Home Uncategorized Industry think tank: Today’s boom times could be tomorrow’s crisis

Industry think tank: Today’s boom times could be tomorrow’s crisis

August 2007

Published in the August 2007 issue of Today’s Hospitalist.

In these heady times for hospital medicine, conversations about the specialty often focus on its meteoric growth. As hospitalists help improve quality while lowering costs at the nation’s hospitals, demand is insatiable and salaries are on the rise.

Talk to hospital medicine leaders from the nation’s large private-practice groups, however, and you’ll hear a drastically different story. The booming specialty may be good news for individual physicians, but it is creating major headaches for hospitalist groups in the trenches of the nation’s hospitals.

On issues that range from workforce to burnout to credentialing and immigration, industry leaders say the specialty faces real problems. And despite the urgent nature of these challenges, they complain that the specialty’s leadership has not done enough to prevent what they see as a coming crisis.

That’s why the leaders of some of hospital medicine’s largest practices have convened a group of their own, one that will examine issues they say will hobble hospital medicine if they’re not addressed.

A new think tank

This self-styled think tank, known as the Phoenix Group, includes the presidents and CEOs of 13 of the nation’s largest private practice hospitalist groups. Combined, the companies represent more than 1,500 practicing hospitalists, or almost 10% of the hospitalists estimated to be working in the U.S.

One of the remarkable things about the group is that its members “which include giants like IPC-The Hospitalist Company and Cogent Healthcare “compete fiercely with each other for hospitalist market share. But at a two-day meeting convened earlier this year in Phoenix, those same individuals came together to talk candidly about external threats that, in their view, are much more serious than internal competition.

In a white paper released in May, the group issued a stark portrait of the challenges facing hospital medicine, highlighting harsh realities that if left unresolved could threaten the specialty’s viability. The paper aims to sound an alarm about what’s broken in hospital medicine and U.S. health care in general.

“Everybody in this group is incredibly bullish about the growth of hospitalist medicine,” says Adam Singer, MD, IPC’s chief executive officer who spearheaded the group’s formation. “But you can get lost in the sea of that euphoria and not slow down to focus on real, substantive issues.”

The group’s goal, he explains, is to look beyond what he describes as the conventional wisdom, which says that a rising tide will float all boats. Instead, members of the group want to start a dialogue about how to either re-engineer the health care system, pull in more dollars, or both.

Doing nothing, Dr. Singer says, is dangerous. “Some of these boats,” he warns, “are going to sink when the tide comes down.”

Threats to the field

The Phoenix Group’s six-page paper outlines several threats that have emerged, in part because of hospital medicine’s unprecedented growth. On a group level, soaring demand for hospitalist services means that contracts can quickly become uncompetitive and physicians can burn out.

Some hospitalists, the paper points out, continue to face a hostile working environment, coping with improper assignment of referrals, unreasonable scrutiny and little opportunity for meaningful input into decisions that affect them. And while hospitalists are increasingly being charged with fixing quality problems, other health care sectors have failed to shoulder their fair share of finding solutions.

“Managed care has not stepped up to provide the funding for improvements that hospitalists offer their members in quality, access and service,” points out Phoenix Group member Stephen L. Houff, MD, founder and CEO of Hospitalists Management Group (HMG), which has more than 160 physicians in nearly 30 practices nationwide. “In most markets, insurers just seem to be along for the ride.”

But members of the new group say that hospital medicine faces even more fundamental problems from a payment structure that hasn’t kept pace with practice change.

“We’ve got a newly developed specialty that is working off an old reimbursement system that was designed to compensate physicians under the traditional practice model,” says Robert Young, MD, CEO of Eagle Hospital Physicians, which has 160 physicians working in more than 20 practices throughout the Southeast and Mid-Atlantic states. “This is a much more resource-intensive model, so there needs to be significant changes in reimbursement.”

At the same time, Phoenix Group members underscore another looming threat: Professional organizations have not paid enough attention to business and policy concerns.

“We should not allow the future advocacy of our field to be hijacked by theorists and academicians,” says HMG’s Dr. Houff. “There needs to be some clinicians in the mix who are rooted in the reality of what’s going on at the community hospital level.”

Manpower, manpower, manpower

While compensation and work issues are core concerns, the biggest threat facing hospital medicine “and, by extension, the rest of American medicine “is the deepening shortage of physicians.

“The latest estimates I’ve heard of where this field will grow to is 50,000,” says Eagle’s Dr. Young. “The pipeline for the supply of physicians is just not adequate now to reach that.”

The white paper outlines some short-term staffing fixes, like accelerated licensure processes. In some states, licensing delays for new physicians can range from six to 12 months.

But according to the Phoenix Group paper, long-term solutions need to be much more radical. Internal medicine training needs to be re-designed, the paper says, to help re-direct more doctors to hospitalist careers.

A “proactive effort” must be made to tap the nation’s more than 60,000 family physicians for hospitalist careers. That solution, the paper points out, will depend not only on changes in training but in the mindset of referring physicians and administrators.

