MHM

Last month, I discussed ED, or “front end,” throughput. This month I will focus on what can be thought of as the two components of “back end” throughput: effective management of length of stay (LOS) and patient discharge in the morning rather than late in the day.

How many times have you heard a well-intentioned administrator ask: “We can’t get patients from the ED to ward more quickly unless we can discharge patients earlier in the day to make beds available. So please round on your potential discharges and get the D/C order written early”?

Easier said than done. But not impossible, if you’re willing to make some adjustments in how you organize your work.

Strategies Re-examined

I provided a list of strategies in my April 2009 column (see “Early-Day Discharge Strategies,” p. 48), and in May 2010 I described in greater detail two ideas that can help with early-morning discharge. The easiest of these is to increase the portion of patients who discharge early in the day. To do this, hospitalists should write in the order section of the chart (not just the progress notes where it can be missed by nursing staff) an order like “possible disch tomorrow” or “Probably discharge Thurs or Fri.” That will help hospital staff anticipate and prepare for discharge, and there is little cost if the patient isn’t ready on the day forecast.

More difficult, but more effective, is fully preparing a patient’s discharge a day ahead of time. I do this on about half or more of my patients and, despite having no rigorous data to prove it, I’m convinced that it makes for better discharges and transitions, and it’s a real stress-reliever for me. My mornings are much less hectic, as I rarely have to devote 30-60 minutes to a discharge while other patients are waiting to be rounded on. And it helps me uncover loose ends like the need to get additional chest imaging to evaluate a possible lung lesion early enough that I can order the additional test without delaying discharge (it can be done the night before).

Note that when billing the discharge visit only, the time spent on the day of discharge counts as billable time. So preparing everything the day before will mean that nearly all discharges will be billed at the lower level: 99238 rather than 99239. You will have to decide for yourself whether losing the ability to bill some discharges at the higher level is worth it. Most hospitals probably will be willing to make up the lost professional fee revenue if it led to a meaningful improvement in the portion of patients with discharge orders early in the day.

One CMS administrator told my consulting partner, Leslie Flores, that discharge summaries can’t be dictated on a day prior to discharge because they have to include all information related to the hospital stay, including any relevant information from the night before discharge. The administrator said that CMS would view this as a surgeon dictating an operative report before performing the operation. (Are there surgeons who are actually doing that?) I think care is better when I do a discharge summary unhurried and with few interruptions in the evening before discharge rather than the busy morning of the discharge day. And I can always add an addendum (and often do) at the time of actual discharge. So you might want to ask your hospital compliance expert about dictating a D/C summary the day before discharge.

A Tricky Proposition

It is pretty easy for administrators to think that the time of day a discharge order is written is nearly always up to the doctor and how they organize their day. To them, it might seem reasonable to expect more than 50% of discharge orders to be written before 10 a.m. or earlier. But wait … it is more complicated than that.

The same administrators care a lot about LOS, which is most commonly reported in days but can also be measured in hours. So the time of day a discharge order is written, arguably the most important determinant of when a patient will vacate a room, is a determinant of LOS. If we’re really managing LOS optimally, we should discharge a patient at the first moment it is clinically appropriate, which means discharging at any hour of the day or night. (Of course, no one is proposing that we discharge and expect patients to vacate rooms in the middle of the night. Yet.)

But that would mean only a small portion of patients would end up with early-morning discharge orders. So excellent LOS management and a high portion of discharge orders written early in the day are incompatible. Setting the target percentage of early-a.m. discharge orders too high probably will increase LOS and defeat the original objective.

Benefits and Costs of Improved Throughput

Let’s say you’re sold on the value of improving throughput. It should lead to improved efficiency and financial performance for your hospital. I suspect it will improve quality and reduce iatrogenesis for some patients, but risk more readmissions and quality lapses or errors for others. And as every department tries to improve their own throughput, there will be a tendency to push problems off on others. For example, it is easy to improve ED throughput if the ED doctor just does a lot less evaluation and sends patients upstairs without much of a workup. Example: “The patient has fever and low sats, so I know he’s going to be admitted. Why should I keep him in the ED to do a workup?”

In fact, I think we should move away from using the ED as a triage unit and send some patients directly from ED triage to the inpatient unit. But we’ll need to put in place systems that make that safe and ensure good care. I don’t think any hospital has such systems in place now.

Let’s say that by 2013 most hospitals have dramatically improved their throughput, have short ED admit decision time to ED departure, and many patients are discharged and vacate their rooms early in the day. And let’s say we’ve been able to do that while maintaining or improving quality of care (we must!). We’ll then have happy patients and hospital administrators, and can bring up this improved performance when negotiating for hospital financial support for our practice. Everyone is happy, right?

Well, won’t this increase marginal or unnecessary admissions and readmissions, and lead to overall increased hospital utilization? After all, if it becomes really quick and easy to admit a patient to the hospital, won’t we do it more often? I think we will, but would never propose that we maintain poor throughput to keep a lid on costs and inappropriate utilization. But we’d better come up with other ways, or improved throughput will just be one more factor contributing to escalating healthcare costs.

Dr. Nelson has been a practicing hospitalist since 1988 and is co-founder and past president of SHM. He is a principal in Nelson Flores Hospital Medicine Consultants, a national hospitalist practice management consulting firm.

Last month, I discussed ED, or “front end,” throughput. This month I will focus on what can be thought of as the two components of “back end” throughput: effective management of length of stay (LOS) and patient discharge in the morning rather than late in the day.

How many times have you heard a well-intentioned administrator ask: “We can’t get patients from the ED to ward more quickly unless we can discharge patients earlier in the day to make beds available. So please round on your potential discharges and get the D/C order written early”?

Easier said than done. But not impossible, if you’re willing to make some adjustments in how you organize your work.

Strategies Re-examined

I provided a list of strategies in my April 2009 column (see “Early-Day Discharge Strategies,” p. 48), and in May 2010 I described in greater detail two ideas that can help with early-morning discharge. The easiest of these is to increase the portion of patients who discharge early in the day. To do this, hospitalists should write in the order section of the chart (not just the progress notes where it can be missed by nursing staff) an order like “possible disch tomorrow” or “Probably discharge Thurs or Fri.” That will help hospital staff anticipate and prepare for discharge, and there is little cost if the patient isn’t ready on the day forecast.

More difficult, but more effective, is fully preparing a patient’s discharge a day ahead of time. I do this on about half or more of my patients and, despite having no rigorous data to prove it, I’m convinced that it makes for better discharges and transitions, and it’s a real stress-reliever for me. My mornings are much less hectic, as I rarely have to devote 30-60 minutes to a discharge while other patients are waiting to be rounded on. And it helps me uncover loose ends like the need to get additional chest imaging to evaluate a possible lung lesion early enough that I can order the additional test without delaying discharge (it can be done the night before).

Note that when billing the discharge visit only, the time spent on the day of discharge counts as billable time. So preparing everything the day before will mean that nearly all discharges will be billed at the lower level: 99238 rather than 99239. You will have to decide for yourself whether losing the ability to bill some discharges at the higher level is worth it. Most hospitals probably will be willing to make up the lost professional fee revenue if it led to a meaningful improvement in the portion of patients with discharge orders early in the day.

One CMS administrator told my consulting partner, Leslie Flores, that discharge summaries can’t be dictated on a day prior to discharge because they have to include all information related to the hospital stay, including any relevant information from the night before discharge. The administrator said that CMS would view this as a surgeon dictating an operative report before performing the operation. (Are there surgeons who are actually doing that?) I think care is better when I do a discharge summary unhurried and with few interruptions in the evening before discharge rather than the busy morning of the discharge day. And I can always add an addendum (and often do) at the time of actual discharge. So you might want to ask your hospital compliance expert about dictating a D/C summary the day before discharge.

A Tricky Proposition

It is pretty easy for administrators to think that the time of day a discharge order is written is nearly always up to the doctor and how they organize their day. To them, it might seem reasonable to expect more than 50% of discharge orders to be written before 10 a.m. or earlier. But wait … it is more complicated than that.

The same administrators care a lot about LOS, which is most commonly reported in days but can also be measured in hours. So the time of day a discharge order is written, arguably the most important determinant of when a patient will vacate a room, is a determinant of LOS. If we’re really managing LOS optimally, we should discharge a patient at the first moment it is clinically appropriate, which means discharging at any hour of the day or night. (Of course, no one is proposing that we discharge and expect patients to vacate rooms in the middle of the night. Yet.)

But that would mean only a small portion of patients would end up with early-morning discharge orders. So excellent LOS management and a high portion of discharge orders written early in the day are incompatible. Setting the target percentage of early-a.m. discharge orders too high probably will increase LOS and defeat the original objective.

Benefits and Costs of Improved Throughput

Let’s say you’re sold on the value of improving throughput. It should lead to improved efficiency and financial performance for your hospital. I suspect it will improve quality and reduce iatrogenesis for some patients, but risk more readmissions and quality lapses or errors for others. And as every department tries to improve their own throughput, there will be a tendency to push problems off on others. For example, it is easy to improve ED throughput if the ED doctor just does a lot less evaluation and sends patients upstairs without much of a workup. Example: “The patient has fever and low sats, so I know he’s going to be admitted. Why should I keep him in the ED to do a workup?”

In fact, I think we should move away from using the ED as a triage unit and send some patients directly from ED triage to the inpatient unit. But we’ll need to put in place systems that make that safe and ensure good care. I don’t think any hospital has such systems in place now.

Let’s say that by 2013 most hospitals have dramatically improved their throughput, have short ED admit decision time to ED departure, and many patients are discharged and vacate their rooms early in the day. And let’s say we’ve been able to do that while maintaining or improving quality of care (we must!). We’ll then have happy patients and hospital administrators, and can bring up this improved performance when negotiating for hospital financial support for our practice. Everyone is happy, right?

Well, won’t this increase marginal or unnecessary admissions and readmissions, and lead to overall increased hospital utilization? After all, if it becomes really quick and easy to admit a patient to the hospital, won’t we do it more often? I think we will, but would never propose that we maintain poor throughput to keep a lid on costs and inappropriate utilization. But we’d better come up with other ways, or improved throughput will just be one more factor contributing to escalating healthcare costs.

Dr. Nelson has been a practicing hospitalist since 1988 and is co-founder and past president of SHM. He is a principal in Nelson Flores Hospital Medicine Consultants, a national hospitalist practice management consulting firm.

Last month, I discussed ED, or “front end,” throughput. This month I will focus on what can be thought of as the two components of “back end” throughput: effective management of length of stay (LOS) and patient discharge in the morning rather than late in the day.

How many times have you heard a well-intentioned administrator ask: “We can’t get patients from the ED to ward more quickly unless we can discharge patients earlier in the day to make beds available. So please round on your potential discharges and get the D/C order written early”?

Easier said than done. But not impossible, if you’re willing to make some adjustments in how you organize your work.

Strategies Re-examined

I provided a list of strategies in my April 2009 column (see “Early-Day Discharge Strategies,” p. 48), and in May 2010 I described in greater detail two ideas that can help with early-morning discharge. The easiest of these is to increase the portion of patients who discharge early in the day. To do this, hospitalists should write in the order section of the chart (not just the progress notes where it can be missed by nursing staff) an order like “possible disch tomorrow” or “Probably discharge Thurs or Fri.” That will help hospital staff anticipate and prepare for discharge, and there is little cost if the patient isn’t ready on the day forecast.

More difficult, but more effective, is fully preparing a patient’s discharge a day ahead of time. I do this on about half or more of my patients and, despite having no rigorous data to prove it, I’m convinced that it makes for better discharges and transitions, and it’s a real stress-reliever for me. My mornings are much less hectic, as I rarely have to devote 30-60 minutes to a discharge while other patients are waiting to be rounded on. And it helps me uncover loose ends like the need to get additional chest imaging to evaluate a possible lung lesion early enough that I can order the additional test without delaying discharge (it can be done the night before).

Note that when billing the discharge visit only, the time spent on the day of discharge counts as billable time. So preparing everything the day before will mean that nearly all discharges will be billed at the lower level: 99238 rather than 99239. You will have to decide for yourself whether losing the ability to bill some discharges at the higher level is worth it. Most hospitals probably will be willing to make up the lost professional fee revenue if it led to a meaningful improvement in the portion of patients with discharge orders early in the day.

One CMS administrator told my consulting partner, Leslie Flores, that discharge summaries can’t be dictated on a day prior to discharge because they have to include all information related to the hospital stay, including any relevant information from the night before discharge. The administrator said that CMS would view this as a surgeon dictating an operative report before performing the operation. (Are there surgeons who are actually doing that?) I think care is better when I do a discharge summary unhurried and with few interruptions in the evening before discharge rather than the busy morning of the discharge day. And I can always add an addendum (and often do) at the time of actual discharge. So you might want to ask your hospital compliance expert about dictating a D/C summary the day before discharge.

A Tricky Proposition

It is pretty easy for administrators to think that the time of day a discharge order is written is nearly always up to the doctor and how they organize their day. To them, it might seem reasonable to expect more than 50% of discharge orders to be written before 10 a.m. or earlier. But wait … it is more complicated than that.

The same administrators care a lot about LOS, which is most commonly reported in days but can also be measured in hours. So the time of day a discharge order is written, arguably the most important determinant of when a patient will vacate a room, is a determinant of LOS. If we’re really managing LOS optimally, we should discharge a patient at the first moment it is clinically appropriate, which means discharging at any hour of the day or night. (Of course, no one is proposing that we discharge and expect patients to vacate rooms in the middle of the night. Yet.)

But that would mean only a small portion of patients would end up with early-morning discharge orders. So excellent LOS management and a high portion of discharge orders written early in the day are incompatible. Setting the target percentage of early-a.m. discharge orders too high probably will increase LOS and defeat the original objective.

Benefits and Costs of Improved Throughput

Let’s say you’re sold on the value of improving throughput. It should lead to improved efficiency and financial performance for your hospital. I suspect it will improve quality and reduce iatrogenesis for some patients, but risk more readmissions and quality lapses or errors for others. And as every department tries to improve their own throughput, there will be a tendency to push problems off on others. For example, it is easy to improve ED throughput if the ED doctor just does a lot less evaluation and sends patients upstairs without much of a workup. Example: “The patient has fever and low sats, so I know he’s going to be admitted. Why should I keep him in the ED to do a workup?”

In fact, I think we should move away from using the ED as a triage unit and send some patients directly from ED triage to the inpatient unit. But we’ll need to put in place systems that make that safe and ensure good care. I don’t think any hospital has such systems in place now.

Let’s say that by 2013 most hospitals have dramatically improved their throughput, have short ED admit decision time to ED departure, and many patients are discharged and vacate their rooms early in the day. And let’s say we’ve been able to do that while maintaining or improving quality of care (we must!). We’ll then have happy patients and hospital administrators, and can bring up this improved performance when negotiating for hospital financial support for our practice. Everyone is happy, right?

Well, won’t this increase marginal or unnecessary admissions and readmissions, and lead to overall increased hospital utilization? After all, if it becomes really quick and easy to admit a patient to the hospital, won’t we do it more often? I think we will, but would never propose that we maintain poor throughput to keep a lid on costs and inappropriate utilization. But we’d better come up with other ways, or improved throughput will just be one more factor contributing to escalating healthcare costs.

Dr. Nelson has been a practicing hospitalist since 1988 and is co-founder and past president of SHM. He is a principal in Nelson Flores Hospital Medicine Consultants, a national hospitalist practice management consulting firm.

To understand one reason why your hospital cares so much about patient throughput and discharging patients before noon, think of tables in a restaurant. A restaurant has a limited number of tables, and the more quickly they serve customers, the sooner they’re able to seat a new party. So by improving their throughput, they can serve more customers and increase profitability without having to add tables.

Of course, the more a restaurant pushes to increase throughput, the more it risks a decrease in the satisfaction of its customers. Too much focus on throughput could annoy customers so much that it puts them out of business (Seinfeld’s Soup Nazi is one notable exception).

Yet hospitals are likely to increase their customers’ satisfaction by improving “front-end” throughput from the ED to the inpatient unit. In fact, CMS added two new core measures (known as inpatient quality reporting, or IQR) that hospitals began reporting on Jan. 1:

1. Median time from ED arrival to ED departure for admitted patients, and
2. Admit decision time to ED departure for admitted patients.

You already knew about these, right? Although they don’t directly influence Medicare payments to your hospital now, there is a pretty good chance they could become part of the Hospital Value-Based Purchasing program in the future. So expect administrative leaders at your hospital to continue pestering you about ED throughput with even greater intensity.

I confess that improving throughput feels like one of the most difficult things for me to do, and I sweat when in meetings about it. Yet I know intellectually that we can do better. After all, it wasn’t that long ago that a patient could expect to wait hours to see an ED doctor, and shortening the wait seemed an impossible task. But EDs everywhere have done just that, and now lots of them post the current ED wait time (typically less than 10 or 15 minutes!) on the Internet or billboards. So if they can do it, then I’m sure hospitalists can, too.

I wrote about hospital throughput in my April 2009 and May 2010 columns, and included some strategies you might want to try. Here are a few more directed at ED-to-inpatient ward throughput.

The One-Admitter Approach

Most practices have no option other than a single admitter at night, but if your one admitter during daytime hours reliably gets behind, then you should have “rounders” help with admitting duties. While this is stressful for the rounder, and could sometimes delay the rounder’s ability to discharge patients early (more on that later), in most cases, the benefit will be worth the cost. In fact, I think the best arrangement is for all, or nearly all, daytime hospitalists to share admissions every day.

Remember, this approach will eliminate the admitter-to-rounder handoff from Day One to Day Two, resulting in a net increase in efficiency (and probably patient satisfaction). Plus, reduction handoff errors should decrease, because only one doctor, rather than two, will have to get to know the new patient.

Eliminate Impediments

Some hospitalists with inefficient work habits have an opportunity to become more efficient at taking a history and reviewing records, along with other steps in the admission process, without risking poor quality. But most are reasonably efficient at those tasks already and shouldn’t make them the focus of throughput efforts.

That said, most, or nearly all, hospitalists could shorten the time from when the ED pages on a new admission to when we appear in the ED to see the patient.

Here is one scenario that gives rise to the type of delay I’m talking about. The ED doctor pages a triage hospitalist, and the two finally speak directly 10 minutes later. After a five-minute conversation, the triage doctor pages the hospitalist who will actually admit the patient, waits 10 minutes for the return call, relays the information (possibly leaving out or misrepresenting some of what the ED doc said), and the admitting hospitalist heads to the ED 15 minutes later. Each person in this scenario acted reasonably promptly, but the clock starts with the first ED page. The hospitalist is already at 45 minutes when they arrive to see the patient!

You need to minimize “daisy chain” communication between the ED doctor and the hospitalist who will actually see the patient. In the scenario above, I think it would be best to eliminate the triage doctor entirely (see my December 2008 column for ideas about how to do this) so that the hospitalist who will actually admit the patient learns of the new referral quickly and speaks directly with the ED doctor.

Another reason for a poor “page from ED to hospitalist at patient’s bedside” time is that the admitting hospitalist just doesn’t make it a priority to get to the ED quickly. They might decide to round on two or three more patients before working on the new admission. Of course, we must triage and sometimes delay getting to the ED while attending to an unstable floor patient, but not too often, in my experience.

I’m not suggesting that others adopt my habit: I typically don’t call the ED back at all. Instead, I just head to the ED immediately after being paged, and usually arrive in less time than I would have spent on hold waiting for the ED doc to come to the phone.

When presented with several ED patients to admit at the same time or tied up with a critical patient on the floor, getting to the ED quickly isn’t possible.

