Home Cover Story Do hospitalists really cost more?

Do hospitalists really cost more?

September 2011

Published in the September 2011 issue of Today’s Hospitalist

Study findings published last month detonated within the hospital medicine community like a little bomb.

Two researchers writing in the Aug. 2 issue of the Annals of Internal Medicine crunched Medicare data from 2001 to 2006 and compared the costs of care delivered by hospitalists to costs for patients followed into the hospital by their primary care physicians. The study compared not only hospital costs, but post-discharge costs as well.

Headlines about the study screamed the results: “Hospitalist care is more expensive.” While researchers found that hospitalists delivered lower lengths of stay and fewer costs in the hospital, the expenses associated with those patients’ post-discharge care blew through those savings, and then some.

Hospitalists saving money in the hospital, the authors concluded, were only shifting costs to the outpatient setting. Apply those additional dollars to the 25% of Medicare patients treated by hospitalists, they wrote, and hospitalists cost Medicare an additional $1.1 billion a year.

While the occasional commenter gleefully interpreted those results as proof that the wheels were finally coming off the hospitalist wagon, that was hardly the takeaway message among hospitalists.

“The study shows that we’ve conquered a huge issue, which is to bend the cost curve in the hospital, and we should be really proud of that,” says Adam Singer, MD, the founder and CEO of IPC The Hospitalist Company Inc. IPC, which is based in North Hollywood, Calif., and is the nation’s largest hospitalist practice company. “And the costs on the outpatient side are explained by the fact that we have a suboptimal system of post-acute care in this country.”

Robert Wachter, MD, the head of hospital medicine at the University of California, San Francisco, and one of the leaders of the hospitalist movement since its beginnings, agrees. “If study results are an indictment of anything, they’re an indictment of the entire health care system and the incentives embedded it in,” Dr. Wachter points out.

While the headlines may have singled out hospitalists, he adds, the study addresses a more general question. “What’s the impact of broadening our view of outcomes and costs beyond hospital boundaries?” Dr. Wachter asks. “The policy changes we’re beginning to experience are going to ask us all “hospitalists and primary care physicians alike “to broaden that view.”

Additional savings?
Looking at a 5% Medicare sample, the Annals authors concluded that hospitalists saved $282 per patient in the hospital and 0.64 days in LOS over care provided by primary care physicians.

But post-discharge billing in the next 30 days for patients cared for by hospitalists was $332 per patient more. That was due to more ED visits, fewer visits to a primary care physician and more patients discharged to a subacute facility instead of home.

To try to ensure an apples-to-apples comparison, the authors claim to have excluded unassigned patients from the sample. To do so, they included only those patients in the hospitalist cohort who had at least two visits with a generalist physician in the year prior to their hospitalization.

IPC’s Dr. Singer remains unconvinced that the hospitalist cohort analyzed could really steer clear of unassigned patients. “Yes, they tried, but there’s no way to know,” says Dr. Singer. “Between 2001 and 2006, the admissions that hospitalists were doing came from the ED unassigned panel.” The issue, he adds, is not whether patients had a primary care physician before they came to the hospital, but whether they had one available when they left.

“If patients are admitted through the ED panel,” he says, “by definition, many did not have a primary care physician.”

Daniel Brotman, MD, who directs the hospitalist program at Baltimore’s Johns Hopkins Hospital, thinks the study is an important one. But he has this question: How, if hospitalists cut two-thirds of a day in LOS, were they credited with only $282 per patient in savings?

“Shaving off two-thirds of a day is going to save hospitals more than $1,000,” Dr. Brotman says. Because Medicare pays per DRG, what it pays for hospitalist care vs. primary care in the hospital might not be significantly different.

“But somebody is saving that money, and it’s probably the hospitals,” Dr. Brotman explains. “Medicare may not see those dollars, but hospitalists are still saving money that ends up in the health care system.”

An old snapshot
For Denise Brown, MD, medical director for Galen Inpatient Physicians, which is based in Emeryville, Calif., the findings offer an interesting “if dated “snapshot of hospital medicine as it was practiced five to 10 years ago.

“We experienced growing pains in the 1990s and 2000s, when there was a real focus on ‘get patients in/get them out,’ ” says Dr. Brown. She finds it fascinating that the mean length of stay in the study for the hospitalist cohort was 5.17 days.

“That length of stay is crazy for me now,” she says. “We’re nowhere near that today. We’re around 3.6.” She points out that her own group, like many other hospitalist groups, plateaued on the LOS metric years ago “and moved on.

