Home Feature Productivity: What’s your sweet spot?

Productivity: What’s your sweet spot?

November 2011

Published in the November 2011 of Today’s Hospitalist

When it comes to patient volume, what’s the sweet spot for hospitalists?

While the specialty has long struggled with the answer to that question, data from the 2011 today’s hospitalist Compensation & Career survey show that over the last four years, patient volumes for hospitalists may have plateaued. For the last three years, adult hospitalists have reported between 16 and 17 patient encounters per shift, a number that hasn’t budged much, if at all.

For some, those numbers are a sign that the specialty is slowly developing a consensus about hospitalist productivity. Sure, there are plenty of hospitalists seeing more or fewer patients, but the fact that the average hasn’t changed much is viewed as a sign of stability.

But that stability in the number of encounters may be about to change. The big question is whether that number will go up or down.

On one side of the debate are hospitalists who think that patient encounters are due to bump up. It’s not that they think hospitalists aren’t working hard enough, but that declining reimbursements to hospitals will inevitably trickle down to hospitalists in the form of pressure to see more patients.

But others think that as health care reform takes effect, hospitalists may actually end up with fewer encounters. Hospitalists, the thinking goes, will be too valuable to hospitals focused on Medicare initiatives like value-based purchasing that affect the bottom line. Those hospitals may want physicians to see fewer patients so they can spend more time with each one to prevent readmissions and maximize the quality of care.

Trending up
Look at data from all four years of Today’s Hospitalist surveys, and you’ll see that patient encounters per shift have definitely gone up. In 2008, the mean number of patient encounters for hospitalists treating adult patients was 15.61; by 2011, it had jumped to 16.79.

While those data indicate a productivity jump of 7.5% ” an additional 1.18 patients per shift “three-year numbers paint a much different picture. Since 2009, there’s been effectively no gain at all in the number of patient encounters per shift. In part that’s because in 2010, patient encounters actually showed a slight dip.

Break the data down into patient encounters by type of employer, and the numbers look similarly stable. While patient encounters do vary by type of practice “from 14 encounters per shift for academic hospitalists to around 18 for local hospitalist groups “the numbers have fluctuated very little over the last three years.

Those data lead some hospitalists to conclude that hospital medicine has reached a plateau of sorts in terms of patient encounters and physician productivity. Christopher Frost, MD, national medical director for hospital medicine at Hospital Corporation of America (HCA) in Nashville, Tenn., says the data are in line with what he’s seeing. “The relative flatness of these data supports the idea that we are starting to see patient encounter numbers level out.”

Holding pattern?
The question, however, is whether the productivity levels the specialty has posted over the last three years will hold. Many hospitalists we spoke with pointed to growing pressure to raise productivity levels from hospital administrators, who are nervously awaiting changes in health care financing.

“We definitely see an increase in concern by the CEOs of hospitals and health systems,” says Kenneth R. Epstein, MD, chief medical officer of Hospitalist Consultants Inc., a national hospitalist management company based in Traverse City, Mich. “There are a lot of questions about what will happen to Medicare reimbursement come 2012.”

Because hospitalists treat a disproportionate share of Medicare patients, any drop in Medicare reimbursement could hurt their salaries. “Simple economics dictates that if reimbursements are going down, at some point that will have an impact on hospitalist salaries,” Dr. Epstein says. “Everybody is waiting to see what the impact is going to be.”

For now, however, hospital administrators are on edge, and some are turning to their hospitalists for help.” They are asking if physician productivity will support the hospitalist program,” Dr. Epstein says. “They’re not necessarily looking for programs to support 100% of their costs, but they want to make sure that as hospitalist programs grow, hospitals see a parallel increase in productivity.”

Salary support
Dr. Epstein predicts that as reimbursement tightens, hospitalists will likely see an end to the rapid growth in pay they’ve become accustomed to. He also thinks hospitalists should expect more upward pressure on productivity to support those salaries.

Dan Fuller, president and cofounder of IN Compass Health Inc., a national hospitalist company based in Alpharetta, Ga., sees similar concerns about productivity from the C-suite.

“Hospitals need a way to reduce their costs, and unfortunately we’re a line item on their budget,” Mr. Fuller explains. “Because nearly 90% of hospitalist programs are subsidized, we’re going to be on their radar. The demand is intensifying for hospitalists to be more productive and see more patients.”

Dr. Epstein points to another factor that makes him think hospitalist productivity may be due to go up: While compensation for hospitalists “and hospital subsidies for their programs “have seen double-digit increases in the last three or four years, productivity as measured by patient encounters has gone up less than 10%. As a result, he predicts that patient encounters per shift will likely reach 18 in the next year or two.

Supply and demand
In Florida, hospitalist productivity is being scrutinized for a different reason: Practices are looking at ways to increase productivity because they can’t find enough physicians.

At Central Florida Inpatient Medicine, a private hospitalist group in Winter Park, Fla., the 41 hospitalists each have 17 to 18 patient encounters per shift. While that number is a little higher than the national average, it’s perfectly in line with numbers for hospitalists practicing in the South.

“The demand for hospitalists is much greater than the supply,” explains Krishan Nagda, MD, the group’s CEO. “That causes a lot of pressure on physicians to see more encounters per shift.”

While just about everyone agrees that cutthroat competition for hospitalists in the South is leading to more patient encounters, Dr. Epstein sees another reason behind the trend: A large number of small- and mid-sized hospitalist programs can’t necessarily afford to staff groups as aggressively as larger facilities. “I am seeing pressure on small- and medium-size hospitals to boost their productivity,” he explains, “and there are a lot of small hospitals in the Southeast.”