Write Admission or “Holding” Orders and Move the Patient to His/Her Room

This is frustrating for the admitting hospitalist, because among other problems, families often leave when the patient moves to the inpatient ward, and additional tests likely will take longer to complete from the floor rather than ED. And while it is hard to quantify, I think this practice increases the risk of errors—though some studies have shown that long ED stays are associated with worse outcomes for the patient, too.

One of the marquee principles of ED medicine has historically been “ED doctors should never write admission orders.” Even so, I sense that this view is shifting, and many now see this as clinically reasonable, and in some cases necessary, to ensure good performance. Our ED docs have agreed to do this if there is concern that the hospitalist can’t finish writing orders within an hour of first being paged about the patient. Ask me in a year and I’ll let you know just how this is going.

And, of course, another option is for the admitting hospitalist to provide admission orders or “holding” orders by phone. I think this is safe for many patients, as long as it is followed by a bedside admission visit by the hospitalist before too long.

Next month: What about throughput at the discharge end of the hospital stay? And yes, improving throughput risks quality of care, yet we have to do it while maintaining or improving quality.

Dr. Nelson has been a practicing hospitalist since 1988 and is co-founder and past president of SHM. He is a principal in Nelson Flores Hospital Medicine Consultants, a national hospitalist practice management consulting firm.

To understand one reason why your hospital cares so much about patient throughput and discharging patients before noon, think of tables in a restaurant. A restaurant has a limited number of tables, and the more quickly they serve customers, the sooner they’re able to seat a new party. So by improving their throughput, they can serve more customers and increase profitability without having to add tables.

Of course, the more a restaurant pushes to increase throughput, the more it risks a decrease in the satisfaction of its customers. Too much focus on throughput could annoy customers so much that it puts them out of business (Seinfeld’s Soup Nazi is one notable exception).

Yet hospitals are likely to increase their customers’ satisfaction by improving “front-end” throughput from the ED to the inpatient unit. In fact, CMS added two new core measures (known as inpatient quality reporting, or IQR) that hospitals began reporting on Jan. 1:

1. Median time from ED arrival to ED departure for admitted patients, and
2. Admit decision time to ED departure for admitted patients.

You already knew about these, right? Although they don’t directly influence Medicare payments to your hospital now, there is a pretty good chance they could become part of the Hospital Value-Based Purchasing program in the future. So expect administrative leaders at your hospital to continue pestering you about ED throughput with even greater intensity.

I confess that improving throughput feels like one of the most difficult things for me to do, and I sweat when in meetings about it. Yet I know intellectually that we can do better. After all, it wasn’t that long ago that a patient could expect to wait hours to see an ED doctor, and shortening the wait seemed an impossible task. But EDs everywhere have done just that, and now lots of them post the current ED wait time (typically less than 10 or 15 minutes!) on the Internet or billboards. So if they can do it, then I’m sure hospitalists can, too.

I wrote about hospital throughput in my April 2009 and May 2010 columns, and included some strategies you might want to try. Here are a few more directed at ED-to-inpatient ward throughput.

The One-Admitter Approach

Most practices have no option other than a single admitter at night, but if your one admitter during daytime hours reliably gets behind, then you should have “rounders” help with admitting duties. While this is stressful for the rounder, and could sometimes delay the rounder’s ability to discharge patients early (more on that later), in most cases, the benefit will be worth the cost. In fact, I think the best arrangement is for all, or nearly all, daytime hospitalists to share admissions every day.

Remember, this approach will eliminate the admitter-to-rounder handoff from Day One to Day Two, resulting in a net increase in efficiency (and probably patient satisfaction). Plus, reduction handoff errors should decrease, because only one doctor, rather than two, will have to get to know the new patient.

Eliminate Impediments

Some hospitalists with inefficient work habits have an opportunity to become more efficient at taking a history and reviewing records, along with other steps in the admission process, without risking poor quality. But most are reasonably efficient at those tasks already and shouldn’t make them the focus of throughput efforts.

That said, most, or nearly all, hospitalists could shorten the time from when the ED pages on a new admission to when we appear in the ED to see the patient.

Here is one scenario that gives rise to the type of delay I’m talking about. The ED doctor pages a triage hospitalist, and the two finally speak directly 10 minutes later. After a five-minute conversation, the triage doctor pages the hospitalist who will actually admit the patient, waits 10 minutes for the return call, relays the information (possibly leaving out or misrepresenting some of what the ED doc said), and the admitting hospitalist heads to the ED 15 minutes later. Each person in this scenario acted reasonably promptly, but the clock starts with the first ED page. The hospitalist is already at 45 minutes when they arrive to see the patient!

You need to minimize “daisy chain” communication between the ED doctor and the hospitalist who will actually see the patient. In the scenario above, I think it would be best to eliminate the triage doctor entirely (see my December 2008 column for ideas about how to do this) so that the hospitalist who will actually admit the patient learns of the new referral quickly and speaks directly with the ED doctor.

Another reason for a poor “page from ED to hospitalist at patient’s bedside” time is that the admitting hospitalist just doesn’t make it a priority to get to the ED quickly. They might decide to round on two or three more patients before working on the new admission. Of course, we must triage and sometimes delay getting to the ED while attending to an unstable floor patient, but not too often, in my experience.

I’m not suggesting that others adopt my habit: I typically don’t call the ED back at all. Instead, I just head to the ED immediately after being paged, and usually arrive in less time than I would have spent on hold waiting for the ED doc to come to the phone.

When presented with several ED patients to admit at the same time or tied up with a critical patient on the floor, getting to the ED quickly isn’t possible.

Write Admission or “Holding” Orders and Move the Patient to His/Her Room

This is frustrating for the admitting hospitalist, because among other problems, families often leave when the patient moves to the inpatient ward, and additional tests likely will take longer to complete from the floor rather than ED. And while it is hard to quantify, I think this practice increases the risk of errors—though some studies have shown that long ED stays are associated with worse outcomes for the patient, too.

One of the marquee principles of ED medicine has historically been “ED doctors should never write admission orders.” Even so, I sense that this view is shifting, and many now see this as clinically reasonable, and in some cases necessary, to ensure good performance. Our ED docs have agreed to do this if there is concern that the hospitalist can’t finish writing orders within an hour of first being paged about the patient. Ask me in a year and I’ll let you know just how this is going.

And, of course, another option is for the admitting hospitalist to provide admission orders or “holding” orders by phone. I think this is safe for many patients, as long as it is followed by a bedside admission visit by the hospitalist before too long.

Next month: What about throughput at the discharge end of the hospital stay? And yes, improving throughput risks quality of care, yet we have to do it while maintaining or improving quality.

Dr. Nelson has been a practicing hospitalist since 1988 and is co-founder and past president of SHM. He is a principal in Nelson Flores Hospital Medicine Consultants, a national hospitalist practice management consulting firm.

To understand one reason why your hospital cares so much about patient throughput and discharging patients before noon, think of tables in a restaurant. A restaurant has a limited number of tables, and the more quickly they serve customers, the sooner they’re able to seat a new party. So by improving their throughput, they can serve more customers and increase profitability without having to add tables.

Of course, the more a restaurant pushes to increase throughput, the more it risks a decrease in the satisfaction of its customers. Too much focus on throughput could annoy customers so much that it puts them out of business (Seinfeld’s Soup Nazi is one notable exception).

Yet hospitals are likely to increase their customers’ satisfaction by improving “front-end” throughput from the ED to the inpatient unit. In fact, CMS added two new core measures (known as inpatient quality reporting, or IQR) that hospitals began reporting on Jan. 1:

1. Median time from ED arrival to ED departure for admitted patients, and
2. Admit decision time to ED departure for admitted patients.

You already knew about these, right? Although they don’t directly influence Medicare payments to your hospital now, there is a pretty good chance they could become part of the Hospital Value-Based Purchasing program in the future. So expect administrative leaders at your hospital to continue pestering you about ED throughput with even greater intensity.

I confess that improving throughput feels like one of the most difficult things for me to do, and I sweat when in meetings about it. Yet I know intellectually that we can do better. After all, it wasn’t that long ago that a patient could expect to wait hours to see an ED doctor, and shortening the wait seemed an impossible task. But EDs everywhere have done just that, and now lots of them post the current ED wait time (typically less than 10 or 15 minutes!) on the Internet or billboards. So if they can do it, then I’m sure hospitalists can, too.

I wrote about hospital throughput in my April 2009 and May 2010 columns, and included some strategies you might want to try. Here are a few more directed at ED-to-inpatient ward throughput.

The One-Admitter Approach

Most practices have no option other than a single admitter at night, but if your one admitter during daytime hours reliably gets behind, then you should have “rounders” help with admitting duties. While this is stressful for the rounder, and could sometimes delay the rounder’s ability to discharge patients early (more on that later), in most cases, the benefit will be worth the cost. In fact, I think the best arrangement is for all, or nearly all, daytime hospitalists to share admissions every day.

Remember, this approach will eliminate the admitter-to-rounder handoff from Day One to Day Two, resulting in a net increase in efficiency (and probably patient satisfaction). Plus, reduction handoff errors should decrease, because only one doctor, rather than two, will have to get to know the new patient.

Eliminate Impediments

Some hospitalists with inefficient work habits have an opportunity to become more efficient at taking a history and reviewing records, along with other steps in the admission process, without risking poor quality. But most are reasonably efficient at those tasks already and shouldn’t make them the focus of throughput efforts.

That said, most, or nearly all, hospitalists could shorten the time from when the ED pages on a new admission to when we appear in the ED to see the patient.

Here is one scenario that gives rise to the type of delay I’m talking about. The ED doctor pages a triage hospitalist, and the two finally speak directly 10 minutes later. After a five-minute conversation, the triage doctor pages the hospitalist who will actually admit the patient, waits 10 minutes for the return call, relays the information (possibly leaving out or misrepresenting some of what the ED doc said), and the admitting hospitalist heads to the ED 15 minutes later. Each person in this scenario acted reasonably promptly, but the clock starts with the first ED page. The hospitalist is already at 45 minutes when they arrive to see the patient!

You need to minimize “daisy chain” communication between the ED doctor and the hospitalist who will actually see the patient. In the scenario above, I think it would be best to eliminate the triage doctor entirely (see my December 2008 column for ideas about how to do this) so that the hospitalist who will actually admit the patient learns of the new referral quickly and speaks directly with the ED doctor.

Another reason for a poor “page from ED to hospitalist at patient’s bedside” time is that the admitting hospitalist just doesn’t make it a priority to get to the ED quickly. They might decide to round on two or three more patients before working on the new admission. Of course, we must triage and sometimes delay getting to the ED while attending to an unstable floor patient, but not too often, in my experience.

I’m not suggesting that others adopt my habit: I typically don’t call the ED back at all. Instead, I just head to the ED immediately after being paged, and usually arrive in less time than I would have spent on hold waiting for the ED doc to come to the phone.

When presented with several ED patients to admit at the same time or tied up with a critical patient on the floor, getting to the ED quickly isn’t possible.

Write Admission or “Holding” Orders and Move the Patient to His/Her Room

This is frustrating for the admitting hospitalist, because among other problems, families often leave when the patient moves to the inpatient ward, and additional tests likely will take longer to complete from the floor rather than ED. And while it is hard to quantify, I think this practice increases the risk of errors—though some studies have shown that long ED stays are associated with worse outcomes for the patient, too.

One of the marquee principles of ED medicine has historically been “ED doctors should never write admission orders.” Even so, I sense that this view is shifting, and many now see this as clinically reasonable, and in some cases necessary, to ensure good performance. Our ED docs have agreed to do this if there is concern that the hospitalist can’t finish writing orders within an hour of first being paged about the patient. Ask me in a year and I’ll let you know just how this is going.

And, of course, another option is for the admitting hospitalist to provide admission orders or “holding” orders by phone. I think this is safe for many patients, as long as it is followed by a bedside admission visit by the hospitalist before too long.

Next month: What about throughput at the discharge end of the hospital stay? And yes, improving throughput risks quality of care, yet we have to do it while maintaining or improving quality.

Dr. Nelson has been a practicing hospitalist since 1988 and is co-founder and past president of SHM. He is a principal in Nelson Flores Hospital Medicine Consultants, a national hospitalist practice management consulting firm.

Like all healthcare payors, Medicare has for some time tried to change from being a passive payor of services to a purchaser of value. There might be a lot of ways to do that, but one easy to conceptualize method is for Medicare to pay different amounts for a given service (i.e. a hospital stay for congestive heart failure) based on the quality of that service. Of course, the details of how to measure quality and implement such a program become terribly complex in a hurry.

Hospital value-based purchasing (HVBP), one of the provisions health reform, is one of the Centers for Medicare & Medicaid Services’ (CMS) first large-scale attempts to do just that.

CMS’ goals for this program include improving clinical quality, encouraging more patient-centered care, encouraging hospitals and clinicians to work together to improve quality of care, and empowering consumers to make value-based decisions about their healthcare (see “Value-Based Purchasing Raises the Stakes,” May 2011).

You already were aware that baseline measurements of quality performance for your hospital were collected from July 2009 through March 2010, right? And data collected from July 2010 through March 2011 serves as the first “Performance Period” to determine payment that will begin in October 2012. (If you are not aware, visit www.hospitalcompare.hhs.gov to see the performance your hospital is currently reporting. All the providers in your hospitalist group should be familiar with the data; another good site is www.whynotthebest.org. But keep in mind there is a significant delay in getting the data to display on these sites. In many cases, the data they display today is from nearly a year prior.)

Some Generalizations

HVBP has a number of features that are typical of new reimbursement programs:

• It is budget-neutral for Medicare. In other words, some hospitals will perform well and realize reimbursement increases; some hospitals will not perform well and will see reduced reimbursement.
• It builds on previous programs. HVBP essentially moves performance on core measures and HCAHPS surveys, all of which have been in place several years, from being publically reported to serving as metrics that influence reimbursement.
• The dollar amounts involved grow each year.
• Expect the program to evolve continuously. For example, the number and type of quality metrics on which the program is based will increase each year.

How It Works

Medicare will start withholding a portion of diagnosis-related group (DRG) payments to hospitals, starting with 1% initially and increasing by 0.25% annually, so that 2% is withheld in 2017. Keep in mind that amount is withheld from all DRG payments to a hospital, not just those related to the diagnoses that are part of the HVBP program.

Based on performance on core measures and patient satisfaction, hospitals have a chance to earn additional compensation that could be more or less than the initial 2% withholding. Additional performance measures will be added every year or so.

There are two ways a hospital can earn some of this performance-based compensation based on its “Total Performance Score.” Expressed in the language of Little League baseball, a hospital needs to be either a most valuable player—an MVP—or a most improved player.

The MVP pathway, known as “achievement,” is to grade hospitals on a curve established from the data collected for all hospitals the prior year. Those at the high end of the curve are paid more than the amount that was withheld from them (so they are “net winners”); those at the bottom of the curve are paid nothing (“net losers,” as they lost the chance to earn back any of the amount withheld).

The most improved pathway, cleverly called “improvement,” is for a hospital to improve its performance over its previous baseline, even if it fails to attain a high score relative to others. Measurement of the first baseline year ran from July 2010 through March 2011, and will be used as the reference point for performance from July 2011 through March 2012.

The precise amount of the payment for either of the two methods above is based on a sliding scale rather than an all-or-none threshold. SHM’s website (www.hospitalmedicine.org/hvbp) has an example of this calculation. A simple way to think of it is that a hospital won’t have to do a lot to earn back some portion of the amount withheld, but it has to hit a home run to earn back more than that.

The Dollars at Risk

It is worth thinking about the most a hospital could lose or gain under HVBP. Let’s take an example of a hospital that is paid $50 million annually by Medicare across all DRGs (this would be a pretty small hospital). In 2013, Medicare will pay that hospital only $49.5 million; that is, it will withhold 1% ($500,000) as part of the HVBP program. After the hospital’s Total Performance Score is computed, Medicare might pay more to the hospital in the form of an “add on” to the hospital’s typical DRG payments. If performance stinks or is worse than most hospitals and does not improve significantly over its own baseline, Medicare might not pay a nickel more. But for respectable performance, it might be paid 80% of the amount withheld—$400,000, in this example. So this hypothetical hospital would end up being a “net loser” of $100,000. By 2017, when 2% is withheld, the dollars at risk would be double.

From a practical perspective, the amount by which reimbursement will go up or down for most hospitals will be significantly less than the total withhold amount for most hospitals, so it probably won’t be enough to result in financial disaster or great profits. (Your hospital CFO may dispute this conclusion and you should listen to them.) But because a new “grading curve” is established each year, a score that puts a hospital in a financially attractive category one year might not look so good the next year. Therefore, a hospital whose performance stands still will likely become a net loser within a year or two.

Even if you were to conclude that the potential financial upside isn’t compelling enough to devote a lot of energy to perform well, the fact that most of the measures really do matter to our patients, and that this information is publicly reported, means every hospital should do whatever it takes to perform well. I suspect that patients and employers, as well as all types of payors, will pay more and more attention to your hospital’s performance and overall hospital volume affected in locales where patients have a choice of more than one hospital.

Learn More

I’ve provided only a very general HVBP overview here. Most hospitalist groups should identify at least one person who develops meaningful expertise in this program and other components of healthcare reform (i.e. bundled payments, penalties for excess readmissions, and penalties for hospital-acquired conditions). SHM is a terrific educational resource for these things and has a very informative HVBP toolkit available via its website.

Thanks to Drs. Win Whitcomb and Pat Torcson for helping to explain all this stuff to me. They and others at SHM do a great job of staying on top of things like healthcare reform.

Dr. Nelson has been a practicing hospitalist since 1988 and is co-founder and past president of SHM. He is a principal in Nelson Flores Hospital Medicine Consultants, a national hospitalist practice management consulting firm (www.nelsonflores.com). He is course co-director and faculty for SHM’s “Best Practices in Managing a Hospital Medicine Program” course. This column represents his views and is not intended to reflect an official position of SHM.

Like all healthcare payors, Medicare has for some time tried to change from being a passive payor of services to a purchaser of value. There might be a lot of ways to do that, but one easy to conceptualize method is for Medicare to pay different amounts for a given service (i.e. a hospital stay for congestive heart failure) based on the quality of that service. Of course, the details of how to measure quality and implement such a program become terribly complex in a hurry.

Hospital value-based purchasing (HVBP), one of the provisions health reform, is one of the Centers for Medicare & Medicaid Services’ (CMS) first large-scale attempts to do just that.

CMS’ goals for this program include improving clinical quality, encouraging more patient-centered care, encouraging hospitals and clinicians to work together to improve quality of care, and empowering consumers to make value-based decisions about their healthcare (see “Value-Based Purchasing Raises the Stakes,” May 2011).

You already were aware that baseline measurements of quality performance for your hospital were collected from July 2009 through March 2010, right? And data collected from July 2010 through March 2011 serves as the first “Performance Period” to determine payment that will begin in October 2012. (If you are not aware, visit www.hospitalcompare.hhs.gov to see the performance your hospital is currently reporting. All the providers in your hospitalist group should be familiar with the data; another good site is www.whynotthebest.org. But keep in mind there is a significant delay in getting the data to display on these sites. In many cases, the data they display today is from nearly a year prior.)

Some Generalizations

HVBP has a number of features that are typical of new reimbursement programs:

• It is budget-neutral for Medicare. In other words, some hospitals will perform well and realize reimbursement increases; some hospitals will not perform well and will see reduced reimbursement.
• It builds on previous programs. HVBP essentially moves performance on core measures and HCAHPS surveys, all of which have been in place several years, from being publically reported to serving as metrics that influence reimbursement.
• The dollar amounts involved grow each year.
• Expect the program to evolve continuously. For example, the number and type of quality metrics on which the program is based will increase each year.

