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Productivity: Are you keeping pace?

November 2010

Published in the November 2010 issue of Today’s Hospitalist

When it came time last year to renegotiate the subsidy for his group, Reuben Tovar, MD, chair of the 50-physician Hospital Internists of Austin, decided to call in a consultant to look not only at the group’s subsidy, but its soaring productivity figures. The group, in Austin, Texas, and the administrators of several hospitals where group members serve, agreed to split the cost of the consultant “and to take the recommendations seriously.

Putting your fate in the hands of a consultant may seem like a gutsy move, but Dr. Tovar was fairly certain that the analyst would quickly realize that his group’s physicians needed some financial help to give administrators the leadership they wanted from the hospitalists. Sure enough, the consultant recommended that the hospitals increase their subsidy. Dr. Tovar turned around and used that increase to hire five more physicians.

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The increased subsidy “and staffing “were designed to give the group’s physicians more time for hospital leadership duties and quality improvement initiatives. More financial support also means that the group’s physicians can now spend more time heading up committees. Until recently, the hospitalists, who are paid solely based on their productivity, had to work those duties into their free time.

“Some of us will see fewer patients, but our incomes will be stabilized,” thanks to the new subsidy, says Dr. Tovar. “The hospitals realize that hospitalists not only take care of patients, but they take care of the hospitals. And our hospitals are demanding that we spend more time managing.”

That’s a sentiment being echoed by hospitalists and analysts everywhere: As hospital medicine matures, the definition of hospitalist productivity is evolving. Patient revenues are still critical to the bottom line, but hospitals increasingly want hospitalists to produce more than patient encounters or shifts per month.

And as hospital executives brace for soon-to-be-enacted payment changes, experts say that hospitalists will be at the heart of a transition from fee-for-service payment to pay for performance. As a result, they say, hospitalists should expect to see many other aspects of their care being measured than just their number of patient encounters.

The impact of the economy
Data from the 2010 Today’s Hospitalist Compensation & Career Survey show that patient encounters for hospitalists haven’t changed much since our 2009 survey. In this year’s survey, hospitalists reported an average of 15.84 patient encounters per shift, compared to 16.26 last year. And hospitalists in many different employment models reported working fewer shifts per month in 2010 than last year. (See “A look at productivity by employer” on page 43.)

Several factors likely affected hospitalist productivity this year, one of which was a tough economy. Christopher Frost, MD, national medical director for hospital medicine at HCA-Hospital Corporation of America in Nashville, Tenn., says that while many hospitalist groups may get a significant percentage of their admissions from the ED, “we saw ED volumes become softer during the recession.”

Many hospitals also saw fewer patients opting for elective procedures, again due to economic hard times. But Leslie Flores, a principal with Nelson Flores Hospital Medicine Consultants in La Quinta, Calif., points out that even though hospitals may have seen their overall census decline during the recession, the proportion of patients within hospitals being treated by hospitalists increased, due to a growing number of referrals and/or service lines. For hospitalists, those trends helped keep their number of patient encounters even.

Established groups, flatter growth
For Brian Bossard, MD, who founded the 20-physician hospitalist program at BryanLGH Medical Center in Lincoln, Neb., flat productivity figures for the specialty come as no surprise. That’s been the situation at his nine-year old program for a couple of years.

For Dr. Bossard, that plateau represents the maturity of his program. The big spike in his group’s productivity, he says, came between 2006 and 2008, when the number of physicians referring patients to his group began to snowball.

“We had done a lot of marketing and, as a result, captured more referrals,” he explains. At the same time, community physicians who had resisted signing over patients to hospitalists during the first few years of the program eventually “developed a comfort level and started referring their patients,” Dr. Bossard says. “That didn’t happen until we’d been in practice about five or six years.”

The result was a whopping 42% increase over a two-year period in the group’s number of patient encounters “an increase that Dr. Bossard says he was worried the physicians wouldn’t be able to sustain.

Two years later, his group has adjusted to that volume, and new growth has been more controlled. (His group has also started new hospitalist programs at smaller community hospitals.) “Because we had such a spike three years ago,” says Dr. Bossard, “I see it as a positive that we not only maintain those volumes, but we continue to grow at a much more predictable rate.”

One element in the equation
Stability in hospitalist productivity also reflects the growing maturity of the field, says Jefferey Winningham, MD, director of the 40-physician hospitalist team at Providence Regional Medical Center in Everett, Wash. In fact, he says, a group’s age may skew productivity figures one way or another.

