Published in the October 2011 issue of Today’s Hospitalist
Many commentators in hospital medicine have noted the significance of the fact that our per-doc subsidy now tops $130,000 a year, according to new SHM/MGMA data. Some see in that jump a cause for alarm. Are hospitals about to hit their equivalent of a national debt ceiling in terms of how much more they will dole out to hospitalists? Is our subsidy on an inexorable trajectory to default as our profession’s primary payment model?
According to the simplified “value equation” employed by Dr. Wachter in many excellent lectures that I have attended, there is certainly some justification for concern. Value equals quality divided by cost, and some believe that once the denominator outpaces the numerator, our resulting drop in relative value will no longer support our growing subsidization. Hospitals will then, the theory goes, take their dollars elsewhere, seeking value that is less cost-prohibitive and leaving us as formerly overpaid, glorified internists in search of new employment.
While I do believe there is reason for dread, here is my take on the whole rising subsidy thing: Don’t sweat it.
Let me be clear. Hospitalists would be foolish to interpret this advice as a call for us to suddenly become disengaged and apathetic in terms of the skills that have made us so successful ” namely, more than a passing familiarity with how to produce quality and efficiency.
In fact, I probably need a legal disclaimer that states that these opinions are only that ” opinions “and that I cannot be held responsible for whatever horrible thing happens to you, should you take my “don’t sweat it” too far. (I’ve never bothered with such a disclaimer because it just seemed preposterous that anyone would take what I believe seriously.)
Now legally buttressed, let’s get back to why there is no need for diaphoresis. The short answer is this: We now make health care’s most important widget.
Let me explain. Previously, hospitals and doctors derived the greatest profit from procedural widgets, and there are still many people making plenty via procedures. That train hasn’t yet left the station, but the engine has started and the conductor has just yelled, “All aboard!”
Cuts for procedures
As evidence, look no further than the recent reimbursement cuts for many cardiac procedures. Not coincidentally, the majority of cardiologists now find themselves employed, a reality that would have been unthinkable only five years ago. And recent news suggests that, arguably, even those who have the most skill at extracting procedural reimbursement “radiologists ” might get hammered.
The Centers for Medicare and Medicaid Services (CMS) is pushing for a “Buy one, get one half off!” sale for reading MRIs and CT scans. They propose paying full price for the first CT read during a hospital stay, but getting the second and all subsequent scans read at 50% off the original’s sticker price.
It’s no surprise that this is the low-hanging fruit of cost reform, given the volume of MRI and CT readings performed and the fact that many such readings demonstrate little clear-cut evidence of benefiting patients. In case you have trouble coming up with a familiar and unnecessary test or procedure, let me suggest one of my favorites: an MRI of the brain to rule out TIA in a bedbound 90-year-old.
Still, radiologists aren’t too keen about this “bargain blowout.” According to AM News coverage,”This is a bold attempt by CMS to reduce physician payments without specific authorizing legislation,” said John A. Patti, MD, chair of the American College of Radiology Board of Chancellors. “If this proposal is allowed to stand, eventually all physicians will be affected.”
Bullish on us
So if the procedural widget is in jeopardy, what about our widget? Long answer short: I remain bullish. That’s because our widget ensures better efficiency from admission to discharge “and, increasingly, after discharge as well. So let’s call it the “thrufficiency” widget.
The system we work in has historically viewed this skill set as an afterthought. And it’s no wonder that efficiency has been given short shrift, given that health care consumers are largely price insensitive and that providers (and this is no slight to our compassion and competence) have practiced in a fee-for-service model that has rewarded them more for doing more. But the fee-for-service model is changing, and doctors and hospitals alike are preparing for this through direct employment models.
So back to the value equation. Why shouldn’t the “thrufficiency” widget be subject to decreasing value as costs increase? While I don’t think we’ll be immune to that devaluation, here are the reasons I do think we will be resistant.
First, “thrufficiency” is health care’s long-term bet on saving money. Squeeze reimbursement for procedures, and there will be fewer procedures “a relatively simple strategy when you are going broke. But if you squeeze doctors who produce “thrufficiency,” there will be less of that too, and no one can afford that scenario any longer.
That means the demand for “thrufficiency” will remain strong, especially because the supply side will still struggle to keep up. Residency work-hour reform is having a major impact. Hospitalists are moving to a shift-based system as hospital medicine becomes a 24/7 in-house profession that all but mandates that a doctor’s cumulative work will total well less than 50 hours per week.
Another reason: Our work cannot be easily outsourced, like reading X-rays can be to a foreign country, or readily insourced, using allied health professionals (although this is an area with great untapped potential).
Nor do I believe that subspecialists will move in droves to adapt our model and become admitting doctors again. More likely, employers will see the value in having fewer subspecialists doing what they do best: procedures and expert consultative opinions. Those of us practicing “thrufficiency” will be the “worker bees,” and it will be our job to implement that advice, freeing up subspecialists to best utilize their expertise.
Finally, “thrufficiency” takes time. It simply is not possible to see more than 20 patients a day and be a practitioner of this fine art. So don’t sweat it … yet. Demand for thrufficiency specialists (thrufficienists?) will continue to grow while supply will continue to lag. We make a very valuable widget that seems to be getting more valuable every day, no matter how much the darn thing costs.
Erik DeLue, MD, MBA, is medical director of the hospitalist program at Virtua Memorial in Mt. Holly, N.J. Check out Dr. DeLue’s blog and others on our website.