How It Works

Medicare will start withholding a portion of diagnosis-related group (DRG) payments to hospitals, starting with 1% initially and increasing by 0.25% annually, so that 2% is withheld in 2017. Keep in mind that amount is withheld from all DRG payments to a hospital, not just those related to the diagnoses that are part of the HVBP program.

Based on performance on core measures and patient satisfaction, hospitals have a chance to earn additional compensation that could be more or less than the initial 2% withholding. Additional performance measures will be added every year or so.

There are two ways a hospital can earn some of this performance-based compensation based on its “Total Performance Score.” Expressed in the language of Little League baseball, a hospital needs to be either a most valuable player—an MVP—or a most improved player.

The MVP pathway, known as “achievement,” is to grade hospitals on a curve established from the data collected for all hospitals the prior year. Those at the high end of the curve are paid more than the amount that was withheld from them (so they are “net winners”); those at the bottom of the curve are paid nothing (“net losers,” as they lost the chance to earn back any of the amount withheld).

The most improved pathway, cleverly called “improvement,” is for a hospital to improve its performance over its previous baseline, even if it fails to attain a high score relative to others. Measurement of the first baseline year ran from July 2010 through March 2011, and will be used as the reference point for performance from July 2011 through March 2012.

The precise amount of the payment for either of the two methods above is based on a sliding scale rather than an all-or-none threshold. SHM’s website (www.hospitalmedicine.org/hvbp) has an example of this calculation. A simple way to think of it is that a hospital won’t have to do a lot to earn back some portion of the amount withheld, but it has to hit a home run to earn back more than that.

The Dollars at Risk

It is worth thinking about the most a hospital could lose or gain under HVBP. Let’s take an example of a hospital that is paid $50 million annually by Medicare across all DRGs (this would be a pretty small hospital). In 2013, Medicare will pay that hospital only $49.5 million; that is, it will withhold 1% ($500,000) as part of the HVBP program. After the hospital’s Total Performance Score is computed, Medicare might pay more to the hospital in the form of an “add on” to the hospital’s typical DRG payments. If performance stinks or is worse than most hospitals and does not improve significantly over its own baseline, Medicare might not pay a nickel more. But for respectable performance, it might be paid 80% of the amount withheld—$400,000, in this example. So this hypothetical hospital would end up being a “net loser” of $100,000. By 2017, when 2% is withheld, the dollars at risk would be double.

From a practical perspective, the amount by which reimbursement will go up or down for most hospitals will be significantly less than the total withhold amount for most hospitals, so it probably won’t be enough to result in financial disaster or great profits. (Your hospital CFO may dispute this conclusion and you should listen to them.) But because a new “grading curve” is established each year, a score that puts a hospital in a financially attractive category one year might not look so good the next year. Therefore, a hospital whose performance stands still will likely become a net loser within a year or two.

Even if you were to conclude that the potential financial upside isn’t compelling enough to devote a lot of energy to perform well, the fact that most of the measures really do matter to our patients, and that this information is publicly reported, means every hospital should do whatever it takes to perform well. I suspect that patients and employers, as well as all types of payors, will pay more and more attention to your hospital’s performance and overall hospital volume affected in locales where patients have a choice of more than one hospital.

Learn More

I’ve provided only a very general HVBP overview here. Most hospitalist groups should identify at least one person who develops meaningful expertise in this program and other components of healthcare reform (i.e. bundled payments, penalties for excess readmissions, and penalties for hospital-acquired conditions). SHM is a terrific educational resource for these things and has a very informative HVBP toolkit available via its website.

Thanks to Drs. Win Whitcomb and Pat Torcson for helping to explain all this stuff to me. They and others at SHM do a great job of staying on top of things like healthcare reform.

Dr. Nelson has been a practicing hospitalist since 1988 and is co-founder and past president of SHM. He is a principal in Nelson Flores Hospital Medicine Consultants, a national hospitalist practice management consulting firm (www.nelsonflores.com). He is course co-director and faculty for SHM’s “Best Practices in Managing a Hospital Medicine Program” course. This column represents his views and is not intended to reflect an official position of SHM.

Like all healthcare payors, Medicare has for some time tried to change from being a passive payor of services to a purchaser of value. There might be a lot of ways to do that, but one easy to conceptualize method is for Medicare to pay different amounts for a given service (i.e. a hospital stay for congestive heart failure) based on the quality of that service. Of course, the details of how to measure quality and implement such a program become terribly complex in a hurry.

Hospital value-based purchasing (HVBP), one of the provisions health reform, is one of the Centers for Medicare & Medicaid Services’ (CMS) first large-scale attempts to do just that.

CMS’ goals for this program include improving clinical quality, encouraging more patient-centered care, encouraging hospitals and clinicians to work together to improve quality of care, and empowering consumers to make value-based decisions about their healthcare (see “Value-Based Purchasing Raises the Stakes,” May 2011).

You already were aware that baseline measurements of quality performance for your hospital were collected from July 2009 through March 2010, right? And data collected from July 2010 through March 2011 serves as the first “Performance Period” to determine payment that will begin in October 2012. (If you are not aware, visit www.hospitalcompare.hhs.gov to see the performance your hospital is currently reporting. All the providers in your hospitalist group should be familiar with the data; another good site is www.whynotthebest.org. But keep in mind there is a significant delay in getting the data to display on these sites. In many cases, the data they display today is from nearly a year prior.)

Some Generalizations

HVBP has a number of features that are typical of new reimbursement programs:

• It is budget-neutral for Medicare. In other words, some hospitals will perform well and realize reimbursement increases; some hospitals will not perform well and will see reduced reimbursement.
• It builds on previous programs. HVBP essentially moves performance on core measures and HCAHPS surveys, all of which have been in place several years, from being publically reported to serving as metrics that influence reimbursement.
• The dollar amounts involved grow each year.
• Expect the program to evolve continuously. For example, the number and type of quality metrics on which the program is based will increase each year.

How It Works

Medicare will start withholding a portion of diagnosis-related group (DRG) payments to hospitals, starting with 1% initially and increasing by 0.25% annually, so that 2% is withheld in 2017. Keep in mind that amount is withheld from all DRG payments to a hospital, not just those related to the diagnoses that are part of the HVBP program.

Based on performance on core measures and patient satisfaction, hospitals have a chance to earn additional compensation that could be more or less than the initial 2% withholding. Additional performance measures will be added every year or so.

There are two ways a hospital can earn some of this performance-based compensation based on its “Total Performance Score.” Expressed in the language of Little League baseball, a hospital needs to be either a most valuable player—an MVP—or a most improved player.

The MVP pathway, known as “achievement,” is to grade hospitals on a curve established from the data collected for all hospitals the prior year. Those at the high end of the curve are paid more than the amount that was withheld from them (so they are “net winners”); those at the bottom of the curve are paid nothing (“net losers,” as they lost the chance to earn back any of the amount withheld).

The most improved pathway, cleverly called “improvement,” is for a hospital to improve its performance over its previous baseline, even if it fails to attain a high score relative to others. Measurement of the first baseline year ran from July 2010 through March 2011, and will be used as the reference point for performance from July 2011 through March 2012.

The precise amount of the payment for either of the two methods above is based on a sliding scale rather than an all-or-none threshold. SHM’s website (www.hospitalmedicine.org/hvbp) has an example of this calculation. A simple way to think of it is that a hospital won’t have to do a lot to earn back some portion of the amount withheld, but it has to hit a home run to earn back more than that.

The Dollars at Risk

It is worth thinking about the most a hospital could lose or gain under HVBP. Let’s take an example of a hospital that is paid $50 million annually by Medicare across all DRGs (this would be a pretty small hospital). In 2013, Medicare will pay that hospital only $49.5 million; that is, it will withhold 1% ($500,000) as part of the HVBP program. After the hospital’s Total Performance Score is computed, Medicare might pay more to the hospital in the form of an “add on” to the hospital’s typical DRG payments. If performance stinks or is worse than most hospitals and does not improve significantly over its own baseline, Medicare might not pay a nickel more. But for respectable performance, it might be paid 80% of the amount withheld—$400,000, in this example. So this hypothetical hospital would end up being a “net loser” of $100,000. By 2017, when 2% is withheld, the dollars at risk would be double.

From a practical perspective, the amount by which reimbursement will go up or down for most hospitals will be significantly less than the total withhold amount for most hospitals, so it probably won’t be enough to result in financial disaster or great profits. (Your hospital CFO may dispute this conclusion and you should listen to them.) But because a new “grading curve” is established each year, a score that puts a hospital in a financially attractive category one year might not look so good the next year. Therefore, a hospital whose performance stands still will likely become a net loser within a year or two.

Even if you were to conclude that the potential financial upside isn’t compelling enough to devote a lot of energy to perform well, the fact that most of the measures really do matter to our patients, and that this information is publicly reported, means every hospital should do whatever it takes to perform well. I suspect that patients and employers, as well as all types of payors, will pay more and more attention to your hospital’s performance and overall hospital volume affected in locales where patients have a choice of more than one hospital.

Learn More

I’ve provided only a very general HVBP overview here. Most hospitalist groups should identify at least one person who develops meaningful expertise in this program and other components of healthcare reform (i.e. bundled payments, penalties for excess readmissions, and penalties for hospital-acquired conditions). SHM is a terrific educational resource for these things and has a very informative HVBP toolkit available via its website.

Thanks to Drs. Win Whitcomb and Pat Torcson for helping to explain all this stuff to me. They and others at SHM do a great job of staying on top of things like healthcare reform.

Dr. Nelson has been a practicing hospitalist since 1988 and is co-founder and past president of SHM. He is a principal in Nelson Flores Hospital Medicine Consultants, a national hospitalist practice management consulting firm (www.nelsonflores.com). He is course co-director and faculty for SHM’s “Best Practices in Managing a Hospital Medicine Program” course. This column represents his views and is not intended to reflect an official position of SHM.

Doctors shouldn’t have to worry about financial issues. The welfare of our patients should be our only concern.

We should be able to devote our full attention to studying how best to serve the needs of the people we care for. We shouldn’t need to spend time learning about healthcare reform or things like ICD-9 (or ICD-10!)—things that don’t help us provide better care to patients.

But these are pie-in-the-sky dreams. As far as I can tell, all healthcare systems require caregivers to attend to economics and data management that aren’t directly tied to clinical care. Our system depends on all caregivers devoting some time to learn how the system is organized, and keeping up with how it evolves. And the crisis in runaway costs in U.S. healthcare only increases the need for all who work in healthcare to devote significant time (too much) to the operational (nonclinical side) of healthcare.

Hospitalist practice is a much simpler business to manage and operate than most forms of clinical practice. There usually is no building to rent, few nonclinical employees to manage, and a comparatively simple financial model. And if employed by a hospital or other large entity, nonclinicians handle most of the “business management.” So when it comes to the number of brain cells diverted to business rather than clinical concerns, hospitalists start with an advantage over most other specialties.

Still, we have a lot of nonclinical stuff to keep up with. Consider the concept of “managing to Medicare reimbursement.” This means managing a practice or hospital in a way that minimizes the failure to capture all appropriate Medicare reimbursement dollars. Even if you’ve never heard of this concept before, there are probably a lot of people at your hospital who have this as their main responsibility, and clinicians should know something about it.

So in an effort to distract the fewest brain cells away from clinical matters, here is a very simple overview of some components of managing to Medicare reimbursement relevant to hospitalists. This isn’t a comprehensive list, only some hospitalist-relevant highlights.

Medicare Reimbursement Today

Accurate determination of inpatient vs. observation status. Wow, this can get complicated. Most hospitals have people who devote significant time to doing this for patients every day, and even those experts sometimes disagree on the appropriate status. But all hospitalists should have a basic understanding of how this works and a willingness to answer questions from the hospital’s experts, and, when appropriate, write additional information in the chart to clarify the appropriate status.

Optimal resource utilization, including length of stay. Because Medicare pays an essentially fixed amount based on the diagnoses for each inpatient admission, managing costs is critical to a hospital’s financial well-being. Hospitalists have a huge role in this. And regardless of how Medicare reimburses for services, there is clinical rationale for being careful about resources used and how long someone stays in a hospital. In many cases, more is not better—and it even could be worse—for the patient.

Optimal clinical documentation and accurate DRG assignment. Good documentation is important for clinical care, but beyond that, the precise way things are documented can have significant influence on Medicare reimbursement. Low potassium might in some cases lead to higher reimbursement, but a doctor must write “hypokalemia”; simply writing K+ means the hospital can’t include hypokalemia as a diagnosis. (A doctor, nurse practitioner, or physician assistant must write out “hypokalemia” only once for Medicare purposes; it would then be fine to use K+ in the chart every other time.)

Say you have a patient with a UTI and sepsis. Write only “urosepsis,” and the hospital must bill for cystitis—low reimbursement. Write “urinary tract infection with sepsis,” and the hospital can bill for higher reimbursement.

There should be people at your hospital who are experts at this, and all hospitalists should work with them to learn appropriate documentation language to describe illnesses correctly for billing purposes. Many hospitals use a system of “DRG queries,” which hospitalists should always respond to (though they should agree with the issue raised, such as “was the pneumonia likely due to aspiration?” only when clinically appropriate).

Change Is Coming

Don’t make the mistake of thinking Medicare reimbursement is a static phenomenon. It is undergoing rapid and significant evolution. For example, the Affordable Care Act, aka healthcare reform legislation, provides for a number of changes hospitalists need to understand.

I suggest that you make sure to understand your hospital’s or medical group’s position on accountable-care organizations (ACOs). It is a pretty complicated program that, in the first few years, has modest impact on reimbursement. If the ACO performs well, the additional reimbursement to an organization might pay for little more than the staff salaries of the staff that managed the considerable complexity of enrolling in and reporting for the program. And there is a risk the organization could lose money if it doesn’t perform well. So many organizations have decided not to pursue participation as an ACO, but they may decide to put in place most of the elements of an ACO without enrolling in the program. Some refer to this as an “aco” rather than an “ACO.”

Value-based purchasing (VBP) is set to influence hospital reimbursement rates starting in 2013 based on a hospital’s performance in 2012. SHM has a terrific VBP toolkit available online.

Bundled payments and financial penalties for readmissions also take effect in 2013. Now is the time ensure that you understand the implications of these programs; they are designed so that the financial impact to most organizations will be modest.

Reimbursement penalties for a specified list of hospital-acquired conditions (HACs) will begin in 2015. Conditions most relevant for hospitalists include vascular catheter-related bloodstream infections, catheter-related urinary infection, or manifestations of poor glycemic control (HONK, DKA, hypo-/hyperglycemia).

I plan to address some of these programs in greater detail in future practice management columns.

Dr. Nelson has been a practicing hospitalist since 1988 and is co-founder and past president of SHM. He is a principal in Nelson Flores Hospital Medicine Consultants, a national hospitalist practice management consulting firm (www.nelsonflores.com). He is also course co-director and faculty for SHM’s “Best Practices in Managing a Hospital Medicine Program” course. This column represents his views and is not intended to reflect an official position of SHM.

Doctors shouldn’t have to worry about financial issues. The welfare of our patients should be our only concern.

We should be able to devote our full attention to studying how best to serve the needs of the people we care for. We shouldn’t need to spend time learning about healthcare reform or things like ICD-9 (or ICD-10!)—things that don’t help us provide better care to patients.

But these are pie-in-the-sky dreams. As far as I can tell, all healthcare systems require caregivers to attend to economics and data management that aren’t directly tied to clinical care. Our system depends on all caregivers devoting some time to learn how the system is organized, and keeping up with how it evolves. And the crisis in runaway costs in U.S. healthcare only increases the need for all who work in healthcare to devote significant time (too much) to the operational (nonclinical side) of healthcare.

Hospitalist practice is a much simpler business to manage and operate than most forms of clinical practice. There usually is no building to rent, few nonclinical employees to manage, and a comparatively simple financial model. And if employed by a hospital or other large entity, nonclinicians handle most of the “business management.” So when it comes to the number of brain cells diverted to business rather than clinical concerns, hospitalists start with an advantage over most other specialties.

Still, we have a lot of nonclinical stuff to keep up with. Consider the concept of “managing to Medicare reimbursement.” This means managing a practice or hospital in a way that minimizes the failure to capture all appropriate Medicare reimbursement dollars. Even if you’ve never heard of this concept before, there are probably a lot of people at your hospital who have this as their main responsibility, and clinicians should know something about it.

So in an effort to distract the fewest brain cells away from clinical matters, here is a very simple overview of some components of managing to Medicare reimbursement relevant to hospitalists. This isn’t a comprehensive list, only some hospitalist-relevant highlights.

Medicare Reimbursement Today

Accurate determination of inpatient vs. observation status. Wow, this can get complicated. Most hospitals have people who devote significant time to doing this for patients every day, and even those experts sometimes disagree on the appropriate status. But all hospitalists should have a basic understanding of how this works and a willingness to answer questions from the hospital’s experts, and, when appropriate, write additional information in the chart to clarify the appropriate status.

Optimal resource utilization, including length of stay. Because Medicare pays an essentially fixed amount based on the diagnoses for each inpatient admission, managing costs is critical to a hospital’s financial well-being. Hospitalists have a huge role in this. And regardless of how Medicare reimburses for services, there is clinical rationale for being careful about resources used and how long someone stays in a hospital. In many cases, more is not better—and it even could be worse—for the patient.

Optimal clinical documentation and accurate DRG assignment. Good documentation is important for clinical care, but beyond that, the precise way things are documented can have significant influence on Medicare reimbursement. Low potassium might in some cases lead to higher reimbursement, but a doctor must write “hypokalemia”; simply writing K+ means the hospital can’t include hypokalemia as a diagnosis. (A doctor, nurse practitioner, or physician assistant must write out “hypokalemia” only once for Medicare purposes; it would then be fine to use K+ in the chart every other time.)

Say you have a patient with a UTI and sepsis. Write only “urosepsis,” and the hospital must bill for cystitis—low reimbursement. Write “urinary tract infection with sepsis,” and the hospital can bill for higher reimbursement.

There should be people at your hospital who are experts at this, and all hospitalists should work with them to learn appropriate documentation language to describe illnesses correctly for billing purposes. Many hospitals use a system of “DRG queries,” which hospitalists should always respond to (though they should agree with the issue raised, such as “was the pneumonia likely due to aspiration?” only when clinically appropriate).

Change Is Coming

Don’t make the mistake of thinking Medicare reimbursement is a static phenomenon. It is undergoing rapid and significant evolution. For example, the Affordable Care Act, aka healthcare reform legislation, provides for a number of changes hospitalists need to understand.

I suggest that you make sure to understand your hospital’s or medical group’s position on accountable-care organizations (ACOs). It is a pretty complicated program that, in the first few years, has modest impact on reimbursement. If the ACO performs well, the additional reimbursement to an organization might pay for little more than the staff salaries of the staff that managed the considerable complexity of enrolling in and reporting for the program. And there is a risk the organization could lose money if it doesn’t perform well. So many organizations have decided not to pursue participation as an ACO, but they may decide to put in place most of the elements of an ACO without enrolling in the program. Some refer to this as an “aco” rather than an “ACO.”

Value-based purchasing (VBP) is set to influence hospital reimbursement rates starting in 2013 based on a hospital’s performance in 2012. SHM has a terrific VBP toolkit available online.

Bundled payments and financial penalties for readmissions also take effect in 2013. Now is the time ensure that you understand the implications of these programs; they are designed so that the financial impact to most organizations will be modest.

Reimbursement penalties for a specified list of hospital-acquired conditions (HACs) will begin in 2015. Conditions most relevant for hospitalists include vascular catheter-related bloodstream infections, catheter-related urinary infection, or manifestations of poor glycemic control (HONK, DKA, hypo-/hyperglycemia).

