Incorporating hospitalists into your practice

By Jessica A. Ellel, Esq.

The past decade has seen a dramatic increase in the number of hospitalists providing patient care across the United States. The Society of Hospital Medicine (SHM) estimates that 20,000 hospitalists are currently in practice. In light of this tremendous increase, hospitals have increased their desire to incorporate hospitalists into their medical staffs and many physician practices are investigating ways to incorporate these unique practitioners into their practices.

The term hospitalist was first coined by Dr. Robert Wachter in a New England Journal of Medicine article from August 1996. SHM defines a hospitalist as a physician whose practice emphasizes providing care for hospitalized patients. A 2005 article in The Hospitalist by Dr. Aman D. Sabharwal elaborated on a subspecialty of hospitalists – nocturnists who provide hospitalist services at night. Nocturnists combine with general hospitalists to ensure the provision of round-the-clock physician care to hospital patients.

Although most hospitalists come to this role after training as general internal medicine physicians, hospitalists may have received prior training in a number of other relevant specialties in family practice, pediatrics, pulmonology and critical care. By specializing in the needs of hospitalized patients, the hospitalist gains a unique perspective on the care of these patients. Furthermore, while most office-based physicians may only round in a hospital once or twice per day, the hospitalist can be readily available to the patient. This availability is generally associated with higher patient satisfaction and studies suggest the increased availability may also correlate with shorter hospital stays. A recent article in the New England Journal of Medicine found that patients cared for by hospitalists had a modestly shorter hospital stay and lower costs but a similar inpatient rate of death and 14-day readmission rate, as compared with patients cared for by general internists of family physicians. Timely response is a portion of these shorter stays, but another reason is more practical – a hospitalist may discharge a patient whenever the patient is ready. Without hospitalist care, the patient may have to wait up to an additional day for their primary physician to return to the hospital to sign the discharge paperwork.

Hospitalists may be employed pursuant to several different employment models. Many hospitalists are employed directly by hospitals or academic institutions where they work. Other hospitalists are employed by private physician practices who contract with local hospitals and academic centers to provide some or all of their physicians’ rosters to these institutions to serve as hospitalists. Regardless of whether the hospitalist is coming to the hospital through the direct employment of the individual by a hospital, or by contract between a hospital and a private physician group, these contracts will need to address a number of common concerns: scheduling, job functions and compensation.

Scheduling

The regular schedule worked by most hospitalists is generally considered an advantage to choosing a hospitalist career path. Hospitalists tend to work alternating weeks, with the working week featuring a series of twelve-hour shifts over each of the seven days. Utilizing this schedule, a four-physician rotation of hospitalists, including two nocturnists, could provide complete coverage. Private physician practices seeking to develop a hospitalist practice will need to communicate with the hospitals that will be serviced to determine the staffing levels which will be expected, and hire enough hospitalists and nocturnists to satisfy the hospitalists needs at different scheduled times.

Although the predictability of schedule is seen as an advantage that is commonly cited by those advocating for the increased use of hospitalists, some in the industry worry that the intense seven-day work week will ultimately lead to physician burnout. This trend will need to be watched closely as the use of hospitalists increases.

Job Function

Hospitalists are called upon to provide a variety of job functions in the hospital setting. SHM’s annual survey for 2007-2008 provides that 73.6 percent of hospitalist-patient encounters involve admissions, follow-up visits and discharges. Physicians may also be called upon to provide consultations, observation days and critical care procedures. The scope of job functions to be performed by the hospitalists will generally be determined by the contract between either the hospital and the hospitalist directly or between the hospital and the private physician group supplying the hospitalists.

In addition to those job functions discussed above, hospitals may wish to utilize hospitalists in leadership positions on the hospitals’ medical staffs. This may be especially true where the hospitalist is employed directly by the hospital. Although many hospitalists did not respond to this particular question, SHM’s annual survey for 2007-2008 found that administrative activities related to participation in medical staff leadership activities could make up an average of 20 percent of a hospitalist’s working time.

Compensation

Hospitalists are compensated on either a salary basis, a productivity basis or a hybrid method that incorporates both salary and productivity or other bonus compensation. Determining the best method of calculating a hospitalist’s productivity may be complicated. The main source of this complication is that hospitalists, and nocturnists in particular, may have significantly fewer patient encounters than other physicians in private practice. In addition, the reimbursement levels for the types of physician encounters performed by hospitalists tend to have lower reimbursement rates than the high-reimbursement procedures performed by office-based physicians and specialists. Therefore, it is difficult to fairly compensate a hospitalist’s productivity under most commonly-used productivity formulas. Hospitalists also fail to easily align with most standard productivity-based compensation formulas because their overhead is dramatically different from office-based physicians as the practice occurs almost exclusively on the hospital’s premises.

SHM acknowledges that most hospitalist programs operate on a deficit. Hospitals generally take a loss when employing hospitalists directly. When contracting with private physician groups to supply hospitalists to the institutions, hospitals generally pay support subsidies to the private physician groups to make up for the shortfall between the revenues brought in by the hospitalist’s reimbursements and the costs to the private physician groups for retaining and compensating its hospitalist employees.

Based on these deficits, it has been suggested that hospitalists be compensated on a hybrid method that incorporates a base salary and also provides bonus compensation based on the quality of work provided by the hospitalist. This method was advocated by Dr. Ronaldo Greeno, chief medical officer of Cogent Healthcare, Inc., as being consistent with the current direction of the health care industry and the needs of the hospitals. So far, however, this methodology has not been pursued on a widespread basis.

As the prevalence of hospitalists increases, many private physician practices may find the inclusion of hospitalists as a way to supplement their practice. It is too soon, however, to determine whether the use of hospitalists will be a long-term success or simply another passing trend.

Jessica A. Ellel, Esq., is a Senior Associate with Houston Harbaugh, PC, in Pittsburgh, Pa.

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