“National data can include more programs that are new, and those tend to have higher production,” Dr. Winningham says. “They are working harder, trying to hire docs.” When his group started 12 years ago, the physicians in the group posted phenomenal productivity figures. “But we’re more mature now,” he points out. “Partners are doing team projects; the hospital wants us to hit benchmarks on core measures; and administrators want to see how well we code, notify PCPs on admission and discharge, and do hand-offs.”

In groups like Dr. Winningham’s, productivity is now just one element in the reimbursement equation. Hospitalist consultant Ms. Flores says that a growing number of her clients are finding themselves in a similar situation: They’re being asked “and paid “by their hospitals to increase staffing. The goal isn’t necessarily to cover more patients, but to take on greater organizational duties and leadership roles.

“Hospitals are increasingly seeing hospitalists as key strategic partners who help accomplish their goals,” says Ms. Flores. “They see that as evolving beyond just seeing patients in the hospital and implementing protocols to improve care. And they know they will have to pay for it.”

New focus on team productivity
Dr. Winningham says that the members of his group have also come to realize that incentivizing only productivity can sabotage how productively the whole group can operate. Both the hospitalists and the hospital executives now realize the importance of team productivity, not just how many patients each physician sees.

While the hospitalists’ bonus pool “which makes up about 20% of their total income “used to be devoted exclusively to productivity, Dr. Winningham says that group members realized that “if you just emphasize productivity, that doesn’t mean that physician behaviors are conducive to smooth handoffs or being a team player.”

Doctors could always boost their individual productivity by rushing to take another admission, Dr. Winningham says. But by doing so, they may not take the time to write up a good interim summary or deal with a tough family encounter. That work may get passed on to a colleague.

As a result, productivity now accounts for 70% of each hospitalist’s potential bonus, while the rest is pegged in equal amounts to coding, primary physician satisfaction, core measure performance and teamwork, based on how group members grade each other.

To help boost team productivity, Dr. Winningham says, group members now pay much more attention to tracking when patients come in and how they are distributed and matched to available physicians.

“We want to make the whole team efficient,” says Dr. Winningham. “If the day hospitalist is still rounding but the night hospitalist is sitting around, that hurts overall team productivity.”

New business model
Patrick Torcson, MD, medical director of the hospitalist group at St. Tammany Parish Hospital in Covington, La., says that the number of patients each physician in his group sees ” 15 to 18 a day “hasn’t changed much in recent years. In part, that’s because the hospital his group works with “gets” the fact that having too many encounters can lead to problems with quality, safety and hospitalist burnout.

But Dr. Torcson, who runs a group with 11 providers and is chair of the performance and standards committee for the Society of Hospital Medicine, predicts an increasing demand when it comes to patient volumes. Hospitalists can expect, he says, to be taking care of increasing numbers of their hospital’s patient population.

“Any patient who isn’t pregnant or going directly into surgery will be ours,” says Dr. Torcson. “It will be an ongoing challenge to stay within 15 to 18 encounters per shift in the face of the increasing demand for our services.”

But even more importantly, he adds, hospitalists should expect big changes in terms of performance expectations. At his hospital, Dr. Torcson has tracked hospitalists’ productivity (both the group’s and individual physicians’) in terms of encounters and work relative value units.

But his hospital within the last year or two has begun paying closer attention to additional clinical metrics: individual hospitalists’ rates of readmissions, hospital-acquired infections, and cost per case. According to Dr. Torcson, physicians who want to focus only on productivity and what they can earn by churning through patients without paying attention to readmissions, hospital costs or infection rates may be in for a rude awakening.

Value-based purchasing is coming
Fueling that trend is Medicare’s plan to go live in 2013 with value-based purchasing for hospitals, transitioning away from the CMS’ current pay-for-reporting hospital update structure to actual pay for performance. This new system, says Dr. Torcson, will put “a substantial amount” of a hospital’s DRG payments at risk “and it will be an opportunity for “a new business case for hospital medicine.”

Hospitalists will still be expected to reduce length of stay, but volume will be less of an issue. “Now, the focus is really on having the best outcomes for the lowest possible cost for the volume of patients that you have,” he says. “Success is no longer going to be quantity of care but quality of care.”