I plan to address some of these programs in greater detail in future practice management columns.

Dr. Nelson has been a practicing hospitalist since 1988 and is co-founder and past president of SHM. He is a principal in Nelson Flores Hospital Medicine Consultants, a national hospitalist practice management consulting firm (www.nelsonflores.com). He is also course co-director and faculty for SHM’s “Best Practices in Managing a Hospital Medicine Program” course. This column represents his views and is not intended to reflect an official position of SHM.

Doctors shouldn’t have to worry about financial issues. The welfare of our patients should be our only concern.

We should be able to devote our full attention to studying how best to serve the needs of the people we care for. We shouldn’t need to spend time learning about healthcare reform or things like ICD-9 (or ICD-10!)—things that don’t help us provide better care to patients.

But these are pie-in-the-sky dreams. As far as I can tell, all healthcare systems require caregivers to attend to economics and data management that aren’t directly tied to clinical care. Our system depends on all caregivers devoting some time to learn how the system is organized, and keeping up with how it evolves. And the crisis in runaway costs in U.S. healthcare only increases the need for all who work in healthcare to devote significant time (too much) to the operational (nonclinical side) of healthcare.

Hospitalist practice is a much simpler business to manage and operate than most forms of clinical practice. There usually is no building to rent, few nonclinical employees to manage, and a comparatively simple financial model. And if employed by a hospital or other large entity, nonclinicians handle most of the “business management.” So when it comes to the number of brain cells diverted to business rather than clinical concerns, hospitalists start with an advantage over most other specialties.

Still, we have a lot of nonclinical stuff to keep up with. Consider the concept of “managing to Medicare reimbursement.” This means managing a practice or hospital in a way that minimizes the failure to capture all appropriate Medicare reimbursement dollars. Even if you’ve never heard of this concept before, there are probably a lot of people at your hospital who have this as their main responsibility, and clinicians should know something about it.

So in an effort to distract the fewest brain cells away from clinical matters, here is a very simple overview of some components of managing to Medicare reimbursement relevant to hospitalists. This isn’t a comprehensive list, only some hospitalist-relevant highlights.

Medicare Reimbursement Today

Accurate determination of inpatient vs. observation status. Wow, this can get complicated. Most hospitals have people who devote significant time to doing this for patients every day, and even those experts sometimes disagree on the appropriate status. But all hospitalists should have a basic understanding of how this works and a willingness to answer questions from the hospital’s experts, and, when appropriate, write additional information in the chart to clarify the appropriate status.

Optimal resource utilization, including length of stay. Because Medicare pays an essentially fixed amount based on the diagnoses for each inpatient admission, managing costs is critical to a hospital’s financial well-being. Hospitalists have a huge role in this. And regardless of how Medicare reimburses for services, there is clinical rationale for being careful about resources used and how long someone stays in a hospital. In many cases, more is not better—and it even could be worse—for the patient.

Optimal clinical documentation and accurate DRG assignment. Good documentation is important for clinical care, but beyond that, the precise way things are documented can have significant influence on Medicare reimbursement. Low potassium might in some cases lead to higher reimbursement, but a doctor must write “hypokalemia”; simply writing K+ means the hospital can’t include hypokalemia as a diagnosis. (A doctor, nurse practitioner, or physician assistant must write out “hypokalemia” only once for Medicare purposes; it would then be fine to use K+ in the chart every other time.)

Say you have a patient with a UTI and sepsis. Write only “urosepsis,” and the hospital must bill for cystitis—low reimbursement. Write “urinary tract infection with sepsis,” and the hospital can bill for higher reimbursement.

There should be people at your hospital who are experts at this, and all hospitalists should work with them to learn appropriate documentation language to describe illnesses correctly for billing purposes. Many hospitals use a system of “DRG queries,” which hospitalists should always respond to (though they should agree with the issue raised, such as “was the pneumonia likely due to aspiration?” only when clinically appropriate).

Change Is Coming

Don’t make the mistake of thinking Medicare reimbursement is a static phenomenon. It is undergoing rapid and significant evolution. For example, the Affordable Care Act, aka healthcare reform legislation, provides for a number of changes hospitalists need to understand.

I suggest that you make sure to understand your hospital’s or medical group’s position on accountable-care organizations (ACOs). It is a pretty complicated program that, in the first few years, has modest impact on reimbursement. If the ACO performs well, the additional reimbursement to an organization might pay for little more than the staff salaries of the staff that managed the considerable complexity of enrolling in and reporting for the program. And there is a risk the organization could lose money if it doesn’t perform well. So many organizations have decided not to pursue participation as an ACO, but they may decide to put in place most of the elements of an ACO without enrolling in the program. Some refer to this as an “aco” rather than an “ACO.”

Value-based purchasing (VBP) is set to influence hospital reimbursement rates starting in 2013 based on a hospital’s performance in 2012. SHM has a terrific VBP toolkit available online.

Bundled payments and financial penalties for readmissions also take effect in 2013. Now is the time ensure that you understand the implications of these programs; they are designed so that the financial impact to most organizations will be modest.

Reimbursement penalties for a specified list of hospital-acquired conditions (HACs) will begin in 2015. Conditions most relevant for hospitalists include vascular catheter-related bloodstream infections, catheter-related urinary infection, or manifestations of poor glycemic control (HONK, DKA, hypo-/hyperglycemia).

I plan to address some of these programs in greater detail in future practice management columns.

Dr. Nelson has been a practicing hospitalist since 1988 and is co-founder and past president of SHM. He is a principal in Nelson Flores Hospital Medicine Consultants, a national hospitalist practice management consulting firm (www.nelsonflores.com). He is also course co-director and faculty for SHM’s “Best Practices in Managing a Hospital Medicine Program” course. This column represents his views and is not intended to reflect an official position of SHM.

I think 70% to 80% of U.S. hospitals now have a hospitalist practice. (Some have more than one hospitalist group operating within their walls.) I arrived at this estimate by relying on both my anecdotal experience and on the annual American Hospital Association survey, which in 2009 showed 58% of hospitals have hospitalists, with an ongoing rapid rate of adoption.

No regular reader of The Hospitalist should be surprised that most U.S. hospitals now have hospitalists, but some might be surprised that 20% to 30% don’t. There are about 5,800 hospitals in the U.S. (a ballpark figure), so that means about 1,100 to 1,800 don’t have hospitalists. What is unique about them?

For some hospitals, the answer is easy. For example, the U.S. has something like 450 psychiatric hospitals. They vary a lot, but many simply don’t accept patients with active medical problems, so these facilities would have little need for medical hospitalists.

Variations in how the term “hospitalist” is used probably account for some facilities reporting no hospitalists. For example, long-term acute-care hospitals (LTACs) might have dedicated inpatient providers but simply don’t call them hospitalists.

Even accounting for these things, there are still a lot of “med-surg” hospitals that say they don’t have hospitalists.

The Holdouts

My experience suggests the two most important reasons some hospitals have not yet developed a hospitalist practice are an oversupply of primary-care physicians (PCPs) and an attractive payor mix in the unassigned patient population. In fact, it is hard for me to imagine a hospital that enjoys both of these attributes ever being able to support hospitalists.

Although it isn’t a common problem, an excess of PCPs (or dearth of patients) removes the most universal and powerful stimulus to develop a hospitalist practice: the desire of PCPs to be relieved of hospital work. And in most cases, those PCPs can offset the loss of hospital work and its associated revenue, with more work in the office. This can mean a better lifestyle (e.g. no trips to the hospital on nights and weekends) and the same or higher income. But if there are too many PCPs in the community, they may be unwilling to give up the hospital work, as there might be no way to replace it in the office. End result: no hospitalists.

For the rare hospital that has an attractive ED-unassigned payor mix, PCPs are more likely to want to continue taking ED call and not support a proposal to develop a hospitalist practice. And access to the ED call roster can be important to new PCPs building a community practice. I have seen situations in which a hospital has addressed the poor reimbursement of unattached ED admissions by paying PCPs to provide that care. Even though that same hospital might want a hospitalist practice, the ED call payment it is providing to PCPs may create a barrier that can’t be overcome. Such a hospital will face the very difficult decision of terminating the payments for ED call and redirecting that money to a hospitalist practice—something that is likely to lead to a lot of frustration on the part of PCPs who depend on the pay-for-call arrangement. A common outcome: no hospitalists.

An occasional reason hospitals are late to the hospitalist party is one or two (rarely more than that) of its private PCPs have simply chosen to work heroic amounts, and in addition to office and hospital care of their private patients, they accept referrals from other PCPs. I have met a number of doctors like this. Some are terrific doctors who actively participate in hospital initiatives; many appear chronically tired and harried, and hospital staff express frustration that they do things like make rounds at 3 a.m., take hours to respond to urgent calls, refuse to use protocols, etc. But because they’ve responded to the PCPs’ desire to be relieved of hospital work, other doctors may rally to their support and prevent the hospital from moving forward with a hospitalist program.

Will Every Hospital Have Hospitalists Eventually?

It is really interesting to think about whether every hospital, outside narrow specialty hospitals, will have hospitalists in the future. I wonder what informed people in the 1970s and early 1980s were predicting for emergency medicine’s future. At that point it probably wasn’t clear that, in the future, dedicated ED doctors essentially would staff every ED in the country, but I think that is exactly what has happened. (I once worked with an approximately 100-bed rural hospital that didn’t have ED physicians until 1999. I wonder if they were the last adopter.)

I think hospitalists are critically important for nearly all med-surg hospitals; however, maybe there will always be a small number that either have PCPs continue to practice in the traditional model, working both outpatient and inpatient, or some other effective configuration that makes hospitalists less necessary. We’ll have to wait and see. But I’m pretty confident

that almost no institutions that have hospitalists will ever return to the pre-hospitalist model of care. It seems there is no going back.

For those hospitals without hospitalists currently who will at some future time have hospitalists, the right time for this to happen is dependent on a combination of local factors. It could be something like the departure (i.e. relocation or retirement) of some of the current doctors, or simply the arrival of someone who has a vision and energy to successfully navigate the obstacles to build one. TH

Dr. Nelson has been a practicing hospitalist since 1988 and is co-founder and past president of SHM. He is a principal in Nelson Flores Hospital Medicine Consultants, a national hospitalist practice management consulting firm (www.nelsonflores.com). He is also course co-director and faculty for SHM’s “Best Practices in Managing a Hospital Medicine Program” course. This column represents his views and is not intended to reflect an official position of SHM.</p>

I think 70% to 80% of U.S. hospitals now have a hospitalist practice. (Some have more than one hospitalist group operating within their walls.) I arrived at this estimate by relying on both my anecdotal experience and on the annual American Hospital Association survey, which in 2009 showed 58% of hospitals have hospitalists, with an ongoing rapid rate of adoption.

No regular reader of The Hospitalist should be surprised that most U.S. hospitals now have hospitalists, but some might be surprised that 20% to 30% don’t. There are about 5,800 hospitals in the U.S. (a ballpark figure), so that means about 1,100 to 1,800 don’t have hospitalists. What is unique about them?

For some hospitals, the answer is easy. For example, the U.S. has something like 450 psychiatric hospitals. They vary a lot, but many simply don’t accept patients with active medical problems, so these facilities would have little need for medical hospitalists.

Variations in how the term “hospitalist” is used probably account for some facilities reporting no hospitalists. For example, long-term acute-care hospitals (LTACs) might have dedicated inpatient providers but simply don’t call them hospitalists.

Even accounting for these things, there are still a lot of “med-surg” hospitals that say they don’t have hospitalists.

The Holdouts

My experience suggests the two most important reasons some hospitals have not yet developed a hospitalist practice are an oversupply of primary-care physicians (PCPs) and an attractive payor mix in the unassigned patient population. In fact, it is hard for me to imagine a hospital that enjoys both of these attributes ever being able to support hospitalists.

Although it isn’t a common problem, an excess of PCPs (or dearth of patients) removes the most universal and powerful stimulus to develop a hospitalist practice: the desire of PCPs to be relieved of hospital work. And in most cases, those PCPs can offset the loss of hospital work and its associated revenue, with more work in the office. This can mean a better lifestyle (e.g. no trips to the hospital on nights and weekends) and the same or higher income. But if there are too many PCPs in the community, they may be unwilling to give up the hospital work, as there might be no way to replace it in the office. End result: no hospitalists.

For the rare hospital that has an attractive ED-unassigned payor mix, PCPs are more likely to want to continue taking ED call and not support a proposal to develop a hospitalist practice. And access to the ED call roster can be important to new PCPs building a community practice. I have seen situations in which a hospital has addressed the poor reimbursement of unattached ED admissions by paying PCPs to provide that care. Even though that same hospital might want a hospitalist practice, the ED call payment it is providing to PCPs may create a barrier that can’t be overcome. Such a hospital will face the very difficult decision of terminating the payments for ED call and redirecting that money to a hospitalist practice—something that is likely to lead to a lot of frustration on the part of PCPs who depend on the pay-for-call arrangement. A common outcome: no hospitalists.

An occasional reason hospitals are late to the hospitalist party is one or two (rarely more than that) of its private PCPs have simply chosen to work heroic amounts, and in addition to office and hospital care of their private patients, they accept referrals from other PCPs. I have met a number of doctors like this. Some are terrific doctors who actively participate in hospital initiatives; many appear chronically tired and harried, and hospital staff express frustration that they do things like make rounds at 3 a.m., take hours to respond to urgent calls, refuse to use protocols, etc. But because they’ve responded to the PCPs’ desire to be relieved of hospital work, other doctors may rally to their support and prevent the hospital from moving forward with a hospitalist program.

Will Every Hospital Have Hospitalists Eventually?

It is really interesting to think about whether every hospital, outside narrow specialty hospitals, will have hospitalists in the future. I wonder what informed people in the 1970s and early 1980s were predicting for emergency medicine’s future. At that point it probably wasn’t clear that, in the future, dedicated ED doctors essentially would staff every ED in the country, but I think that is exactly what has happened. (I once worked with an approximately 100-bed rural hospital that didn’t have ED physicians until 1999. I wonder if they were the last adopter.)

I think hospitalists are critically important for nearly all med-surg hospitals; however, maybe there will always be a small number that either have PCPs continue to practice in the traditional model, working both outpatient and inpatient, or some other effective configuration that makes hospitalists less necessary. We’ll have to wait and see. But I’m pretty confident

that almost no institutions that have hospitalists will ever return to the pre-hospitalist model of care. It seems there is no going back.

For those hospitals without hospitalists currently who will at some future time have hospitalists, the right time for this to happen is dependent on a combination of local factors. It could be something like the departure (i.e. relocation or retirement) of some of the current doctors, or simply the arrival of someone who has a vision and energy to successfully navigate the obstacles to build one. TH

Dr. Nelson has been a practicing hospitalist since 1988 and is co-founder and past president of SHM. He is a principal in Nelson Flores Hospital Medicine Consultants, a national hospitalist practice management consulting firm (www.nelsonflores.com). He is also course co-director and faculty for SHM’s “Best Practices in Managing a Hospital Medicine Program” course. This column represents his views and is not intended to reflect an official position of SHM.</p>

I think 70% to 80% of U.S. hospitals now have a hospitalist practice. (Some have more than one hospitalist group operating within their walls.) I arrived at this estimate by relying on both my anecdotal experience and on the annual American Hospital Association survey, which in 2009 showed 58% of hospitals have hospitalists, with an ongoing rapid rate of adoption.

No regular reader of The Hospitalist should be surprised that most U.S. hospitals now have hospitalists, but some might be surprised that 20% to 30% don’t. There are about 5,800 hospitals in the U.S. (a ballpark figure), so that means about 1,100 to 1,800 don’t have hospitalists. What is unique about them?

For some hospitals, the answer is easy. For example, the U.S. has something like 450 psychiatric hospitals. They vary a lot, but many simply don’t accept patients with active medical problems, so these facilities would have little need for medical hospitalists.

Variations in how the term “hospitalist” is used probably account for some facilities reporting no hospitalists. For example, long-term acute-care hospitals (LTACs) might have dedicated inpatient providers but simply don’t call them hospitalists.

Even accounting for these things, there are still a lot of “med-surg” hospitals that say they don’t have hospitalists.

The Holdouts

My experience suggests the two most important reasons some hospitals have not yet developed a hospitalist practice are an oversupply of primary-care physicians (PCPs) and an attractive payor mix in the unassigned patient population. In fact, it is hard for me to imagine a hospital that enjoys both of these attributes ever being able to support hospitalists.

Although it isn’t a common problem, an excess of PCPs (or dearth of patients) removes the most universal and powerful stimulus to develop a hospitalist practice: the desire of PCPs to be relieved of hospital work. And in most cases, those PCPs can offset the loss of hospital work and its associated revenue, with more work in the office. This can mean a better lifestyle (e.g. no trips to the hospital on nights and weekends) and the same or higher income. But if there are too many PCPs in the community, they may be unwilling to give up the hospital work, as there might be no way to replace it in the office. End result: no hospitalists.

For the rare hospital that has an attractive ED-unassigned payor mix, PCPs are more likely to want to continue taking ED call and not support a proposal to develop a hospitalist practice. And access to the ED call roster can be important to new PCPs building a community practice. I have seen situations in which a hospital has addressed the poor reimbursement of unattached ED admissions by paying PCPs to provide that care. Even though that same hospital might want a hospitalist practice, the ED call payment it is providing to PCPs may create a barrier that can’t be overcome. Such a hospital will face the very difficult decision of terminating the payments for ED call and redirecting that money to a hospitalist practice—something that is likely to lead to a lot of frustration on the part of PCPs who depend on the pay-for-call arrangement. A common outcome: no hospitalists.

An occasional reason hospitals are late to the hospitalist party is one or two (rarely more than that) of its private PCPs have simply chosen to work heroic amounts, and in addition to office and hospital care of their private patients, they accept referrals from other PCPs. I have met a number of doctors like this. Some are terrific doctors who actively participate in hospital initiatives; many appear chronically tired and harried, and hospital staff express frustration that they do things like make rounds at 3 a.m., take hours to respond to urgent calls, refuse to use protocols, etc. But because they’ve responded to the PCPs’ desire to be relieved of hospital work, other doctors may rally to their support and prevent the hospital from moving forward with a hospitalist program.

Will Every Hospital Have Hospitalists Eventually?

It is really interesting to think about whether every hospital, outside narrow specialty hospitals, will have hospitalists in the future. I wonder what informed people in the 1970s and early 1980s were predicting for emergency medicine’s future. At that point it probably wasn’t clear that, in the future, dedicated ED doctors essentially would staff every ED in the country, but I think that is exactly what has happened. (I once worked with an approximately 100-bed rural hospital that didn’t have ED physicians until 1999. I wonder if they were the last adopter.)

I think hospitalists are critically important for nearly all med-surg hospitals; however, maybe there will always be a small number that either have PCPs continue to practice in the traditional model, working both outpatient and inpatient, or some other effective configuration that makes hospitalists less necessary. We’ll have to wait and see. But I’m pretty confident

that almost no institutions that have hospitalists will ever return to the pre-hospitalist model of care. It seems there is no going back.

For those hospitals without hospitalists currently who will at some future time have hospitalists, the right time for this to happen is dependent on a combination of local factors. It could be something like the departure (i.e. relocation or retirement) of some of the current doctors, or simply the arrival of someone who has a vision and energy to successfully navigate the obstacles to build one. TH

Dr. Nelson has been a practicing hospitalist since 1988 and is co-founder and past president of SHM. He is a principal in Nelson Flores Hospital Medicine Consultants, a national hospitalist practice management consulting firm (www.nelsonflores.com). He is also course co-director and faculty for SHM’s “Best Practices in Managing a Hospital Medicine Program” course. This column represents his views and is not intended to reflect an official position of SHM.</p>

Hospital medicine is fortunate to have many very dedicated and professionally centered doctors who work enthusiastically to both provide excellent care to their patients and work to make their own practice and their hospital a better place. I am lucky to practice with many of them in our practice in Bellevue, Wash.

