Efficiency Rules

While nationwide demand for hospitalists outstrips supply, hospitals across the country are looking at how their hospitalists and their hospital medicine groups weigh in on efficiency.

The notion of efficiency at a time of rapid growth may seem counterintuitive, but healthcare dollars are always hotly contested, and an efficient hospitalist program has a better chance of capturing them than a less-efficient one.

Even the definition of efficiency is being refined. Stakeholders scrutinizing compensation packages, key clinical indicators, productivity and quality metrics, scheduling, average daily census, and patient handoffs to gauge whether or not their group has a competitive edge over others. And hospital medicine group (HMG) leaders are scrutinizing themselves because they know hospitals increasingly are inviting more than one HMG to work under their roofs—the better to serve different populations and compare one with another.

How to Measure Efficiency

An evolving medical discipline that aspires to specialize in internal medicine, hospital medicine is in the process of developing a consensus definition of efficiency for itself. Major variables included in the calculation are obvious: average daily census, length of stay (LOS), case mix-adjusted costs, severity, and readmission rates. Other, harder-to-quantify dimensions include how a hospitalist group practice affects mortality, and how scheduling, variable costs, hospitalist group type, subsidies, and level of expertise play out.

Table 1. Hospitalist Group Compensation Models

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The foundation on which hospitalist groups build their efficiencies is the group type. In itself, how a hospitalist group chooses to organize itself reflects a maturing marketplace. SHM’s 2005-2006 productivity survey shows an increase in multistate hospitalist groups, up from 9% in ’03-’04 to 19% in the latest survey. Local private hospitalist groups fell from 20% in ’03-’04 to 12% in ’05-’06. The percentage of academic hospitalist groups rose from 16% to 20% in the same period.

It’s unclear how to interpret the shift from local to multistate hospitalist groups and the increase in academic medical center programs, but these trends bear watching. Comparison of the two most recent SHM surveys shows compensation models are also growing up, reflecting the need to balance base salary with productivity.

A major indicator of hospital group efficiency is the performance of groups with hospitalists on duty 24 hours a day, seven days a week. Although hospital administrators and hospitalist leaders struggle with the economics of providing night coverage when admissions are slow, such coverage pays off in quality and efficiency.

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