“Now we want to know about cost per case,” says Dr. Brown. “We want to know about patient satisfaction.”

Dr. Wachter also points to “more subtle aspects” of hospital care that may explain hospitalists’ higher post-discharge costs found in the study. Primary care physicians who no longer follow patients into the hospital, for instance, may be more likely to steer patients to the ED who experience post-discharge symptoms.

“That doesn’t mean that everybody was doing precisely the right thing, but it does mean that this has to be looked at holistically,” Dr. Wachter says. “It’s not just a hospital dynamic.”

For IPC’s Dr. Singer, the study confirms what he calls his “heretical” view that hospitalists shouldn’t be employed or subsidized by hospitals. The study authors point out that doctors who are employed or subsidized “may be more susceptible to behaviors that promote cost shifting.”

For Dr. Wachter, the study results say a great deal about incentives. Findings “demonstrate,” he says, “the way the real world works, in that incentives matter. Incentives then were really for hospitals to focus only on what happened within their walls.”

Galen’s Dr. Brown agrees, again finding an Old World view in the study results. “From a hospital’s point of view, post-discharge care isn’t the hospital’s problem,” she says. “If Medicare is paying more money post-discharge, that’s Medicare’s problem.”

New incentives
The problem with that view is that Medicare is about to make post-discharge costs and readmissions hospitals’ problem, and they know it. With health care reform poised to usher in readmission penalties, possible bundled payments and accountable care organizations, hospitals will now have to help devise systems of care at the lowest cost for patients over 30 or even 60 days, not three or four in the hospital.

According to consultant Martin Buser, MPH, a founding partner of Hospitalist Management Resources LLC, which is based in San Diego and Colorado Springs, many hospitals he now works with have already identified “a big black hole” of preventable readmissions: nursing homes.

“There’s almost a knee-jerk reaction by the nursing home that if somebody falls out of bed or their meds are out of whack, they just send patients back to the hospital,” Mr. Buser notes. Hospitals seeking to gain some control are starting to assign a hospitalist to a nursing home or skilled nursing facility two half days a week as medical director.

“They do quick rounds, but it creates continuity,” Mr. Buser points out. He’s also consulted with hospitals that now assign nurse practitioners “who are paid by the hospitalist groups “to round on patients after they’ve been discharged to nursing homes.

“They at least keep the lower-level problems from bouncing back,” he adds. “It’s important to the hospital to try and plug some of these quick readmissions.” He also now sees hospitals tracking SNF readmission rates. Those with out-of-control rates, he points out, might lose hospital referrals.

A push into post-acute care
And hospital medicine has been trying to improve post-discharge care for years. IPC’s Dr. Singer recalls that the first software program he ever had written “back in 1995 “”was used specifically for calling patients post-discharge.” IPC has since maintained a call center with nurses making post-discharge calls, an innovation that many other hospitalist groups have implemented.

Even more importantly for what Dr. Singer calls “transition management,” IPC is now aggressively staffing up and buying practices that provide post-acute care in long-term care facilities, SNFs and nursing homes. IPC’s 1,700-plus providers now work in more than 300 hospitals “and 400 post-acute care sites. Some IPC providers have been working in post-acute care since 1998, but the company’s push into such facilities has accelerated over the past two years.

“Our acute-care hospitalists now have access to IPC post-acute care hospitalists in every single market we’re in,” Dr. Singer says. “It wasn’t so much a cost issue as a clinical one.” In large part due to taking control of some post-acute care, Dr. Singer points out that the company’s readmission rate is about half the national average, coming in around 10%.

When he began building that part of his company, he says, care was often provided by retired physicians who rounded once a week or once a month.

“That’s the old world of the skilled nursing facility,” Dr. Singer says, “so we have to start from scratch. It’s not unlike the beginning of the hospitalist movement, and to me it looks like 1997 all over again. You’ve got 15,000 nursing homes and absolutely no formal process of care going on at all.”

Post-discharge innovations
While few hospitals have started sending hospitalists into a post-acute setting, that may change. But with readmissions now solidly on hospitals’ radar, Mr. Buser says that hospitalists should expect to see some quality bonuses pegged to readmission rates.

“We’ve been drafting new incentive programs in the last six months, putting in readmission rates,” he notes. At this point, those incentives aren’t very heavily weighted because “everybody realizes there is a learning curve.”

In the meantime, hospitalists are throwing many different strategies at post-discharge care, efforts that really only began on a large scale in the last five years, which aren’t covered by the data in the Annals study.
More hospitalist groups, for example, are calling patients post-discharge; considering post-discharge clinics, which present a tough business case; and devising electronic discharge summaries.