Yet a significant portion of hospitalists have chosen this work because they’re looking for relatively-low-commitment work. In essence, they see themselves as dating their practice rather than marrying it. Some of them might even say, “I thought I wanted a career. It turns out all I wanted was a paycheck.”

Most are skilled clinicians who find the energy to do a good job for the patients under their care but don’t have a mindset of owning their practice and investing time in making it perform better.

This gives rise to a dilemma: How can a practice turn these perfectly capable physicians into meaningfully engaged participants in the hospitalist practice itself and the hospital as a whole? What about a salary bonus based on good citizenship? Would that cause them to become more engaged and committed?

There is voluminous research and a whole row of books at your local Barnes & Noble that address these questions more completely that I can, so I’ll just share some real-world experience and insights from one book.

What Might a Citizenship Bonus Look Like?

There are a number of ways to consider designing a citizenship bonus. At a previous SHM practice-management course, Win Whitcomb, MD, MHM, presented one example from Mercy Medical Center in Springfield, Mass. (see Figure 1).

The following kinds of activities might be appropriate for a hospitalist to earn a citizenship bonus:

• Active participation on approved hospital committees (e.g. the pharmacy and therapeutic committees) and regular input from and feedback to the hospitalist group (e.g. via e-mail) about relevant activities of the committee;
• A project to improve clinical care (e.g. improved glycemic control, fall prevention, med reconciliation, discharge processes, readmission rates, ensuring follow-up of tests resulted after discharge, etc.);
• A project to improve business operations—for example, improve our billing/coding accuracy. Such a project could be to develop a new progress note template and collect data regarding its use and effectiveness;
• Work to improve communication and interaction with other hospital staff—for example, joint rounding with nurses, improve throughput, etc.; and
• Project(s) to increase the group’s social cohesion and engagement with hospital initiatives and goals.

Does a Citizenship Bonus Help or Hinder a Practice?

From the experience Mercy Hospital had with the citizenship bonus, Win concluded that many, but not all, hospitalists who don’t seem interested in quality improvement (QI) will become engaged if there is a reward/recognition structure. A relatively small dollar bonus is OK, as long as non-monetary rewards exist (e.g. improvement demonstrable, sense of teamwork, recognition). And hospitalists who were engaged prior to establishing the salary incentive are not likely to change their behavior, but their effort is now recognized—allowing for sustained engagement.

I’m sure many institutions would find a similar desirable outcome from putting into place a citizenship bonus. But it isn’t a guarantee. All performance bonus programs, whether based on “hard” outcomes like patient satisfaction scores or “soft” things like citizenship, are tricky to set up and operate effectively.

I have seen well-intentioned efforts to create a citizenship bonus lead to an increase in hospitalists working on projects outside of direct patient care, but at a cost of leading them to focus more intently on just how much they’re being paid for any work outside of direct patient care. It seems that the bonus might have ignited more frustration and concern about compensation, and any benefit to the practice might have been offset by harm to group culture. And if the bonus goes away, some doctors might be even less engaged than they were before it was turned on.

In “Drive: The Surprising Truth About What Motivates Us,” Daniel Pink makes a pretty convincing case that “the more prominent salary, perks, and benefits are in someone’s work life, the more they can inhibit creativity and unravel performance.” He makes the case that organizations are most demotivating “when they use rewards like money to motivate staff.”

“Effective organizations compensate people in amounts and ways that allow individuals to mostly forget about compensation and instead focus on the work itself,” Pink writes.

How do you allow individuals to forget about compensation? He says ensure internal and external fairness in compensation; pay more than average; and if you use performance metrics, make them wide-ranging, relevant, and hard to game.

So maybe financial compensation for citizenship, whether paid through a bonus, hourly, or some other separate salary element, isn’t such a good idea for a hospitalist practice (or any physician practice?). I don’t have a definitive answer, so you’ll have to decide this for yourself. But my hunch is that groups with a thriving culture might in some cases benefit from a well-designed citizenship bonus. That said, those groups also could be the ones less in need of it.

Groups that already have a weak or unhealthy culture, or are frustrated by what they see is inadequate compensation for clinical work, might find such a bonus leads to problems that offset its benefit.

Training in leadership, quality improvement, and other non-clinical areas that are critical for the success of a hospitalist practice is always worthwhile and might capture many of the benefits of a citizenship bonus without its drawbacks.

Dr. Nelson has been a practicing hospitalist since 1988 and is co-founder and past president of SHM. He is a principal in Nelson Flores Hospital Medicine Consultants, a national hospitalist practice management consulting firm (www.nelsonflores.com). He is also course co-director and faculty for SHM’s “Best Practices in Managing a Hospital Medicine Program” course. This column represents his views and is not intended to reflect an official position of SHM.

Hospital medicine is fortunate to have many very dedicated and professionally centered doctors who work enthusiastically to both provide excellent care to their patients and work to make their own practice and their hospital a better place. I am lucky to practice with many of them in our practice in Bellevue, Wash.

Yet a significant portion of hospitalists have chosen this work because they’re looking for relatively-low-commitment work. In essence, they see themselves as dating their practice rather than marrying it. Some of them might even say, “I thought I wanted a career. It turns out all I wanted was a paycheck.”

Most are skilled clinicians who find the energy to do a good job for the patients under their care but don’t have a mindset of owning their practice and investing time in making it perform better.

This gives rise to a dilemma: How can a practice turn these perfectly capable physicians into meaningfully engaged participants in the hospitalist practice itself and the hospital as a whole? What about a salary bonus based on good citizenship? Would that cause them to become more engaged and committed?

There is voluminous research and a whole row of books at your local Barnes & Noble that address these questions more completely that I can, so I’ll just share some real-world experience and insights from one book.

What Might a Citizenship Bonus Look Like?

There are a number of ways to consider designing a citizenship bonus. At a previous SHM practice-management course, Win Whitcomb, MD, MHM, presented one example from Mercy Medical Center in Springfield, Mass. (see Figure 1).

The following kinds of activities might be appropriate for a hospitalist to earn a citizenship bonus:

• Active participation on approved hospital committees (e.g. the pharmacy and therapeutic committees) and regular input from and feedback to the hospitalist group (e.g. via e-mail) about relevant activities of the committee;
• A project to improve clinical care (e.g. improved glycemic control, fall prevention, med reconciliation, discharge processes, readmission rates, ensuring follow-up of tests resulted after discharge, etc.);
• A project to improve business operations—for example, improve our billing/coding accuracy. Such a project could be to develop a new progress note template and collect data regarding its use and effectiveness;
• Work to improve communication and interaction with other hospital staff—for example, joint rounding with nurses, improve throughput, etc.; and
• Project(s) to increase the group’s social cohesion and engagement with hospital initiatives and goals.

Does a Citizenship Bonus Help or Hinder a Practice?

From the experience Mercy Hospital had with the citizenship bonus, Win concluded that many, but not all, hospitalists who don’t seem interested in quality improvement (QI) will become engaged if there is a reward/recognition structure. A relatively small dollar bonus is OK, as long as non-monetary rewards exist (e.g. improvement demonstrable, sense of teamwork, recognition). And hospitalists who were engaged prior to establishing the salary incentive are not likely to change their behavior, but their effort is now recognized—allowing for sustained engagement.

I’m sure many institutions would find a similar desirable outcome from putting into place a citizenship bonus. But it isn’t a guarantee. All performance bonus programs, whether based on “hard” outcomes like patient satisfaction scores or “soft” things like citizenship, are tricky to set up and operate effectively.

I have seen well-intentioned efforts to create a citizenship bonus lead to an increase in hospitalists working on projects outside of direct patient care, but at a cost of leading them to focus more intently on just how much they’re being paid for any work outside of direct patient care. It seems that the bonus might have ignited more frustration and concern about compensation, and any benefit to the practice might have been offset by harm to group culture. And if the bonus goes away, some doctors might be even less engaged than they were before it was turned on.

In “Drive: The Surprising Truth About What Motivates Us,” Daniel Pink makes a pretty convincing case that “the more prominent salary, perks, and benefits are in someone’s work life, the more they can inhibit creativity and unravel performance.” He makes the case that organizations are most demotivating “when they use rewards like money to motivate staff.”

“Effective organizations compensate people in amounts and ways that allow individuals to mostly forget about compensation and instead focus on the work itself,” Pink writes.

How do you allow individuals to forget about compensation? He says ensure internal and external fairness in compensation; pay more than average; and if you use performance metrics, make them wide-ranging, relevant, and hard to game.

So maybe financial compensation for citizenship, whether paid through a bonus, hourly, or some other separate salary element, isn’t such a good idea for a hospitalist practice (or any physician practice?). I don’t have a definitive answer, so you’ll have to decide this for yourself. But my hunch is that groups with a thriving culture might in some cases benefit from a well-designed citizenship bonus. That said, those groups also could be the ones less in need of it.

Groups that already have a weak or unhealthy culture, or are frustrated by what they see is inadequate compensation for clinical work, might find such a bonus leads to problems that offset its benefit.

Training in leadership, quality improvement, and other non-clinical areas that are critical for the success of a hospitalist practice is always worthwhile and might capture many of the benefits of a citizenship bonus without its drawbacks.

Dr. Nelson has been a practicing hospitalist since 1988 and is co-founder and past president of SHM. He is a principal in Nelson Flores Hospital Medicine Consultants, a national hospitalist practice management consulting firm (www.nelsonflores.com). He is also course co-director and faculty for SHM’s “Best Practices in Managing a Hospital Medicine Program” course. This column represents his views and is not intended to reflect an official position of SHM.

Hospital medicine is fortunate to have many very dedicated and professionally centered doctors who work enthusiastically to both provide excellent care to their patients and work to make their own practice and their hospital a better place. I am lucky to practice with many of them in our practice in Bellevue, Wash.

Yet a significant portion of hospitalists have chosen this work because they’re looking for relatively-low-commitment work. In essence, they see themselves as dating their practice rather than marrying it. Some of them might even say, “I thought I wanted a career. It turns out all I wanted was a paycheck.”

Most are skilled clinicians who find the energy to do a good job for the patients under their care but don’t have a mindset of owning their practice and investing time in making it perform better.

This gives rise to a dilemma: How can a practice turn these perfectly capable physicians into meaningfully engaged participants in the hospitalist practice itself and the hospital as a whole? What about a salary bonus based on good citizenship? Would that cause them to become more engaged and committed?

There is voluminous research and a whole row of books at your local Barnes & Noble that address these questions more completely that I can, so I’ll just share some real-world experience and insights from one book.

What Might a Citizenship Bonus Look Like?

There are a number of ways to consider designing a citizenship bonus. At a previous SHM practice-management course, Win Whitcomb, MD, MHM, presented one example from Mercy Medical Center in Springfield, Mass. (see Figure 1).

The following kinds of activities might be appropriate for a hospitalist to earn a citizenship bonus:

• Active participation on approved hospital committees (e.g. the pharmacy and therapeutic committees) and regular input from and feedback to the hospitalist group (e.g. via e-mail) about relevant activities of the committee;
• A project to improve clinical care (e.g. improved glycemic control, fall prevention, med reconciliation, discharge processes, readmission rates, ensuring follow-up of tests resulted after discharge, etc.);
• A project to improve business operations—for example, improve our billing/coding accuracy. Such a project could be to develop a new progress note template and collect data regarding its use and effectiveness;
• Work to improve communication and interaction with other hospital staff—for example, joint rounding with nurses, improve throughput, etc.; and
• Project(s) to increase the group’s social cohesion and engagement with hospital initiatives and goals.

Does a Citizenship Bonus Help or Hinder a Practice?

From the experience Mercy Hospital had with the citizenship bonus, Win concluded that many, but not all, hospitalists who don’t seem interested in quality improvement (QI) will become engaged if there is a reward/recognition structure. A relatively small dollar bonus is OK, as long as non-monetary rewards exist (e.g. improvement demonstrable, sense of teamwork, recognition). And hospitalists who were engaged prior to establishing the salary incentive are not likely to change their behavior, but their effort is now recognized—allowing for sustained engagement.

I’m sure many institutions would find a similar desirable outcome from putting into place a citizenship bonus. But it isn’t a guarantee. All performance bonus programs, whether based on “hard” outcomes like patient satisfaction scores or “soft” things like citizenship, are tricky to set up and operate effectively.

I have seen well-intentioned efforts to create a citizenship bonus lead to an increase in hospitalists working on projects outside of direct patient care, but at a cost of leading them to focus more intently on just how much they’re being paid for any work outside of direct patient care. It seems that the bonus might have ignited more frustration and concern about compensation, and any benefit to the practice might have been offset by harm to group culture. And if the bonus goes away, some doctors might be even less engaged than they were before it was turned on.

In “Drive: The Surprising Truth About What Motivates Us,” Daniel Pink makes a pretty convincing case that “the more prominent salary, perks, and benefits are in someone’s work life, the more they can inhibit creativity and unravel performance.” He makes the case that organizations are most demotivating “when they use rewards like money to motivate staff.”

“Effective organizations compensate people in amounts and ways that allow individuals to mostly forget about compensation and instead focus on the work itself,” Pink writes.

How do you allow individuals to forget about compensation? He says ensure internal and external fairness in compensation; pay more than average; and if you use performance metrics, make them wide-ranging, relevant, and hard to game.

So maybe financial compensation for citizenship, whether paid through a bonus, hourly, or some other separate salary element, isn’t such a good idea for a hospitalist practice (or any physician practice?). I don’t have a definitive answer, so you’ll have to decide this for yourself. But my hunch is that groups with a thriving culture might in some cases benefit from a well-designed citizenship bonus. That said, those groups also could be the ones less in need of it.

Groups that already have a weak or unhealthy culture, or are frustrated by what they see is inadequate compensation for clinical work, might find such a bonus leads to problems that offset its benefit.

Training in leadership, quality improvement, and other non-clinical areas that are critical for the success of a hospitalist practice is always worthwhile and might capture many of the benefits of a citizenship bonus without its drawbacks.

Dr. Nelson has been a practicing hospitalist since 1988 and is co-founder and past president of SHM. He is a principal in Nelson Flores Hospital Medicine Consultants, a national hospitalist practice management consulting firm (www.nelsonflores.com). He is also course co-director and faculty for SHM’s “Best Practices in Managing a Hospital Medicine Program” course. This column represents his views and is not intended to reflect an official position of SHM.

Last month (see “Hospital-Focused Practice,” Septem-ber 2011, p. 61), I discussed the adoption of the hospitalist model of practice by many specialties, some of the common issues they face, and highlighted a national meeting to examine this phenomenon (for more information on the meeting, visit www.hospitalmedicine/hfpm). This month, relying mostly on my own experience with this practice model, I’ll drill deeper into OB hospitalists (also known as laborists). While there are a lot of ways in which hospitalist practice in many specialties are the same, laborists differ from those in other fields in important and interesting ways.

Prevalence

One of the most informative sources about the “laborist movement” is ObGynHospitalist.com, a website started and managed by Dr. Rob Olson, an enterprising laborist in Bellingham, Wash. As of July, the site listed 132 laborist programs nationwide (and that figure likely underestimates the actual number in operation). A survey of registered users of the website in April yielded 106 responses, representing a 24% response rate. Seventy-five of the respondents indicated they were full-time laborists.

Unique Drivers

Because obstetric malpractice costs are so high, and many lawsuits are related to delayed response to obstetric emergencies, there is hope (not much hard proof yet) that outcomes will be better, and lawsuits less common or less costly.¹ So the hope of reduced malpractice costs figures more prominently into the cost-benefit analysis of the OB hospitalist model than most other types of HM practice.

Financial Model

It appears that all hospitalist models require financial support over and above professional fee revenue. Hospitals usually are willing (happy?) to provide this money because they can make back even more as a result of increased patient volume/market share or lower costs. And, as is the case for hospitalists in other specialties, laborist presence can be an asset in recruitment and retention of other OBGYNs.

I think the most interesting feature of laborist practice is that in many settings, it has the potential to open new sources of revenue—both hospital “facility fee” and professional fee revenue. A common practice in many hospitals is for obstetricians to send patients, or for them to self-present, to labor and delivery to be checked for a cold, vomiting, or whether labor has started. Many times, a nurse performs these checks, communicates with a doctor, then discharges the patient—and no bill is generated. An on-site laborist can see the same patients (presumably making for a higher-quality visit for the patient) and, assuming the visit is medically necessary, both a facility and professional charge can be submitted. Revenue from such visits can go a long way toward making up the difference between the total cost of the laborist program and fee collections. This adds to patient safety, as each patient is evaluated in person by a physician rather than only a nurse.

In most settings, the laborist submits a charge for delivery only for unassigned patients. For those patients who “belong to” another OB who provided prenatal care, it is often most practical for that doctor to submit the global fee for prenatal care and delivery, and to pay the laborist program an agreed-upon rate for each service provided.

Compensation

Laborists often are paid an hourly rate, and they typically don’t have a salary component tied to work relative-value unit (wRVU) production or other productivity metrics. Total annual compensation is typically lower than private-practice OBGYN physicians. It also varies widely, depending on local market forces, job description, and workload. Most programs are trying to implement meaningful quality bonuses for laborists.

Scope of Practice

Laborists typically provide care to all unassigned patients who present to labor and delivery, and perform deliveries, C-sections, and other services on patients when requested by OBs in traditional practice. Requests arise when an OB simply needs to be relieved of being on call for their private patients, or when an emergency arises. (These “as-needed” referrals are different from the most common arrangement for “medical hospitalist” practices that ask other doctors to refer all or none of their patients, not just when they are otherwise occupied.)

Lastly, the laborist might serve as surgical assistant to other OBGYNs. In nearly all settings, there is no need to require that any physicians refer to the laborist, and the other OBs are free to decide when to refer.

A reasonably common scenario is that, to avoid disruption of scheduled office hours, an OB in traditional practice might ask that the laborist manage a patient who presents in labor. But if still undelivered at the close of office hours, the traditional OB might assume care from that point on or have the laborist remain responsible through delivery. The traditional OB usually will make post-partum “rounding” visits on all of their patients but could rely on the laborist for these visits.

In most cases, the laborist does not have any scheduled gynecologic procedures, though he or she may see GYN consults throughout the hospital as time permits. Laborists typically have no outpatient responsibilities, but some OBGYN hospitalists cover GYN in the ED.

Operational Structure

Although models vary significantly, the single most common arrangement is for laborists to work 24-hour, in-house shifts. Rarely is there a need or justification to have more than one laborist on at a time. For a single physician, seven or eight 24-hour shifts per month is considered full-time. My experience is that most laborists are employed by the hospital in which they work.

As is the case in every specialty, some large OBGYN groups adopt a rotating laborist model, in which one member of their group becomes the laborist for 24 hours at a time, during which they are relieved of all other responsibilities.

Recruitment

ObGynHospitalist.com shows that, as of July, 40 of the 132 laborist programs that had identified themselves on the site were recruiting. My experience is that unlike “medical hospitalist” practices, which tend to successfully recruit those very early in their career, or “surgical hospitalist” programs, which target mid- to late-career general surgeons, laborist candidates come from any point in their careers. Most programs prefer that a laborist has several years of post-residency experience, but they generally have no other preference.