And with the passage of health care reform earlier this year, Dr. Torcson adds, Medicare’s long-planned switch to value-based purchasing is being compounded by the CMS’s plan to create accountable care organizations (ACOs). Such organizations (and, potentially, the physicians working in them) would be eligible for shared-savings bonuses for coordinating patient care across both inpatient and outpatient settings. That move, like pay for performance, would make hospitalists’ cost per case a key concern.

“We’re looking at coming to the end of the era of fee-for-service medicine,” says Dr. Torcson. “Productivity in terms of patient volume is becoming secondary to outcomes and quality of care.”

Lisa Jaffe Hubbell is a freelance health care writer based in Seattle.

Are patient encounters taking more time?

THE 2010 TODAY’S HOSPITALIST COMPENSATION & CAREER SURVEY found that hospitalist productivity remained relatively flat, compared to survey figures last year. But if the number of patient encounters is staying the same, is the amount of time that hospitalists spend in each encounter getting longer?

That depends on who you ask. According to Christopher Frost, MD, national medical director for hospital medicine at HCA-Hospital Corporation of America, based in Nashville, Tenn., the answer is “no.”

“We’ve evolved in our practice patterns,” Dr. Frost explains, “and we’re moving more to adapting processes that augment efficiency.” In the past, he says, he may have spent one-third of his time at the bedside and the rest of the encounter on documentation and other forms of indirect patient care. “Now, I can spend a larger percentage of my time at the bedside without sacrificing efficiency, by utilizing documentation templates and working with extenders.”

But Jefferey Winningham, MD, who directs the hospitalist team at Providence Regional Medical Center in Everett, Wash., thinks each encounter now takes hospitalists more time.

“The case mix index of the hospitalists’ patient population has gone up, and medication reconciliation is taking more time,” says Dr. Winningham. And as hospitalists offer more comanagement service lines, they’re spending more time serving as quarterback of a growing body of subspecialists for each patient.

Reuben Tovar, MD, agrees that patient encounters are becoming more complicated. In part, he says, hospitals are counting on hospitalists to boost their efforts in documentation to maximize revenue.

“There’s more you have to do for each visit in terms of billing queries and signatures, and basically buffing the chart every time you go in,” says Dr. Tovar, chair of the 50-physician Hospital Internists of Austin in Austin, Texas. “That wasn’t part of the physician’s job 10 years ago.”

An even bigger amount of time per encounter is spent complying with hospitals’ move to electronic records. “Systems tend to not be as robust as they need to be,” Dr. Tovar points out. “Going electronic is more labor intensive than labor-friendly, so that takes more time, for sure.”

Productivity in academia: a moving target

WHAT’S THE “SWEET SPOT” FOR HOSPITALIST PRODUCTIVITY? Answering that question is difficult for all hospitalists, but particularly tricky for physicians working at academic centers.

One thing is clear: Academic hospitalists report fewer patient encounters than their colleagues in other practice settings. In the 2010 Today’s Hospitalist Compensation & Career survey, for example, academic hospitalists reported the lowest number of daily patient encounters across employment models: 13.31 vs. 17.93 for hospitalists working in national management companies.

But Daniel J. Brotman, MD, who directs the hospitalist program at Baltimore’s Johns Hopkins Hospital, says that survey data often obscure academic hospitalists’ real productivity level. “When I’m covering a teaching service,” he says, “I have a resident service of six house officers and I can take care of 30 patients in less time than I can take 10 patients all by myself.”

“It matters who you are working with,” Dr. Brotman explains. “Are there housestaff or physician extenders? You can’t assume the answers to those questions, because many hospitalists at academic institutions work without any assistance.”

While it may be difficult to produce an apples-to-apples comparison of academic hospitalists’ productivity, Dr. Brotman says that his colleagues need to track their productivity numbers. While academic centers need hospitalists to meet work-hour regulations for residents, budgets are tight, and hospitals are looking to increase efficiency wherever possible.

When it comes time to prove their worth, he says, academic hospitalists need to move beyond measuring productivity based on encounters per shift. Dr. Brotman says that’s a “flawed metric” that’s too simplistic, particularly in the academic setting.

“Programs with a lot of encounters per day really emphasize that metric,” he points out, but productivity figures need to be tempered with peer, nurse and patient evaluations.

“It’s not all about encounters,” Dr. Brotman says. “If it’s all done by the numbers, you miss out on people who are more quality oriented but less numerically impressive.”