Should ‘hospitalists’ be part of your PFC redesign?

Advocates claim cost savings, improved care

A new breed of physician is popping up in hospitals, and it may affect the way you redesign your care delivery model.

These physicians, called hospitalists, specialize in inpatient care. Unlike the traditional hospital intensivists who manage acute care inpatients as well as their own private practice, the hospitalist works exclusively within the hospital.

Advocates hail these specialists, who have polished their skills in treating a specific patient population, as the future of cost-effective, high-quality hospital care. But critics argue that a hospitalists’ skills are no replacement for the personal knowledge of a patient’s needs that can only be provided by a personal physician.

There are no data yet to support either view because use of hospitalists is so new. Recently, though, raw data on length of stay and cost per case for five DRGs were gathered by Winthrop Whitcomb, MD, who established a seven-doctor hospitalist group in Springfield, MA. He says the evidence, although preliminary, indicates how fledgling hospitalist programs can improve a hospital’s bottom line.

"The program has demonstrably improved quality of care at Mercy Hospital," Whitcomb says. (See bar graphs showing raw data on length of stay and cost per case, at right. The figures compare Whitcomb’s hospitalist group with the rest of Mercy Hospital’s medical staff. The data have not been adjusted for severity of illness.)

With such controversy and inadequate information about outcomes, should you consider adding a hospitalist? Here’s what some administrators who have implemented hospitalist programs have to say:

John R. Nelson, MD, an internist and hospitalist in Gainesville, FL, started his hospitalist group practice, Inpatient Medical Services, in 1988. He says hospitalist programs improve quality of care because, simply put, the more you do something, the better you get at it. Hospitalists treat high volumes of exclusively inpatient-type medical problems, so they possess sound clinical skills in the management of acute illness. An internist with an office practice may follow 100 patients a year in the hospital; a hospitalist may see that many in a week.

A hospitalized, acutely ill patient benefits from being seen by a doctor who sees problems of that type all the time and knows the ins and outs of moving a patient through the hospital efficiently.

"If a patient has sepsis, for example, he’s better off seeing a hospitalist who’s treated many patients with that condition over the past year, as opposed to being seen by a primary care doctor in a traditional practice who may have treated only one that year," Nelson explains.

Nelson adds that the system benefits patients and facility alike, because the doctor in control decides what resources are consumed. He says hospitalists deviate from standards less than their colleagues in office practice, so they become highly skilled in utilization management. They generally manage laboratories aggressively, ordering fewer, yet more precise tests than their colleagues in more traditional practices.

"Hospitalists give good medical care in a cost-effective manner," Nelson explains. "The fees charged by Inpatient Medical Services tend to be slightly lower than those of internists in traditional practice in this part of the country — our overhead is lower — but that has little to do with the cost-effectiveness of the hospitalist. You have to whittle down utilization of hospital resources, not doctors’ fees, to save real money.

"Even though 20%, for example, is a significant fee discount, the bill for a five-day hospital stay is going to be in the thousands," he explains. "A 20% fee discount may save $80, but eliminating one CT scan saves $600. In addition, length of stay is decreased with the patient going home half a day earlier. All this adds up to cost savings because the hospital can charge the full DRG without consuming as many resources as expected."

At the end of the day, the health care network saves that money by negotiating with the hospital for lower rates.

A growing hybrid model

Park Nicollet Medical Group in Minneapolis is a large multispecialty practice that utilizes a hybrid hospitalist model — two full-time hospitalists complemented by rotating general internists and family physicians.

"We looked at cost and found that we were able to reduce our number of consultations to specialty services by about 20%," says Thomas Schmidt, MD, internist and administrator of the Park Nicollet group. "Patients are better served because a hospitalist is in the hospital 24 hours a day. Care is not turned over to one specialist or another who may be in the hospital half that time.

"Here’s another thing we saw happening," continues Schmidt. "Before the hospitalist service came into effect, we had a large number of specialists who were rendering primary care to their patients by virtue of their disease processes. We’d have pulmonologists, for example, who were the primary caregivers for people with chronic obstructive pulmonary disease. When the hospitalist program got going, specialists began referring their patients to hospitalists for primary care, reserving their time for consultations."

As a result, Park Nicollet’s initial estimates of the staffing needed to run their hospitalist program were too low. "We thought we could manage our population of patients with two hospital services," says Schmidt. "We’ve grown now to five, and will need a sixth by this summer."

Hospitalists must keep primary docs informed

To address concerns about continuity of care and any feeling of fragmentation patients may experience when being passed from the physician they saw in the office to a hospitalist, Park Nicollet stresses communication. The hospitalist, the patient, and the office-based physicians remain in constant contact. (See related article on continuity of care, p. 79.)

"The difficult part for us," Schmidt says, "has been to convince patients that their primary doc is involved with their care even though they’re not physically managing their care. We’ve addressed that problem by making sure the hospitalists keep the patients’ primary docs continually apprised of their progress. In addition, we encourage the original physicians to do social rounds."

While the hospital administrators liked the hospitalist program, the more important issue is whether patients liked it. To find out, Park Nicollet conducted a survey.

The hospital had baseline patient satisfaction data on a system in which internists hospitalized their own patients and did inpatient care themselves. The hospital surveyed hospitalist-treated patients to see how their level of satisfaction compared to the internist-treated patients.

"We found no change," Schmidt says. "That can be interpreted as a lack of improvement, but on a more positive note, it’s also an indication that our hospitalist system is as satisfactory as the traditional system."

Is the hospitalist program good for Park Nicollet?

"On balance, the outcome is good," says Schmidt, "but the outpatient primary care physician has a huge responsibility. It takes due diligence on the part of a patient’s original primary care doctor to maintain contact with the hospitalist and with his patient."

"We created our hospitalist program three or four years ago," says Tim Rearick, administrator and director of business development for Shands at AGH Hospital in Gainesville, FL. "At the time, physicians from three rural hospitals were having difficulty getting their patients taken care of. We needed internists who could admit medical transfers, take care of those patients in the hospital, then discharge them back to the referring physicians. The hospital hired three physicians to fulfill that need."

Shands overestimated the demand on the new hires, so at first the program was not cost-effective.

"That soon changed, however," Rearick adds. "We came to realize that our hospitalists were treating patients more efficiently than were physicians with outside practices. The in-hospital practitioners were here all the time; office practices didn’t interfere with their availability. And they were very good at what they did. On a gross basis — gross average charge per DRG — they were working more cost-effectively than physicians in traditional practices.

"So much so, in fact, that we asked them to teach efficiencies to our other physicians. When we implemented clinical pathways last year, the hospitalists were our advocates with the rest of the medical staff. We didn’t have a director of quality management at that point. Today we do, and we plan on asking our quality personnel to work alongside our hospitalist group to evaluate quality issues."

John C. McDonald, RN, vice president of clinical services for Physicians’ Community Health, a large independent practice association in Brentwood, TN, says his organization is not quite ready for a hospitalist program, but it’s definitely headed in that direction.

"Once we institute the program," McDonald says, "quality and utilization of care will be improved because there will be less variation in the patient flow process. Instead of lots of doctors being a part of the process and each having their own way of doing things, there will be one or two who are familiar with protocols and know the problem areas. That level of care works."