Dr. Nelson has been a practicing hospitalist since 1988 and is cofounder and past president of SHM. He is a principal in Nelson Flores Hospital Medicine Consultants, a national hospitalist practice management consulting firm (www.nelsonflores.com). He is course codirector and faculty for SHM’s “Best Practices in Managing a Hospital Medicine Program” course. This column represents his views and is not intended to reflect an official position of SHM.

Reference

1. Clark SL, Belfort MA, Dildy GA, Meyers JA. Reducing obstetric litigation through alterations in practice patterns. Obstet Gynecol. 2008;112(6):1279-1283.

Last month (see “Hospital-Focused Practice,” Septem-ber 2011, p. 61), I discussed the adoption of the hospitalist model of practice by many specialties, some of the common issues they face, and highlighted a national meeting to examine this phenomenon (for more information on the meeting, visit www.hospitalmedicine/hfpm). This month, relying mostly on my own experience with this practice model, I’ll drill deeper into OB hospitalists (also known as laborists). While there are a lot of ways in which hospitalist practice in many specialties are the same, laborists differ from those in other fields in important and interesting ways.

Prevalence

One of the most informative sources about the “laborist movement” is ObGynHospitalist.com, a website started and managed by Dr. Rob Olson, an enterprising laborist in Bellingham, Wash. As of July, the site listed 132 laborist programs nationwide (and that figure likely underestimates the actual number in operation). A survey of registered users of the website in April yielded 106 responses, representing a 24% response rate. Seventy-five of the respondents indicated they were full-time laborists.

Unique Drivers

Because obstetric malpractice costs are so high, and many lawsuits are related to delayed response to obstetric emergencies, there is hope (not much hard proof yet) that outcomes will be better, and lawsuits less common or less costly.¹ So the hope of reduced malpractice costs figures more prominently into the cost-benefit analysis of the OB hospitalist model than most other types of HM practice.

Financial Model

It appears that all hospitalist models require financial support over and above professional fee revenue. Hospitals usually are willing (happy?) to provide this money because they can make back even more as a result of increased patient volume/market share or lower costs. And, as is the case for hospitalists in other specialties, laborist presence can be an asset in recruitment and retention of other OBGYNs.

I think the most interesting feature of laborist practice is that in many settings, it has the potential to open new sources of revenue—both hospital “facility fee” and professional fee revenue. A common practice in many hospitals is for obstetricians to send patients, or for them to self-present, to labor and delivery to be checked for a cold, vomiting, or whether labor has started. Many times, a nurse performs these checks, communicates with a doctor, then discharges the patient—and no bill is generated. An on-site laborist can see the same patients (presumably making for a higher-quality visit for the patient) and, assuming the visit is medically necessary, both a facility and professional charge can be submitted. Revenue from such visits can go a long way toward making up the difference between the total cost of the laborist program and fee collections. This adds to patient safety, as each patient is evaluated in person by a physician rather than only a nurse.

In most settings, the laborist submits a charge for delivery only for unassigned patients. For those patients who “belong to” another OB who provided prenatal care, it is often most practical for that doctor to submit the global fee for prenatal care and delivery, and to pay the laborist program an agreed-upon rate for each service provided.

Compensation

Laborists often are paid an hourly rate, and they typically don’t have a salary component tied to work relative-value unit (wRVU) production or other productivity metrics. Total annual compensation is typically lower than private-practice OBGYN physicians. It also varies widely, depending on local market forces, job description, and workload. Most programs are trying to implement meaningful quality bonuses for laborists.

Scope of Practice

Laborists typically provide care to all unassigned patients who present to labor and delivery, and perform deliveries, C-sections, and other services on patients when requested by OBs in traditional practice. Requests arise when an OB simply needs to be relieved of being on call for their private patients, or when an emergency arises. (These “as-needed” referrals are different from the most common arrangement for “medical hospitalist” practices that ask other doctors to refer all or none of their patients, not just when they are otherwise occupied.)

Lastly, the laborist might serve as surgical assistant to other OBGYNs. In nearly all settings, there is no need to require that any physicians refer to the laborist, and the other OBs are free to decide when to refer.

A reasonably common scenario is that, to avoid disruption of scheduled office hours, an OB in traditional practice might ask that the laborist manage a patient who presents in labor. But if still undelivered at the close of office hours, the traditional OB might assume care from that point on or have the laborist remain responsible through delivery. The traditional OB usually will make post-partum “rounding” visits on all of their patients but could rely on the laborist for these visits.

In most cases, the laborist does not have any scheduled gynecologic procedures, though he or she may see GYN consults throughout the hospital as time permits. Laborists typically have no outpatient responsibilities, but some OBGYN hospitalists cover GYN in the ED.

Operational Structure

Although models vary significantly, the single most common arrangement is for laborists to work 24-hour, in-house shifts. Rarely is there a need or justification to have more than one laborist on at a time. For a single physician, seven or eight 24-hour shifts per month is considered full-time. My experience is that most laborists are employed by the hospital in which they work.

As is the case in every specialty, some large OBGYN groups adopt a rotating laborist model, in which one member of their group becomes the laborist for 24 hours at a time, during which they are relieved of all other responsibilities.

Recruitment

ObGynHospitalist.com shows that, as of July, 40 of the 132 laborist programs that had identified themselves on the site were recruiting. My experience is that unlike “medical hospitalist” practices, which tend to successfully recruit those very early in their career, or “surgical hospitalist” programs, which target mid- to late-career general surgeons, laborist candidates come from any point in their careers. Most programs prefer that a laborist has several years of post-residency experience, but they generally have no other preference.

Dr. Nelson has been a practicing hospitalist since 1988 and is cofounder and past president of SHM. He is a principal in Nelson Flores Hospital Medicine Consultants, a national hospitalist practice management consulting firm (www.nelsonflores.com). He is course codirector and faculty for SHM’s “Best Practices in Managing a Hospital Medicine Program” course. This column represents his views and is not intended to reflect an official position of SHM.

Reference

1. Clark SL, Belfort MA, Dildy GA, Meyers JA. Reducing obstetric litigation through alterations in practice patterns. Obstet Gynecol. 2008;112(6):1279-1283.

Last month (see “Hospital-Focused Practice,” Septem-ber 2011, p. 61), I discussed the adoption of the hospitalist model of practice by many specialties, some of the common issues they face, and highlighted a national meeting to examine this phenomenon (for more information on the meeting, visit www.hospitalmedicine/hfpm). This month, relying mostly on my own experience with this practice model, I’ll drill deeper into OB hospitalists (also known as laborists). While there are a lot of ways in which hospitalist practice in many specialties are the same, laborists differ from those in other fields in important and interesting ways.

Prevalence

One of the most informative sources about the “laborist movement” is ObGynHospitalist.com, a website started and managed by Dr. Rob Olson, an enterprising laborist in Bellingham, Wash. As of July, the site listed 132 laborist programs nationwide (and that figure likely underestimates the actual number in operation). A survey of registered users of the website in April yielded 106 responses, representing a 24% response rate. Seventy-five of the respondents indicated they were full-time laborists.

Unique Drivers

Because obstetric malpractice costs are so high, and many lawsuits are related to delayed response to obstetric emergencies, there is hope (not much hard proof yet) that outcomes will be better, and lawsuits less common or less costly.¹ So the hope of reduced malpractice costs figures more prominently into the cost-benefit analysis of the OB hospitalist model than most other types of HM practice.

Financial Model

It appears that all hospitalist models require financial support over and above professional fee revenue. Hospitals usually are willing (happy?) to provide this money because they can make back even more as a result of increased patient volume/market share or lower costs. And, as is the case for hospitalists in other specialties, laborist presence can be an asset in recruitment and retention of other OBGYNs.

I think the most interesting feature of laborist practice is that in many settings, it has the potential to open new sources of revenue—both hospital “facility fee” and professional fee revenue. A common practice in many hospitals is for obstetricians to send patients, or for them to self-present, to labor and delivery to be checked for a cold, vomiting, or whether labor has started. Many times, a nurse performs these checks, communicates with a doctor, then discharges the patient—and no bill is generated. An on-site laborist can see the same patients (presumably making for a higher-quality visit for the patient) and, assuming the visit is medically necessary, both a facility and professional charge can be submitted. Revenue from such visits can go a long way toward making up the difference between the total cost of the laborist program and fee collections. This adds to patient safety, as each patient is evaluated in person by a physician rather than only a nurse.

In most settings, the laborist submits a charge for delivery only for unassigned patients. For those patients who “belong to” another OB who provided prenatal care, it is often most practical for that doctor to submit the global fee for prenatal care and delivery, and to pay the laborist program an agreed-upon rate for each service provided.

Compensation

Laborists often are paid an hourly rate, and they typically don’t have a salary component tied to work relative-value unit (wRVU) production or other productivity metrics. Total annual compensation is typically lower than private-practice OBGYN physicians. It also varies widely, depending on local market forces, job description, and workload. Most programs are trying to implement meaningful quality bonuses for laborists.

Scope of Practice

Laborists typically provide care to all unassigned patients who present to labor and delivery, and perform deliveries, C-sections, and other services on patients when requested by OBs in traditional practice. Requests arise when an OB simply needs to be relieved of being on call for their private patients, or when an emergency arises. (These “as-needed” referrals are different from the most common arrangement for “medical hospitalist” practices that ask other doctors to refer all or none of their patients, not just when they are otherwise occupied.)

Lastly, the laborist might serve as surgical assistant to other OBGYNs. In nearly all settings, there is no need to require that any physicians refer to the laborist, and the other OBs are free to decide when to refer.

A reasonably common scenario is that, to avoid disruption of scheduled office hours, an OB in traditional practice might ask that the laborist manage a patient who presents in labor. But if still undelivered at the close of office hours, the traditional OB might assume care from that point on or have the laborist remain responsible through delivery. The traditional OB usually will make post-partum “rounding” visits on all of their patients but could rely on the laborist for these visits.

In most cases, the laborist does not have any scheduled gynecologic procedures, though he or she may see GYN consults throughout the hospital as time permits. Laborists typically have no outpatient responsibilities, but some OBGYN hospitalists cover GYN in the ED.

Operational Structure

Although models vary significantly, the single most common arrangement is for laborists to work 24-hour, in-house shifts. Rarely is there a need or justification to have more than one laborist on at a time. For a single physician, seven or eight 24-hour shifts per month is considered full-time. My experience is that most laborists are employed by the hospital in which they work.

As is the case in every specialty, some large OBGYN groups adopt a rotating laborist model, in which one member of their group becomes the laborist for 24 hours at a time, during which they are relieved of all other responsibilities.

Recruitment

ObGynHospitalist.com shows that, as of July, 40 of the 132 laborist programs that had identified themselves on the site were recruiting. My experience is that unlike “medical hospitalist” practices, which tend to successfully recruit those very early in their career, or “surgical hospitalist” programs, which target mid- to late-career general surgeons, laborist candidates come from any point in their careers. Most programs prefer that a laborist has several years of post-residency experience, but they generally have no other preference.

Dr. Nelson has been a practicing hospitalist since 1988 and is cofounder and past president of SHM. He is a principal in Nelson Flores Hospital Medicine Consultants, a national hospitalist practice management consulting firm (www.nelsonflores.com). He is course codirector and faculty for SHM’s “Best Practices in Managing a Hospital Medicine Program” course. This column represents his views and is not intended to reflect an official position of SHM.

Reference

1. Clark SL, Belfort MA, Dildy GA, Meyers JA. Reducing obstetric litigation through alterations in practice patterns. Obstet Gynecol. 2008;112(6):1279-1283.

As regular readers of The Hospitalist are aware, essentially every specialty in medicine is adopting the hospitalist model to some degree. After the “legacy” specialties of medicine and pediatrics, the model has more recently been embraced enthusiastically by neurologists, obstetricians, and general surgeons. But even fields like dermatology and ENT have put a hospitalist version of their specialties in place in at least a few places.

Did you know there is a Society for Dermatology Hospitalists? Did you know that the Neurohospitalist Society has its own journal? Did you know OB hospitalists have a really neat website, and the Society of OB/GYN Hospitalists is scheduled to have its first annual meeting in Boulder, Colo., Sept. 23-25?

It’ll make your head spin if you think about it too long. All of this raises a number of issues, including the need for more precise terminology to describe these fields and their practitioners.

The Need for Better Terminology

For example, now that we have neurohospitalists and psychiatric hospitalists, is it time to start attaching a modifier or prefix every time we use the word “hospitalist,” including when referring to “medical” hospitalists? I don’t think so. For the time being, I propose that when used alone, the word “hospitalist” still refers to a doctor who provides general medical care for adult inpatients. But I think any other use of the word does require a modifier, as in “peds hospitalist” or “GI hospitalist.”

(I think my view makes sense, but then, I’ve tried for years to ensure nocternist, with an E—NOCTernal intERNIST)—is the preferred spelling over nocternist, with a U. But Google returns nine hits for the former and 365,000 for the latter. Looks like I lost that one.)

Terminology for general and trauma surgeons is tricky. There is an emerging field of acute-care surgery, distinct from general surgery, which some argue passionately is nothing like a hospitalist model, and they tend to be offended if one uses the latter term. So, for now, we’ll need to use both “acute-care surgeon” and “surgical hospitalist” carefully. Although there are meaningful distinctions between acute-care surgery and a “standard” general surgery practice devoted to the hospital, there is an awful lot of overlap in the Venn diagrams of their expertise and what they do. But for now, it looks like we should expect both “acute-care surgeon” and “surgical hospitalist” to appear commonly, and the context will determine whether the terms could be used interchangeably.

While “obstetric hospitalist,” or “OB hospitalist,” is a perfectly useful term, I think it is great when laborist is substituted, at least in informal communication.

We still need a way to speak of all of these clinical roles (I don’t think we can properly call them specialties yet). I propose that we refer to all of them as specialties within the realm of “hospital-focused practice.” I’ve borrowed this term from the American Board of Internal Medicine’s Recognition of Focused Practice in Hospital Medicine, the new pathway to Maintenance of Certification.

And what about those doctors in each specialty who continue to practice in the traditional inpatient and outpatient model? Let’s call them “traditionalists.”

Hospital-Focused Practice

A rational vocabulary is only one of many significant issues raised by the growth of hospital-focused disciplines. In January, I participated in an SHM-convened, and AHA-supported, meeting of 11 practitioners who were hospitalists in neurology, obstetrics, general surgery, medicine, pediatrics, and ENT. (Sadly, the invited dermatology hospitalist couldn’t make it.) The meeting was filled with interest and sharing of lessons learned in each field. We discussed questions, and I have provided a very brief answer to each based on the conversation during the meeting and my own work with practices across many different specialties that have adopted the hospitalist model:

What are the reasons each specialty is turning to this model, and what is its prevalence? Hospitalists have appeared in a specialty largely to fill the void left by the traditionalists who no longer want to care for unattached patients admitted through the ED, or who want to leave the hospital altogether for a solely outpatient practice.

What are typical staffing models, night coverage arrangements, and provider career sustainability? These vary a lot by specialty, but laborists typically work 24-hour, in-house shifts. Surgical hospitalists usually work 12-hour shifts if they are in-house all the time, or 24-hour shifts if they take call from home. Neurohospitalists essentially always take call from home (did you even have to ask?).

Career longevity is still a matter of speculation, but the majority of those who have transitioned from traditional to hospitalist practice in their field are convinced they will have a longer career than if they hadn’t made the switch.

What are the effects of this practice model on clinical quality, patient outcomes, healthcare economics, and liability? It will be really difficult to get convincing research data on the quality effects of the hospitalist model in many fields. After more than 15 years in operation, research about the quality effects of the medical hospitalist model is not robust enough to satisfy some. But OB hospitalists may be the exception here. There is hope that their continuous, on-site presence will reduce complications from emergencies, and in doing so might reduce malpractice risk.

What is the prevalent financial model? The experience across a lot of healthcare settings to this point is that professional fee revenue alone usually is not enough to support a hospitalist practice model in any specialty. Just like medical and pediatric hospitalist models, the hospital in which the doctors practice usually provides additional financial support.

Hospitals usually are willing to do this because they are able to reallocate dollars spent paying for numerous specialty doctors to take ED call with poor performance, and instead use those dollars to support a hospitalist practice in that specialty that promises a better return on the investment.

Join us in November for a meeting to understand the implications of hospital-focused practice. Those of us at the January meeting of specialty hospitalists thought that it would be valuable to convene a much larger meeting to think about issues like those above and others. At the Nov. 4 meeting in Las Vegas, we plan to hear from such national figures as CMS’ chief medical officer, physicians practicing in a hospitalist model, and hospital and healthcare executives. The meeting will be structured to promote interaction and communication from attendees.

I hope to see you in Las Vegas. We have a lot to learn from one another.

Dr. Nelson has been a practicing hospitalist since 1988 and is cofounder and past president of SHM. He is a principal in Nelson Flores Hospital Medicine Consultants, a national hospitalist practice management consulting firm (www.nelsonflores.com). He is course codirector and faculty for SHM’s “Best Practices in Managing a Hospital Medicine Program” course. This column represents his views and is not intended to reflect an official position of SHM.

As regular readers of The Hospitalist are aware, essentially every specialty in medicine is adopting the hospitalist model to some degree. After the “legacy” specialties of medicine and pediatrics, the model has more recently been embraced enthusiastically by neurologists, obstetricians, and general surgeons. But even fields like dermatology and ENT have put a hospitalist version of their specialties in place in at least a few places.

Did you know there is a Society for Dermatology Hospitalists? Did you know that the Neurohospitalist Society has its own journal? Did you know OB hospitalists have a really neat website, and the Society of OB/GYN Hospitalists is scheduled to have its first annual meeting in Boulder, Colo., Sept. 23-25?

It’ll make your head spin if you think about it too long. All of this raises a number of issues, including the need for more precise terminology to describe these fields and their practitioners.

The Need for Better Terminology

For example, now that we have neurohospitalists and psychiatric hospitalists, is it time to start attaching a modifier or prefix every time we use the word “hospitalist,” including when referring to “medical” hospitalists? I don’t think so. For the time being, I propose that when used alone, the word “hospitalist” still refers to a doctor who provides general medical care for adult inpatients. But I think any other use of the word does require a modifier, as in “peds hospitalist” or “GI hospitalist.”

(I think my view makes sense, but then, I’ve tried for years to ensure nocternist, with an E—NOCTernal intERNIST)—is the preferred spelling over nocternist, with a U. But Google returns nine hits for the former and 365,000 for the latter. Looks like I lost that one.)

Terminology for general and trauma surgeons is tricky. There is an emerging field of acute-care surgery, distinct from general surgery, which some argue passionately is nothing like a hospitalist model, and they tend to be offended if one uses the latter term. So, for now, we’ll need to use both “acute-care surgeon” and “surgical hospitalist” carefully. Although there are meaningful distinctions between acute-care surgery and a “standard” general surgery practice devoted to the hospital, there is an awful lot of overlap in the Venn diagrams of their expertise and what they do. But for now, it looks like we should expect both “acute-care surgeon” and “surgical hospitalist” to appear commonly, and the context will determine whether the terms could be used interchangeably.

While “obstetric hospitalist,” or “OB hospitalist,” is a perfectly useful term, I think it is great when laborist is substituted, at least in informal communication.

We still need a way to speak of all of these clinical roles (I don’t think we can properly call them specialties yet). I propose that we refer to all of them as specialties within the realm of “hospital-focused practice.” I’ve borrowed this term from the American Board of Internal Medicine’s Recognition of Focused Practice in Hospital Medicine, the new pathway to Maintenance of Certification.

And what about those doctors in each specialty who continue to practice in the traditional inpatient and outpatient model? Let’s call them “traditionalists.”