While there’s no question that his physicians are busy, Dr. Nagda says he thinks the workload is balanced. Asked if he would like his physicians to have one or two fewer patient encounters a shift, he gives a firm “no.” “I see doctors who are seeing 14 or 15 patient encounters during a 12-hour shift,” Dr. Nagda says. “For the most part, they have a lot of down time.”

An ideal number of encounters?
Dr. Nagda is quick to add that not every hospitalist should be managing 18 patient encounters per shift, and that patient volumes depend on a host of factors. “If you’re doing a lot of orthopedic, postop care and preop care,” he explains, “those are healthier patients. They require different management than the patient who has chronic multiple conditions and is in the ICU.”

That points to problems the specialty has had agreeing on what constitutes an ideal number of patient encounters. There’s an inverse ratio between hospitalist productivity and quality, and no hospital wants to increase length of stay or cost per case by having hospitalists see too many patients.

Because of that delicate balance, no one wants to name an ideal number of patient encounters per shift. Many practice leaders, however, are more than willing to question the often-quoted notion that 15 patient encounters per shift is a good yardstick to measure groups by.

Jasen Gundersen, MD, chief medical officer of TeamHealth Hospital Medicine, questions what passes as conventional wisdom about hospitalist productivity. “Somewhere along the line,” he says, “it was decided that 15 patient encounters a day was the ‘right’ number for hospitalists. I think we have to look at that and question whether it’s a viable number. Is that where we as a specialty are most optimal?”

New view of productivity
No one is suggesting that hospital administrators will want to cut program size to save money. “Hospitalists can save $800 to $1,000 per case,” says Mr. Fuller from IN Compass.

“If you multiply that times 3,000 cases, hospitalists can save $3 million. Hospitals may lose that $3 million in savings by trying to cut $250,000 in staffing costs by having fewer physicians.”

And administrators who understand the balance between productivity and performance are already reshaping their views of productivity. Dr. Epstein says an example can be found in hospitals that are measuring hospitalists not only by patient encounters or RVUs, but according to other, less tangible metrics.

“They’re looking at the role of the hospitalist program in improving the efficiency of the entire hospital in terms of patient throughput,” Dr. Epstein says. “They’re asking if the hospitalist program is helping get patients who are admitted out of the emergency room faster. Or they’re asking how hospitalists are improving discharge planning to free up beds for patients coming out of the ICU.”

But what if hospital administrators, faced with new payment methods from Medicare that reward quality over volume, take a totally different tack? Could they decide that hospitalists need to see fewer, not more, patients?

It’s a radical idea, but it’s getting attention from some leaders in the field. HCA’s Dr. Frost, for example, says that many hospitals are already bracing for aspects of health care reform that emphasize how to enhance quality, rather than an exclusive focus on the current fee-for-service model.
He predicts that as more hospital revenue is pegged to initiatives that target quality, readmissions and hospital-acquired conditions, hospitalists may find themselves spending more time designing and implementing those initiatives.

“Hospitalists will serve as the chief architects, engineers and builders of safety and quality initiatives,” Dr. Frost says. “Our nonclinical time will become more valuable because it will translate into dollars for hospitals.”

Fewer encounters, better quality
If the idea of seeing fewer patients sounds like a pipe dream, consider the experience of the hospitalists in one group in southern California. HealthCare Partners, a physician-owned multispecialty group that has more than 90 hospitalists, receives capitated payments for each of its patient “members.”

Put simply, the group receives a small payment to cover each patient’s inpatient and outpatient treatment. If that patient sees a doctor every day or never sees a single physician, the group receives the same amount of money. If physicians don’t use resources wisely, the group must pay for patient care out of its own pocket. As a result, the physicians have a very strong incentive to use resources as efficiently as possible.

“It’s a much different model than fee-for-service medicine, where hospitalists have an incentive to see as many patients as they can and bill,” says Tyler Jung, MD, medical director of HealthCare Partner’s hospitalist group. “It is aimed much more at efficiency.”

While that’s theoretically the goal of every hospitalist program, Dr. Jung’s group takes a markedly different approach. One key difference is having hospitalists see fewer patients per shift than most other groups.

“Our hospitalists have about 14 patient encounters a day,” he says. “We find that when we start getting into 16 to 18 encounters, our hospitalists end up writing notes instead of trying to make significant interventions.”

The group has successfully driven down its length of stay for seniors to 3.2 days.” This is not a sleepy, call and order when you arrive the next morning,” Dr. Jung says. “We meet patients in the ER and start a work plan in the ER. It is pretty intense.”

A tipping point
Is Dr. Jung’s model “and his relatively low number of patient encounters “the wave of the future for hospitalists? If Medicare embraces concepts like ACOs and value-based purchasing, hospitals will face a similar set of rewards for efficiency, so it may not be that much of a stretch.

Dr. Frost thinks that as Medicare moves toward these types of new payment methods, hospitalists will get pulled in “and they’ll need to see fewer patients as a result. “We need time to develop and implement programs that focus on quality and efficiency,” Dr. Frost adds. “If you become a factory or mill model where you are just churning out patients, you’re going to take your eye off those metrics. They’re going to have a greater impact on reimbursement in the near future.”

As payers consider ACO models, he adds, “They are looking to hospitalists to partner with them. I think we’re approaching that tipping point where remuneration starts to line up with quality issues more than productivity.”

But Dr. Frost acknowledges that, for now, hospitalists will continue to feel pressure to do more. “Until we truly switch to the fee-for-value model,” he says, “there’s going to be pressure from the C-suite. But we are on the cusp of the fee-for-value model, and it is just a matter of time until we see volume plateau and maybe even decrease a little.” That will open up time, he adds, “for initiatives that enhance safety, quality and efficiency in our hospitals.”

Edward Doyle is Editor of Today’s Hospitalist.