A growing reliance on midlevel providers like NPs and PAs is “all but inevitable,” according to the group, but the solution likewise raises far-reaching issues about the training and utilization of midlevel providers.

“If we can’t attract more doctors into this space, we may be forced to turn more of the day-to-day routine care over to physician extenders,” says HMG’s Dr. Houff. While this is not consistent with the commitments that have been made to referring physicians, he adds “the economic and manpower realities need to be recognized.”

And sharply stepped-up advocacy and lobbying are needed to change visa laws, to keep more foreign nationals in the U.S. health care system.

“Literally half of the internal medicine training programs in this country are filled by foreign-schooled physicians, who then face caps on how many can continue to work here,” points out IPC’s Dr. Singer. “We see that as a major issue and a major solution.”

Skewed symptoms

According to the white paper, factors have emerged in hospital medicine that are designed to give programs a competitive edge in the cutthroat recruiting environment for hospitalists. But they also serve to exacerbate the workforce shortage.

Programs, for instance, that feature a seven-on/seven-off staffing model and no night call “require more bodies to do the work than a traditional call system,” explains Dr. Singer. To give programs a recruiting edge, he adds, “programs are now paying people more than full-time salaries to work less than full-time. That’s part of the problem.”

While such an approach might work for the largest and most well-heeled hospitalist programs, he adds, “that is not going to work in the mom and pop hospitals all over the country.”

Unreasonably escalating hospitalist salaries are another symptom of the skewed workforce supply.

“With hospitalists in such high demand, the average group is having a difficult time recruiting in any kind of cost-effective manner,” says Krishan Nagda, MD, founder and CEO of Central Florida Inpatient Medicine, a 32-hospitalist group in Central Florida.

Pressures on private practice?

As Dr. Nagda points out, his practice is one of the smallest among the founding Phoenix Group members. Local companies like his own, he says, which practice fee-for-service hospital medicine with only “minimal financial support” from the hospitals they serve, face a growing disadvantage.

“Private groups like ours find it hard to compete with hospitals or with programs that are financially supported by a hospital,” says Dr. Nagda. Part B reimbursement, he notes, from which practices like his get the majority of their revenue, is slated to be cut 40% over the next five years.

Among the key changes the group would like to see are revised federal gainsharing provisions, which now prevent physician groups from sharing cost savings with the hospitals where they work. “Aligning compensation or incentives seems to be a reasonable way to partner with a hospital,” Dr. Nagda says.

At the same time, some members of the group point out that the same pressures that private hospitalist practices are feeling are also working on hospital-employee models.

“There are different situations with different funding capabilities,” Dr. Singer says, “but whether or not physicians are employed by hospitals, these issues are very similar.” Hospitals that have started their own hospitalist programs continue to turn to management companies to rescue those programs and take them over.

And even hospitals with thriving employed groups, Dr. Singer adds, are constantly struggling with bottom-line performance. “They are not going to be able to continue to staff and afford these programs indefinitely,” he says.

Advocacy and leadership

To advance such an ambitious agenda, Phoenix Group members highlight another pressing need that they say hasn’t kept pace with business demand: effective and far-reaching advocacy.

The group is calling for partnerships with professional groups, including the AMA and the American Hospital Association, as well as with payer groups like America’s Health Insurance Plans. The group is also signaling a strong desire to work more closely with the Society of Hospital Medicine (SHM) to more forcefully tackle key policy and regulatory issues, such as changing visa laws and re-designing reimbursement.

“This is not a secession from SHM,” says HMG’s Dr. Houff, “but I would say that this is the first shot across the bow. This is an effort, in a very collaborative fashion, to encourage SHM to adapt to the very real challenges we face as an industry.”

In the meantime, he adds, the group is willing to flex its own political and business muscle to begin a long-overdue dialogue. The place to start is “admitting that there’s a problem,” Dr. Houff points out, which was the group’s intention in issuing the paper.

Now that the dialogue has begun, he is bullish on the specialty’s ability to translate unprecedented growth into real political influence. “Given our rate of growth and the place we increasingly occupy in the health care food chain,” Dr. Houff says, “I think as a bloc we can really affect some change at the state and federal level.”

Phyllis Maguire is Executive Editor of Today’s Hospitalist.

Phoenix Group members: a roster

The following private practice hospitalist groups convened at the first meeting of the Phoenix Group, held in Phoenix earlier this year. The group intends to meet again in September:

  • ADMIT, San Antonio
  • Apogee Medical Group, Phoenix
  • Central Florida Inpatient Medicine, Winter Park, Fla.
  • Cogent Healthcare, Nashville, Tenn.
  • Eagle Hospital Physicians, Atlanta
  • Emcare-Hospitalist Division, Dallas
  • Hospital Inpatient Management Services, Overland Park, Kan.
  • Hospitalists Management Group, Canton, Ohio
  • Inpatient Management Inc., St. Louis
  • IPC-The Hospitalist Company, North Hollywood, Calif.
  • PrimeDoc, Asheville, N.C.
  • Texas Inpatient Physician Associates, San Antonio
  • Total Care Management Associates, Las Vegas