Hospital-Focused Practice

A rational vocabulary is only one of many significant issues raised by the growth of hospital-focused disciplines. In January, I participated in an SHM-convened, and AHA-supported, meeting of 11 practitioners who were hospitalists in neurology, obstetrics, general surgery, medicine, pediatrics, and ENT. (Sadly, the invited dermatology hospitalist couldn’t make it.) The meeting was filled with interest and sharing of lessons learned in each field. We discussed questions, and I have provided a very brief answer to each based on the conversation during the meeting and my own work with practices across many different specialties that have adopted the hospitalist model:

What are the reasons each specialty is turning to this model, and what is its prevalence? Hospitalists have appeared in a specialty largely to fill the void left by the traditionalists who no longer want to care for unattached patients admitted through the ED, or who want to leave the hospital altogether for a solely outpatient practice.

What are typical staffing models, night coverage arrangements, and provider career sustainability? These vary a lot by specialty, but laborists typically work 24-hour, in-house shifts. Surgical hospitalists usually work 12-hour shifts if they are in-house all the time, or 24-hour shifts if they take call from home. Neurohospitalists essentially always take call from home (did you even have to ask?).

Career longevity is still a matter of speculation, but the majority of those who have transitioned from traditional to hospitalist practice in their field are convinced they will have a longer career than if they hadn’t made the switch.

What are the effects of this practice model on clinical quality, patient outcomes, healthcare economics, and liability? It will be really difficult to get convincing research data on the quality effects of the hospitalist model in many fields. After more than 15 years in operation, research about the quality effects of the medical hospitalist model is not robust enough to satisfy some. But OB hospitalists may be the exception here. There is hope that their continuous, on-site presence will reduce complications from emergencies, and in doing so might reduce malpractice risk.

What is the prevalent financial model? The experience across a lot of healthcare settings to this point is that professional fee revenue alone usually is not enough to support a hospitalist practice model in any specialty. Just like medical and pediatric hospitalist models, the hospital in which the doctors practice usually provides additional financial support.

Hospitals usually are willing to do this because they are able to reallocate dollars spent paying for numerous specialty doctors to take ED call with poor performance, and instead use those dollars to support a hospitalist practice in that specialty that promises a better return on the investment.

Join us in November for a meeting to understand the implications of hospital-focused practice. Those of us at the January meeting of specialty hospitalists thought that it would be valuable to convene a much larger meeting to think about issues like those above and others. At the Nov. 4 meeting in Las Vegas, we plan to hear from such national figures as CMS’ chief medical officer, physicians practicing in a hospitalist model, and hospital and healthcare executives. The meeting will be structured to promote interaction and communication from attendees.

I hope to see you in Las Vegas. We have a lot to learn from one another.

Dr. Nelson has been a practicing hospitalist since 1988 and is cofounder and past president of SHM. He is a principal in Nelson Flores Hospital Medicine Consultants, a national hospitalist practice management consulting firm (www.nelsonflores.com). He is course codirector and faculty for SHM’s “Best Practices in Managing a Hospital Medicine Program” course. This column represents his views and is not intended to reflect an official position of SHM.

As regular readers of The Hospitalist are aware, essentially every specialty in medicine is adopting the hospitalist model to some degree. After the “legacy” specialties of medicine and pediatrics, the model has more recently been embraced enthusiastically by neurologists, obstetricians, and general surgeons. But even fields like dermatology and ENT have put a hospitalist version of their specialties in place in at least a few places.

Did you know there is a Society for Dermatology Hospitalists? Did you know that the Neurohospitalist Society has its own journal? Did you know OB hospitalists have a really neat website, and the Society of OB/GYN Hospitalists is scheduled to have its first annual meeting in Boulder, Colo., Sept. 23-25?

It’ll make your head spin if you think about it too long. All of this raises a number of issues, including the need for more precise terminology to describe these fields and their practitioners.

The Need for Better Terminology

For example, now that we have neurohospitalists and psychiatric hospitalists, is it time to start attaching a modifier or prefix every time we use the word “hospitalist,” including when referring to “medical” hospitalists? I don’t think so. For the time being, I propose that when used alone, the word “hospitalist” still refers to a doctor who provides general medical care for adult inpatients. But I think any other use of the word does require a modifier, as in “peds hospitalist” or “GI hospitalist.”

(I think my view makes sense, but then, I’ve tried for years to ensure nocternist, with an E—NOCTernal intERNIST)—is the preferred spelling over nocternist, with a U. But Google returns nine hits for the former and 365,000 for the latter. Looks like I lost that one.)

Terminology for general and trauma surgeons is tricky. There is an emerging field of acute-care surgery, distinct from general surgery, which some argue passionately is nothing like a hospitalist model, and they tend to be offended if one uses the latter term. So, for now, we’ll need to use both “acute-care surgeon” and “surgical hospitalist” carefully. Although there are meaningful distinctions between acute-care surgery and a “standard” general surgery practice devoted to the hospital, there is an awful lot of overlap in the Venn diagrams of their expertise and what they do. But for now, it looks like we should expect both “acute-care surgeon” and “surgical hospitalist” to appear commonly, and the context will determine whether the terms could be used interchangeably.

While “obstetric hospitalist,” or “OB hospitalist,” is a perfectly useful term, I think it is great when laborist is substituted, at least in informal communication.

We still need a way to speak of all of these clinical roles (I don’t think we can properly call them specialties yet). I propose that we refer to all of them as specialties within the realm of “hospital-focused practice.” I’ve borrowed this term from the American Board of Internal Medicine’s Recognition of Focused Practice in Hospital Medicine, the new pathway to Maintenance of Certification.

And what about those doctors in each specialty who continue to practice in the traditional inpatient and outpatient model? Let’s call them “traditionalists.”

Hospital-Focused Practice

A rational vocabulary is only one of many significant issues raised by the growth of hospital-focused disciplines. In January, I participated in an SHM-convened, and AHA-supported, meeting of 11 practitioners who were hospitalists in neurology, obstetrics, general surgery, medicine, pediatrics, and ENT. (Sadly, the invited dermatology hospitalist couldn’t make it.) The meeting was filled with interest and sharing of lessons learned in each field. We discussed questions, and I have provided a very brief answer to each based on the conversation during the meeting and my own work with practices across many different specialties that have adopted the hospitalist model:

What are the reasons each specialty is turning to this model, and what is its prevalence? Hospitalists have appeared in a specialty largely to fill the void left by the traditionalists who no longer want to care for unattached patients admitted through the ED, or who want to leave the hospital altogether for a solely outpatient practice.

What are typical staffing models, night coverage arrangements, and provider career sustainability? These vary a lot by specialty, but laborists typically work 24-hour, in-house shifts. Surgical hospitalists usually work 12-hour shifts if they are in-house all the time, or 24-hour shifts if they take call from home. Neurohospitalists essentially always take call from home (did you even have to ask?).

Career longevity is still a matter of speculation, but the majority of those who have transitioned from traditional to hospitalist practice in their field are convinced they will have a longer career than if they hadn’t made the switch.

What are the effects of this practice model on clinical quality, patient outcomes, healthcare economics, and liability? It will be really difficult to get convincing research data on the quality effects of the hospitalist model in many fields. After more than 15 years in operation, research about the quality effects of the medical hospitalist model is not robust enough to satisfy some. But OB hospitalists may be the exception here. There is hope that their continuous, on-site presence will reduce complications from emergencies, and in doing so might reduce malpractice risk.

What is the prevalent financial model? The experience across a lot of healthcare settings to this point is that professional fee revenue alone usually is not enough to support a hospitalist practice model in any specialty. Just like medical and pediatric hospitalist models, the hospital in which the doctors practice usually provides additional financial support.

Hospitals usually are willing to do this because they are able to reallocate dollars spent paying for numerous specialty doctors to take ED call with poor performance, and instead use those dollars to support a hospitalist practice in that specialty that promises a better return on the investment.

Join us in November for a meeting to understand the implications of hospital-focused practice. Those of us at the January meeting of specialty hospitalists thought that it would be valuable to convene a much larger meeting to think about issues like those above and others. At the Nov. 4 meeting in Las Vegas, we plan to hear from such national figures as CMS’ chief medical officer, physicians practicing in a hospitalist model, and hospital and healthcare executives. The meeting will be structured to promote interaction and communication from attendees.

I hope to see you in Las Vegas. We have a lot to learn from one another.

Dr. Nelson has been a practicing hospitalist since 1988 and is cofounder and past president of SHM. He is a principal in Nelson Flores Hospital Medicine Consultants, a national hospitalist practice management consulting firm (www.nelsonflores.com). He is course codirector and faculty for SHM’s “Best Practices in Managing a Hospital Medicine Program” course. This column represents his views and is not intended to reflect an official position of SHM.

Many hospitalist practices are started by “traditionalists”: primary-care physicians (PCPs) active in the outpatient and hospital settings. The practice typically grows due in large part to the leadership of the founders. Ultimately, the practice is made up of both the founders and a cadre of part- or full-time hospitalists who don’t work in the outpatient setting. And sometimes they have different incentives and ideas about how the practice should operate.

When these individuals disagree, which group should break the tie—the founding “hybrid” or “rotating” doctors who work part time on the hospitalist service or the doctors who work only as hospitalists?

This is a reasonably common issue for “medical” hospitalist groups, and in many cases is becoming an issue for groups in other specialties that adopt the hospitalist model, such as surgical hospitalists, laborists, etc.

A Common Scenario

Let me illustrate this issue with a composite of several former consulting clients. Let’s say this is a hospitalist practice that serves a 250-bed community hospital. One large private internal medicine group adopted a “rotating hospitalist” model there in the late 1990s. One of the internists provided the daytime hospital coverage for all the group’s patients one week out of every six. Their hospital volume grew quickly. They were asked to take on responsibility for admitting an increasing portion of the unassigned patients, provide care for patients referred by other PCPs who wanted to drop out of hospital work, and increasingly were asked to consult on patients admitted by surgeons.

When faced with this situation, many PCP groups decided to exit the hospital themselves and turn that work over to hospitalists. This group stuck it out. At first, the one doctor in the group covering the hospital each week kept up with the growing volume by simply working harder and longer every day. Eventually, the group sought financial help from the hospital to hire hospitalists who didn’t have outpatient responsibilities.

Years passed, and this PCP group transitioned to employment by the hospital, just like the full-time hospitalists. And by this time, the hospitalist practice was seen as distinct from the original PCP group. About 80% of the staffing was provided by hospitalists who didn’t work in the outpatient setting, the remainder by PCPs who essentially founded the practice. The PCPs chose to continue providing hospital care, both because they found it professionally satisfying and their compensation formula made it attractive for generating production in the hospital.

Tensions arose between the hospitalists and the “hybrids.” The hybrids refused to work night shifts and generally were unable to fill in for unplanned absences by the hospitalists. And because of the PCPs’ compensation formula, and possibly the work ethic of more senior doctors, they favored managing larger patient volumes and decreasing weekend staffing significantly to allow more weekends off in total for everyone. The hospitalists had other ideas about these things, and they were unhappy that the PCPs would have first say about when they could work hospital shifts, thereby decreasing the hospitalists’ scheduling flexibility.

The hospitalists were all within a few years of their residency training, and most of the PCPs were midcareer. This created a social divide, making it that much more difficult for the two groups to work through the issues. While the hybrid doctors saw the hospitalists as good clinicians, and vice versa, each group said: “The other guys are difficult to work with. They don’t understand what it is like for us.”

Need for Paradigm Shift

At many sites, the doctors and their administrative counterparts get stuck in a stalemate and have the same, unhappy conversations repeatedly. These conversations are really gripe sessions more than anything else.

I think the best solution is for everyone to acknowledge the valuable contribution of the hybrid doctors in founding and leading the hospitalist practice through years of growth, but also to begin seeing the hospitalist practice as being owned and governed primarily by the hospitalists who do most of the work. For most issues in which the two factions can’t agree, the hospitalists should have the tie-breaking vote.

While this approach reduces the autonomy of the hybrid doctors to make operational decisions, it doesn’t mean they have zero influence. In fact, the practice usually has a critical need for the hybrid doctors to continue providing some of the staffing. This usually means that the practice will need to ensure it puts together a package of compensation and available shifts on the schedule to ensure the hybrids want to remain active in the practice.

In most cases, all involved should ensure that those hybrid doctors who want to remain active in the hospital, and perform well in the hospitalist practice, should have the opportunity to do so indefinitely.

Compensation Methods for Hybrids

Even if the hybrids and hospitalists are able to harmoniously agree on things like work schedules, the hybrid doctors often have compensation schemes such that when working in the hospital, they have different financial incentives from the hospitalists. (I’m using “hybrid” to describe physicians who work in both inpatient and outpatient settings, usually more time in the office practice.) A common situation is that the production (i.e. wRVUs) generated in the hospital counts toward their office productivity. So the hybrids and the hospitalists will have different ideas about how hard they want to work.

The solution here is to divorce the office and hospital compensation schemes. There should be no connection between the compensation in the two settings, and both should be designed to ensure a competitive amount of money and performance incentives appropriate for that setting. Such methods usually mean that a day of work in the office will result in a different-sized paycheck than what comes with a day of work in the hospital.

Dr. Nelson has been a practicing hospitalist since 1988 and is cofounder and past president of SHM. He is a principal in Nelson Flores Hospital Medicine Consultants, a national hospitalist practice management consulting firm. He is course codirector and faculty for SHM’s “Best Practices in Managing a Hospital Medicine Program” course. This column represents his views and is not intended to reflect an official position of SHM.

Many hospitalist practices are started by “traditionalists”: primary-care physicians (PCPs) active in the outpatient and hospital settings. The practice typically grows due in large part to the leadership of the founders. Ultimately, the practice is made up of both the founders and a cadre of part- or full-time hospitalists who don’t work in the outpatient setting. And sometimes they have different incentives and ideas about how the practice should operate.

When these individuals disagree, which group should break the tie—the founding “hybrid” or “rotating” doctors who work part time on the hospitalist service or the doctors who work only as hospitalists?

This is a reasonably common issue for “medical” hospitalist groups, and in many cases is becoming an issue for groups in other specialties that adopt the hospitalist model, such as surgical hospitalists, laborists, etc.

A Common Scenario

Let me illustrate this issue with a composite of several former consulting clients. Let’s say this is a hospitalist practice that serves a 250-bed community hospital. One large private internal medicine group adopted a “rotating hospitalist” model there in the late 1990s. One of the internists provided the daytime hospital coverage for all the group’s patients one week out of every six. Their hospital volume grew quickly. They were asked to take on responsibility for admitting an increasing portion of the unassigned patients, provide care for patients referred by other PCPs who wanted to drop out of hospital work, and increasingly were asked to consult on patients admitted by surgeons.

When faced with this situation, many PCP groups decided to exit the hospital themselves and turn that work over to hospitalists. This group stuck it out. At first, the one doctor in the group covering the hospital each week kept up with the growing volume by simply working harder and longer every day. Eventually, the group sought financial help from the hospital to hire hospitalists who didn’t have outpatient responsibilities.

Years passed, and this PCP group transitioned to employment by the hospital, just like the full-time hospitalists. And by this time, the hospitalist practice was seen as distinct from the original PCP group. About 80% of the staffing was provided by hospitalists who didn’t work in the outpatient setting, the remainder by PCPs who essentially founded the practice. The PCPs chose to continue providing hospital care, both because they found it professionally satisfying and their compensation formula made it attractive for generating production in the hospital.

Tensions arose between the hospitalists and the “hybrids.” The hybrids refused to work night shifts and generally were unable to fill in for unplanned absences by the hospitalists. And because of the PCPs’ compensation formula, and possibly the work ethic of more senior doctors, they favored managing larger patient volumes and decreasing weekend staffing significantly to allow more weekends off in total for everyone. The hospitalists had other ideas about these things, and they were unhappy that the PCPs would have first say about when they could work hospital shifts, thereby decreasing the hospitalists’ scheduling flexibility.

The hospitalists were all within a few years of their residency training, and most of the PCPs were midcareer. This created a social divide, making it that much more difficult for the two groups to work through the issues. While the hybrid doctors saw the hospitalists as good clinicians, and vice versa, each group said: “The other guys are difficult to work with. They don’t understand what it is like for us.”

Need for Paradigm Shift

At many sites, the doctors and their administrative counterparts get stuck in a stalemate and have the same, unhappy conversations repeatedly. These conversations are really gripe sessions more than anything else.

I think the best solution is for everyone to acknowledge the valuable contribution of the hybrid doctors in founding and leading the hospitalist practice through years of growth, but also to begin seeing the hospitalist practice as being owned and governed primarily by the hospitalists who do most of the work. For most issues in which the two factions can’t agree, the hospitalists should have the tie-breaking vote.

While this approach reduces the autonomy of the hybrid doctors to make operational decisions, it doesn’t mean they have zero influence. In fact, the practice usually has a critical need for the hybrid doctors to continue providing some of the staffing. This usually means that the practice will need to ensure it puts together a package of compensation and available shifts on the schedule to ensure the hybrids want to remain active in the practice.

In most cases, all involved should ensure that those hybrid doctors who want to remain active in the hospital, and perform well in the hospitalist practice, should have the opportunity to do so indefinitely.

Compensation Methods for Hybrids

Even if the hybrids and hospitalists are able to harmoniously agree on things like work schedules, the hybrid doctors often have compensation schemes such that when working in the hospital, they have different financial incentives from the hospitalists. (I’m using “hybrid” to describe physicians who work in both inpatient and outpatient settings, usually more time in the office practice.) A common situation is that the production (i.e. wRVUs) generated in the hospital counts toward their office productivity. So the hybrids and the hospitalists will have different ideas about how hard they want to work.

The solution here is to divorce the office and hospital compensation schemes. There should be no connection between the compensation in the two settings, and both should be designed to ensure a competitive amount of money and performance incentives appropriate for that setting. Such methods usually mean that a day of work in the office will result in a different-sized paycheck than what comes with a day of work in the hospital.

Dr. Nelson has been a practicing hospitalist since 1988 and is cofounder and past president of SHM. He is a principal in Nelson Flores Hospital Medicine Consultants, a national hospitalist practice management consulting firm. He is course codirector and faculty for SHM’s “Best Practices in Managing a Hospital Medicine Program” course. This column represents his views and is not intended to reflect an official position of SHM.

Many hospitalist practices are started by “traditionalists”: primary-care physicians (PCPs) active in the outpatient and hospital settings. The practice typically grows due in large part to the leadership of the founders. Ultimately, the practice is made up of both the founders and a cadre of part- or full-time hospitalists who don’t work in the outpatient setting. And sometimes they have different incentives and ideas about how the practice should operate.

When these individuals disagree, which group should break the tie—the founding “hybrid” or “rotating” doctors who work part time on the hospitalist service or the doctors who work only as hospitalists?

This is a reasonably common issue for “medical” hospitalist groups, and in many cases is becoming an issue for groups in other specialties that adopt the hospitalist model, such as surgical hospitalists, laborists, etc.

A Common Scenario

Let me illustrate this issue with a composite of several former consulting clients. Let’s say this is a hospitalist practice that serves a 250-bed community hospital. One large private internal medicine group adopted a “rotating hospitalist” model there in the late 1990s. One of the internists provided the daytime hospital coverage for all the group’s patients one week out of every six. Their hospital volume grew quickly. They were asked to take on responsibility for admitting an increasing portion of the unassigned patients, provide care for patients referred by other PCPs who wanted to drop out of hospital work, and increasingly were asked to consult on patients admitted by surgeons.

When faced with this situation, many PCP groups decided to exit the hospital themselves and turn that work over to hospitalists. This group stuck it out. At first, the one doctor in the group covering the hospital each week kept up with the growing volume by simply working harder and longer every day. Eventually, the group sought financial help from the hospital to hire hospitalists who didn’t have outpatient responsibilities.

