmith

    Our group stopped doing hospital rounds 2 months ago, partly at the behest of the hospital, which wanted more business for its hospitalists. For me it was after 20.5 years of hospital work. If the hospitalist system crashes and burns, it’s their problem. I have no intention of doing inpt anymore unless someone puts a gun to my head.

  • http://storytellerdoc.blogspot.com storytellerdoc

    Excellent post and perspective, to both you and Dr. Wes.

    • Edward Abratowski

      This has not been the experience at the large community hospital in the San Francisco bay area where I manage a group of 13 hospitalists including 3 nocturnists. We have a stable group that does not leave patients languishing in the ER. The night coverage is critical to avoid burnout among the hospitalists that work during the day. I can see myself doing this work for years.

  • family practitioner

    It is not personal.
    I have nothing against hospitalists and hope that hospitalists have nothing against me. In fact, hospitalists and I have much in common: we were all attracted to primary care, but then disillusioned by the realities of this.

    However, when I am part of discussions regarding the viability of the hospitalist model, I am frequently the sole voice saying that it will NOT last.

    My reasoning is simple:
    1. Very few hospitalist programs are financially viable; in fact, your typical hospitalist brings in approximately 50% of his/her salary with the remaining 50% being subsidized by the hospitalists. This is otherwise known as a bad business model. As time goes on, more and more hospital CEO’s are going to “squeeze” the hospitalists, force them to do more fore less and the appeal of the field will diminish.

    2. It is really hard work. We were all residents once. A hospitalist has similarities to this (although there are differences before everyone starts getting defensive). Patients are tough. They are non-compliant. They are dependent. They are litiginous. They decide to come to the hospital at times of convenience, ie the middle of the night. Families are tough. They won’t take grandma home when it is time. Medicare/medicaid/insurance companies are all tough, they want you to “move quickly” and follow their regulations. Specialists are tough. The list goes on.

    3. Contrary to the prevailing wisdom that hospitalists have been “proven” to save money and shorten stay, this is far from a given conclusion upon review of the literature. Some studies show a benefit, albeit modest, and others do not. Some studies were flawed, ie comparing a hosptialist program to a residency program.

    The bottom line is that the hospitalist movement is a flawed solution to a flawed system, and therefore is non-sustainable.

    In my community, the hospitalist program has difficulty attracting, and retaining, quality hospitalists. Everyday, there is growing tension between them and the ER; if an ER doc says admission is justified, there should not be a debate. However, arguments are becoming more commonplace. And contrary to the prevailing mantra that hospitalists always communicate with the PCP’s, my colleagues who depend on them frequently tell me this is not the case.

    Subsidized hospitalists are not the answer. Subsidized primary care is. Incentize us to provide full access care, including hospitalization. This will encourage continuity of care which, I believe, will improve quality and decrease cost.

  • http://thehappyhospitalist.blogspot.com Happy Hospitalist

    The reason hospitalists are the fastest growing medical subspecialty has everything to do with the value that $100,000 per doctor subsidy brings to the table. I see the benefits first hand. Hospitals are crawling over each other for the right to PAY doctors for the value they bring. I have written many posts about the real value that hospitals gain, completely independent of of the actualy fee for service dollars hospitalists generates.

    It’s millions upon millions of dollars a year. If anything, we are highly undervalued as a medical specialty. And that’s why salaries keep going up. Because the value is just now being unlocked.

    Administrations that understand that wouldn’t go back to the old ways. Not in a million years. The administrations that don’t get it will be left behind.

  • Sue

    I would have to disagree with “family practitioner.” My husband was recently in the hospital and most of the patient contact was handled by physician assistants. My husband saw a hospitalist 12 hours after admission and on the way out. The PA’s dealt with the front line difficulties while the doctors were in the background.

  • alex

    This is amusingly analogous to the UK where the government offered to let GPs out of their call duties if they took a moderate pay cut. They jumped at it and I think it ended up costing the government something like ten times more to pay for all that formerly free work. Medicare has been getting a free ride from PCPs covering their in-hospital patients; that “revenue” hospitalists are so proud of generating out of thin air is just another new cost to the health care system.

  • anonymous

    the rise of the hospitalists corresponded with the elimination of consultation payments. coincidence?

  • TrenchDoc

    After 31 years of doing BOTH hospital and office on a daily business. 31 years of on call every 4th night with no sleep and a full office the next day. 31 years of middle of the night calls from nurses to ” just thought you would want to know” . I left the hospital for the full time office gig. Yea, I miss it and my income is down 10 percent but I have a life and I get a good night’s sleep every night. I consider it a good trade off and wonder why I didn’t do it 31 years ago. It is only because I was brain washed during my medical training to suck it up. Now society is paying the price by not having me available , the physician who knows 20 years of the patient’s medical history. If society wants that again then you pay me or my successors. The cheap ride is over. In this world you still get what you pay for. The primary care doc has been liberated from his role as the “scut rod”. Now if only we can be liberated from the insurance companies and the lawyers, we might be able to practice medicine for the benefit of our patients.