In Port St. Lucie, Fla., Fernando Petry, DO, the director of the hospitalist program at St. Lucie Medical Center, notes that the readmission rate for his hospitalist group, which is employed by HCA, is well below those of the primary care physicians there who still follow their patients.

In addition, Dr. Petry says, his hospitalist group has now implemented Project RED (reengineered discharge), a program from Boston Medical Center that tests strategies to improve post-discharge care.

“Clinical nurse leaders are doing follow-up phone calls two or three days post-discharge,” Dr. Petry notes. “We’ve also implemented a system with Walgreen’s where we send them a prescription and they bring the medications here to the hospital so patients have them in hand when they leave.”

Where primary care needs to step up
Hospitalists also say that findings like those in Annals work both ways. While hospitals may need to take some responsibility for what goes on outside their walls, primary care needs to step up as well.

“These patients need to be seen relatively soon,” says Galen’s Dr. Brown. “Primary care physicians have a responsibility to make space available. There needs to be some true continuum. Hospitalists might own the most intense piece of that continuum, but it’s not the only piece.”

For hospitalist Vijay Gandla, MD, the medical director at High Point Regional Hospital in High Point, N.C., the idea that hospitals would abandon hospitalists in response to study results like these is preposterous. Simply comparing length of stay and costs, he notes, doesn’t even begin to recognize the linchpin role that hospitalists “particularly in the last five or 10 years “have come to play.

“In 2001, hospitalists were just one of 15 specialties, but not anymore,” Dr. Gandla says. “Now, subspecialists rarely admit patients and require an admitting service “which, by default, is the hospitalist service.” Hospitalists take care of a growing number of self-pay and unassigned patients and help improve ED throughput, he adds. “We’re even admitting neurosurgical bleeds, which was never heard of in the past.”

In his eyes, hospital administrators won’t even blink over these results. “For them, it’s not a question of saving $200 per patient,” Dr. Gandla says. “It’s a question of whether the hospital “without hospitalists “could continue to exist.”

Dr. Wachter admits that he too would be shocked if, facing the new payment incentives coming down the pike, hospitals would decide to try to bring primary care physicians back to the hospital. “That genie is out of the bottle,” he points out, “and I would be willing to bet with very good odds that that’s not the way this will play out.”

Instead, Dr. Wachter says, “hospitals will turn to their hospitalists and say, ‘We’re changing our world view, and you need to do the same.’ And I think hospitalists are already two or three steps ahead of them on that.”

Phyllis Maguire is Executive Editor of Today’s Hospitalist.

The elusive primary care follow-up

JUST HOW HARD IS IT for patients to get a post-discharge appointment with a primary care physician? The question comes up in the wake of an article in the Aug. 2 Annals of Internal Medicine, which found that hospitalists caring for Medicare patients chalked up higher post-discharge costs “due to higher rates of ED, subspecialty and post-acute facility visits “than their primary care counterparts.

The answer to that question, however, depends on where physicians practice. Denise Brown, MD, is medical director of the hospitalist department at Sequoia Hospital in Redwood City, Calif., which is staffed and managed by Galen Inpatient Physicians, a dedicated hospital medicine company.

According to Dr. Brown, many patients in her area are affluent enough to afford concierge primary care. For the majority of her group’s patients, timely follow-up isn’t a problem.

It’s also not an issue for patients being discharged from High Point Regional Hospital in High Point, N.C., says hospitalist and medical director Vijay Gandla, MD.

With the help of community-subsidized and hospital-affiliated clinics, “we are able to get them in whenever we want, most of the time,” Dr. Gandla says. “But in Massachusetts, where I used to work, forget it. It’s a standard one month.”

That one-month black hole is the reality faced by many patients in south-central Florida, says Fernando Petry, DO, the director of the hospitalist program at St. Lucie Medical Center in Port St. Lucie.

But the real crisis, which has gotten only worse since the economic downturn began in 2008, “is uninsured patients under age 65 who are self-pay and charity,” Dr. Petry reports. “That group of patients continues to grow.”

In an effort to get those patients some sort of follow-up, hospitalists keep turning to severely strapped safety net programs, one funded by the state and the other by the federal government. Those have provided some help.

But Dr. Petry admits that he’s also spending time on the phone in increasingly tense conversations with local primary care physicians. “They keep saying, ‘You guys are referring patients to me who don’t have insurance,’ ” he explains. “I have to remind them that there’s a contractual obligation in return for the hospitalists covering their ED call to admit patients back to them as the follow-up PCP.”