Years passed, and this PCP group transitioned to employment by the hospital, just like the full-time hospitalists. And by this time, the hospitalist practice was seen as distinct from the original PCP group. About 80% of the staffing was provided by hospitalists who didn’t work in the outpatient setting, the remainder by PCPs who essentially founded the practice. The PCPs chose to continue providing hospital care, both because they found it professionally satisfying and their compensation formula made it attractive for generating production in the hospital.

Tensions arose between the hospitalists and the “hybrids.” The hybrids refused to work night shifts and generally were unable to fill in for unplanned absences by the hospitalists. And because of the PCPs’ compensation formula, and possibly the work ethic of more senior doctors, they favored managing larger patient volumes and decreasing weekend staffing significantly to allow more weekends off in total for everyone. The hospitalists had other ideas about these things, and they were unhappy that the PCPs would have first say about when they could work hospital shifts, thereby decreasing the hospitalists’ scheduling flexibility.

The hospitalists were all within a few years of their residency training, and most of the PCPs were midcareer. This created a social divide, making it that much more difficult for the two groups to work through the issues. While the hybrid doctors saw the hospitalists as good clinicians, and vice versa, each group said: “The other guys are difficult to work with. They don’t understand what it is like for us.”

Need for Paradigm Shift

At many sites, the doctors and their administrative counterparts get stuck in a stalemate and have the same, unhappy conversations repeatedly. These conversations are really gripe sessions more than anything else.

I think the best solution is for everyone to acknowledge the valuable contribution of the hybrid doctors in founding and leading the hospitalist practice through years of growth, but also to begin seeing the hospitalist practice as being owned and governed primarily by the hospitalists who do most of the work. For most issues in which the two factions can’t agree, the hospitalists should have the tie-breaking vote.

While this approach reduces the autonomy of the hybrid doctors to make operational decisions, it doesn’t mean they have zero influence. In fact, the practice usually has a critical need for the hybrid doctors to continue providing some of the staffing. This usually means that the practice will need to ensure it puts together a package of compensation and available shifts on the schedule to ensure the hybrids want to remain active in the practice.

In most cases, all involved should ensure that those hybrid doctors who want to remain active in the hospital, and perform well in the hospitalist practice, should have the opportunity to do so indefinitely.

Compensation Methods for Hybrids

Even if the hybrids and hospitalists are able to harmoniously agree on things like work schedules, the hybrid doctors often have compensation schemes such that when working in the hospital, they have different financial incentives from the hospitalists. (I’m using “hybrid” to describe physicians who work in both inpatient and outpatient settings, usually more time in the office practice.) A common situation is that the production (i.e. wRVUs) generated in the hospital counts toward their office productivity. So the hybrids and the hospitalists will have different ideas about how hard they want to work.

The solution here is to divorce the office and hospital compensation schemes. There should be no connection between the compensation in the two settings, and both should be designed to ensure a competitive amount of money and performance incentives appropriate for that setting. Such methods usually mean that a day of work in the office will result in a different-sized paycheck than what comes with a day of work in the hospital.

Dr. Nelson has been a practicing hospitalist since 1988 and is cofounder and past president of SHM. He is a principal in Nelson Flores Hospital Medicine Consultants, a national hospitalist practice management consulting firm. He is course codirector and faculty for SHM’s “Best Practices in Managing a Hospital Medicine Program” course. This column represents his views and is not intended to reflect an official position of SHM.

HM11 and the publication of the SHM-MGMA survey on hospitalist productivity and compensation occur every summer, and they always provide lots of new information to get me thinking. Two things stand out this year: Hospitalist demand remains high, and hospitals are paying a lot to have hospitalist services.

Supply and Demand

Along with SHM President Joe Li and Rob Bessler, who is CEO of Sound Physicians, I had the pleasure of presenting a preview of some data from the latest SHM-MGMA survey at the annual meeting May 11 in Dallas. During the session, I asked the large crowd of hospitalists how many were from practices that are actively recruiting additional hospitalists. About 40% of the hands went up.

If 40% of HM groups are actively recruiting, some for more than one open position, that’s a lot of recruiting. But it is dramatically less than the response I got when I asked the same question just three years ago at HM08 in San Diego. At that meeting, nearly every hand in the room went up, indicating everybody was recruiting (see “We’re Hiring,” July 2008, p. 62).

Of course, my show-of-hands survey of attendees at SHM meetings is not a perfect method to assess hospitalist supply and demand. But I think the dramatic change in responses from 2008 to 2011 is meaningful; it also matches what I’m seeing in the marketplace. I hear repeatedly that the years of rapid growth in hospitalist staffing have ended in many or most major metropolitan areas. For example, in places like Seattle (where I practice), Minneapolis, and Boston, there are far fewer open positions now than just two years ago, and most are to replace a departing doctor rather than to increase the overall staffing level.

But the far more numerous smaller markets are still recruiting aggressively in an effort to increase the overall staffing of the practice (and not just replace departing doctors). And changes in resident work-hour limitations are requiring teaching hospitals to increase hospitalist staffing to offset the reduction in resident availability. But it’s possible that if the larger markets are indeed becoming somewhat saturated with hospitalists, then there will be a trickledown effect, which should make more candidates available everywhere.

What will be the side effects if indeed the supply of hospitalists catches up to the demand, or even exceeds demand, in some places? It is easy to imagine that greater competition among candidates might mean that practices are increasingly able to hire the more talented and committed doctors, which should improve the overall performance of hospitalist practices.

Although I don’t have proof, I think this phenomenon has been in play in the field of emergency medicine for many years. When I was a resident in the 1980s, ED doctors typically were not the best and brightest at their hospitals. But the way I see it, the field began to attract better candidates, and as ED residencies and practices began to “fill up,” they could be more selective in new hires. Therefore, the average talent of the average ED doctor went up.

I think the average hospitalist today is pretty talented, but I also think it could get even better if the supply of hospitalists exceeds demand. I just hope I continue to make the cut!

If typical market forces are operative for hospitalists (far from a guarantee in any healthcare enterprise), then an oversupply of hospitalists could mean a flattening of the historical trend in hospitalist incomes. To this point, in our relatively young field, incomes have risen faster than can be explained solely by inflation or increases in hospitalist productivity. A relative shortage of hospitalists might be one of the main forces pushing incomes up, and it might go away.

We’ll see.

Hospital Support Trends Up

The most remarkable number in the 2011 SHM-MGMA survey is the financial support provided to practices per FTE hospitalist annually. This support nearly always comes from a hospital, and is often colloquially, and misleadingly, referred to as the “subsidy.”

In 2001, hospital support was about $65,000 per FTE. In the 2008 and 2010 surveys, the median financial support per FTE was $97,000 and $98,000, respectively. But it jumped to $136,403 this year. That is a really huge jump in one year. (Note: The surveys changed from biannual to annual in 2010, and the new SHM-MGMA survey uses a different financial support question/methodology and has a different respondent pool than the previous SHM surveys.)

Some of the increased dollars probably went to pay rising hospitalist compensation, which rose about 3% over the prior year without any significant increase in productivity. But that 3% salary increase translates to only about $5,000 (median compensation rose from roughly $215,000 to $220,000), and could be explained in part by such factors as removing academicians from this data set. (Starting in 2010, academic hospitalists are surveyed and reported separately, so aren’t included here.) So I don’t think the change in hospitalist incomes seen in this survey has much to do with the dramatic, near-40% increase in financial support.

The survey showed that hospitalist productivity hasn’t declined, so the other most likely culprit is declining professional fee collections, which might be due to an increasing portion of hospitalized patients who are uninsured or underinsured. Many hospitals report that their “payor mix” has worsened since the economic crisis of the last few years. And because hospitals typically hold the risk for the financial performance of their hospitalists, then if the latter see more uninsured patients and collect less in professional fees, the hospital will make up the difference. This phenomenon might explain much of the increased financial support.

But I’m not satisfied that a worsening payor mix explains everything. For example, if this were the most significant reason for increasing financial support, I think we would have seen this effect in the prior survey. Why did it “hit” so suddenly in this year alone?

We will get more information about collection rates when the second part of the survey is published in September. For example, we’ll be able to compare the dollars collected per encounter or per wRVU in the current survey to the prior one. If there was a significant drop, then it will require only a little math to see how much overall collections dropped per FTE and see if it is similar to the rise in financial support provided.

Of course, it will be very informative to see what the financial support turns out to be in the next survey (check back in late spring 2012). Will it stay around $136,000 per FTE or be something very different? TH

Dr. Nelson has been a practicing hospitalist since 1988 and is co-founder and past president of SHM. He is a principal in Nelson Flores Hospital Medicine Consultants, a national hospitalist practice management consulting firm (www.nelsonflores.com). He is course co-director and faculty for SHM’s “Best Practices in Managing a Hospital Medicine Program” course. This column represents his views and is not intended to reflect an official position of SHM.

HM11 and the publication of the SHM-MGMA survey on hospitalist productivity and compensation occur every summer, and they always provide lots of new information to get me thinking. Two things stand out this year: Hospitalist demand remains high, and hospitals are paying a lot to have hospitalist services.

Supply and Demand

Along with SHM President Joe Li and Rob Bessler, who is CEO of Sound Physicians, I had the pleasure of presenting a preview of some data from the latest SHM-MGMA survey at the annual meeting May 11 in Dallas. During the session, I asked the large crowd of hospitalists how many were from practices that are actively recruiting additional hospitalists. About 40% of the hands went up.

If 40% of HM groups are actively recruiting, some for more than one open position, that’s a lot of recruiting. But it is dramatically less than the response I got when I asked the same question just three years ago at HM08 in San Diego. At that meeting, nearly every hand in the room went up, indicating everybody was recruiting (see “We’re Hiring,” July 2008, p. 62).

Of course, my show-of-hands survey of attendees at SHM meetings is not a perfect method to assess hospitalist supply and demand. But I think the dramatic change in responses from 2008 to 2011 is meaningful; it also matches what I’m seeing in the marketplace. I hear repeatedly that the years of rapid growth in hospitalist staffing have ended in many or most major metropolitan areas. For example, in places like Seattle (where I practice), Minneapolis, and Boston, there are far fewer open positions now than just two years ago, and most are to replace a departing doctor rather than to increase the overall staffing level.

But the far more numerous smaller markets are still recruiting aggressively in an effort to increase the overall staffing of the practice (and not just replace departing doctors). And changes in resident work-hour limitations are requiring teaching hospitals to increase hospitalist staffing to offset the reduction in resident availability. But it’s possible that if the larger markets are indeed becoming somewhat saturated with hospitalists, then there will be a trickledown effect, which should make more candidates available everywhere.

What will be the side effects if indeed the supply of hospitalists catches up to the demand, or even exceeds demand, in some places? It is easy to imagine that greater competition among candidates might mean that practices are increasingly able to hire the more talented and committed doctors, which should improve the overall performance of hospitalist practices.

Although I don’t have proof, I think this phenomenon has been in play in the field of emergency medicine for many years. When I was a resident in the 1980s, ED doctors typically were not the best and brightest at their hospitals. But the way I see it, the field began to attract better candidates, and as ED residencies and practices began to “fill up,” they could be more selective in new hires. Therefore, the average talent of the average ED doctor went up.

I think the average hospitalist today is pretty talented, but I also think it could get even better if the supply of hospitalists exceeds demand. I just hope I continue to make the cut!

If typical market forces are operative for hospitalists (far from a guarantee in any healthcare enterprise), then an oversupply of hospitalists could mean a flattening of the historical trend in hospitalist incomes. To this point, in our relatively young field, incomes have risen faster than can be explained solely by inflation or increases in hospitalist productivity. A relative shortage of hospitalists might be one of the main forces pushing incomes up, and it might go away.

We’ll see.

Hospital Support Trends Up

The most remarkable number in the 2011 SHM-MGMA survey is the financial support provided to practices per FTE hospitalist annually. This support nearly always comes from a hospital, and is often colloquially, and misleadingly, referred to as the “subsidy.”

In 2001, hospital support was about $65,000 per FTE. In the 2008 and 2010 surveys, the median financial support per FTE was $97,000 and $98,000, respectively. But it jumped to $136,403 this year. That is a really huge jump in one year. (Note: The surveys changed from biannual to annual in 2010, and the new SHM-MGMA survey uses a different financial support question/methodology and has a different respondent pool than the previous SHM surveys.)

Some of the increased dollars probably went to pay rising hospitalist compensation, which rose about 3% over the prior year without any significant increase in productivity. But that 3% salary increase translates to only about $5,000 (median compensation rose from roughly $215,000 to $220,000), and could be explained in part by such factors as removing academicians from this data set. (Starting in 2010, academic hospitalists are surveyed and reported separately, so aren’t included here.) So I don’t think the change in hospitalist incomes seen in this survey has much to do with the dramatic, near-40% increase in financial support.

The survey showed that hospitalist productivity hasn’t declined, so the other most likely culprit is declining professional fee collections, which might be due to an increasing portion of hospitalized patients who are uninsured or underinsured. Many hospitals report that their “payor mix” has worsened since the economic crisis of the last few years. And because hospitals typically hold the risk for the financial performance of their hospitalists, then if the latter see more uninsured patients and collect less in professional fees, the hospital will make up the difference. This phenomenon might explain much of the increased financial support.

But I’m not satisfied that a worsening payor mix explains everything. For example, if this were the most significant reason for increasing financial support, I think we would have seen this effect in the prior survey. Why did it “hit” so suddenly in this year alone?

We will get more information about collection rates when the second part of the survey is published in September. For example, we’ll be able to compare the dollars collected per encounter or per wRVU in the current survey to the prior one. If there was a significant drop, then it will require only a little math to see how much overall collections dropped per FTE and see if it is similar to the rise in financial support provided.

Of course, it will be very informative to see what the financial support turns out to be in the next survey (check back in late spring 2012). Will it stay around $136,000 per FTE or be something very different? TH

Dr. Nelson has been a practicing hospitalist since 1988 and is co-founder and past president of SHM. He is a principal in Nelson Flores Hospital Medicine Consultants, a national hospitalist practice management consulting firm (www.nelsonflores.com). He is course co-director and faculty for SHM’s “Best Practices in Managing a Hospital Medicine Program” course. This column represents his views and is not intended to reflect an official position of SHM.

HM11 and the publication of the SHM-MGMA survey on hospitalist productivity and compensation occur every summer, and they always provide lots of new information to get me thinking. Two things stand out this year: Hospitalist demand remains high, and hospitals are paying a lot to have hospitalist services.

Supply and Demand

Along with SHM President Joe Li and Rob Bessler, who is CEO of Sound Physicians, I had the pleasure of presenting a preview of some data from the latest SHM-MGMA survey at the annual meeting May 11 in Dallas. During the session, I asked the large crowd of hospitalists how many were from practices that are actively recruiting additional hospitalists. About 40% of the hands went up.

If 40% of HM groups are actively recruiting, some for more than one open position, that’s a lot of recruiting. But it is dramatically less than the response I got when I asked the same question just three years ago at HM08 in San Diego. At that meeting, nearly every hand in the room went up, indicating everybody was recruiting (see “We’re Hiring,” July 2008, p. 62).

Of course, my show-of-hands survey of attendees at SHM meetings is not a perfect method to assess hospitalist supply and demand. But I think the dramatic change in responses from 2008 to 2011 is meaningful; it also matches what I’m seeing in the marketplace. I hear repeatedly that the years of rapid growth in hospitalist staffing have ended in many or most major metropolitan areas. For example, in places like Seattle (where I practice), Minneapolis, and Boston, there are far fewer open positions now than just two years ago, and most are to replace a departing doctor rather than to increase the overall staffing level.

But the far more numerous smaller markets are still recruiting aggressively in an effort to increase the overall staffing of the practice (and not just replace departing doctors). And changes in resident work-hour limitations are requiring teaching hospitals to increase hospitalist staffing to offset the reduction in resident availability. But it’s possible that if the larger markets are indeed becoming somewhat saturated with hospitalists, then there will be a trickledown effect, which should make more candidates available everywhere.

What will be the side effects if indeed the supply of hospitalists catches up to the demand, or even exceeds demand, in some places? It is easy to imagine that greater competition among candidates might mean that practices are increasingly able to hire the more talented and committed doctors, which should improve the overall performance of hospitalist practices.

Although I don’t have proof, I think this phenomenon has been in play in the field of emergency medicine for many years. When I was a resident in the 1980s, ED doctors typically were not the best and brightest at their hospitals. But the way I see it, the field began to attract better candidates, and as ED residencies and practices began to “fill up,” they could be more selective in new hires. Therefore, the average talent of the average ED doctor went up.

I think the average hospitalist today is pretty talented, but I also think it could get even better if the supply of hospitalists exceeds demand. I just hope I continue to make the cut!

If typical market forces are operative for hospitalists (far from a guarantee in any healthcare enterprise), then an oversupply of hospitalists could mean a flattening of the historical trend in hospitalist incomes. To this point, in our relatively young field, incomes have risen faster than can be explained solely by inflation or increases in hospitalist productivity. A relative shortage of hospitalists might be one of the main forces pushing incomes up, and it might go away.

We’ll see.

Hospital Support Trends Up

The most remarkable number in the 2011 SHM-MGMA survey is the financial support provided to practices per FTE hospitalist annually. This support nearly always comes from a hospital, and is often colloquially, and misleadingly, referred to as the “subsidy.”

In 2001, hospital support was about $65,000 per FTE. In the 2008 and 2010 surveys, the median financial support per FTE was $97,000 and $98,000, respectively. But it jumped to $136,403 this year. That is a really huge jump in one year. (Note: The surveys changed from biannual to annual in 2010, and the new SHM-MGMA survey uses a different financial support question/methodology and has a different respondent pool than the previous SHM surveys.)

Some of the increased dollars probably went to pay rising hospitalist compensation, which rose about 3% over the prior year without any significant increase in productivity. But that 3% salary increase translates to only about $5,000 (median compensation rose from roughly $215,000 to $220,000), and could be explained in part by such factors as removing academicians from this data set. (Starting in 2010, academic hospitalists are surveyed and reported separately, so aren’t included here.) So I don’t think the change in hospitalist incomes seen in this survey has much to do with the dramatic, near-40% increase in financial support.

The survey showed that hospitalist productivity hasn’t declined, so the other most likely culprit is declining professional fee collections, which might be due to an increasing portion of hospitalized patients who are uninsured or underinsured. Many hospitals report that their “payor mix” has worsened since the economic crisis of the last few years. And because hospitals typically hold the risk for the financial performance of their hospitalists, then if the latter see more uninsured patients and collect less in professional fees, the hospital will make up the difference. This phenomenon might explain much of the increased financial support.

But I’m not satisfied that a worsening payor mix explains everything. For example, if this were the most significant reason for increasing financial support, I think we would have seen this effect in the prior survey. Why did it “hit” so suddenly in this year alone?

We will get more information about collection rates when the second part of the survey is published in September. For example, we’ll be able to compare the dollars collected per encounter or per wRVU in the current survey to the prior one. If there was a significant drop, then it will require only a little math to see how much overall collections dropped per FTE and see if it is similar to the rise in financial support provided.

Of course, it will be very informative to see what the financial support turns out to be in the next survey (check back in late spring 2012). Will it stay around $136,000 per FTE or be something very different? TH

Dr. Nelson has been a practicing hospitalist since 1988 and is co-founder and past president of SHM. He is a principal in Nelson Flores Hospital Medicine Consultants, a national hospitalist practice management consulting firm (www.nelsonflores.com). He is course co-director and faculty for SHM’s “Best Practices in Managing a Hospital Medicine Program” course. This column represents his views and is not intended to reflect an official position of SHM.