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Hospital medicine groups, like the people who design and populate them, come in all shapes and sizes. Because the field has matured rapidly with the number of hospitalists growing from 8,700 to 12,000 in the past two years and 50% of hospitals with 200 beds or more having hospitalist programs according to Health and Hospitals Network, there’s naturally been some excessive exuberance, fits and starts, and successes and failures along the way. These stories from the trenches of hospitalist group start-ups reveal just how tricky it is to get it right.

Norma Malgoza, MPA, assistant vice president of Chicago-based Sinai Health Systems, launched that 532-bed academic medical center’s

hospital medicine program in July 2005. The department of internal medicine, which wanted to decrease patients’ length of stay, improve care quality, handle large numbers of unassigned patients, and provide 24/7 coverage, prompted Sinai to hire hospitalists.

After conducting a feasibility study and networking with peers at local hospitals that had hospitalist services, Malgoza struggled to start a program that wouldn’t bust the budget but would attract hospitalists attuned to the department of internal medicine’s goals. Attending an SHM one-day conference, “Best Practices in Managing a Hospital Medicine Program,” (see www.hospitalmedicine.org) helped her with financial modeling, projecting volumes, and devising schedules and compensation packages.

Research Says ...

Succeeding in hospital medicine requires understanding the market conditions that make hospitals and health plans receptive to such services. Here’s what a large study based on 1,000 semi-structured interviews of the largest medical groups, hospitals and health plans in 12 major metropolitan areas showed:

  • Reasons executives cited for starting a hospitalist program: pressure on office-based doctors from reimbursement that didn’t keep pace with rising practice costs; physicians closing struggling office practices; specialists wanting to avoid inpatient care completely; accelerated growth in healthcare costs coupled with the perception that hospitalists decrease costs; predominance of fixed payment methods; capacity constraints impacting ED and inpatient throughput; and malpractice cost pressures;
  • Growth of hospitalist programs: Sponsors initiated programs in six of 12 major markets, and increased use of hospitalists in 11 markets; and
  • Variations in hospitalist uses: Intensity of hospitalist use varied dramatically (e.g., in Boston most medical groups used them while in Syracuse, N.Y., they were used sparingly). Hospitalists had widely varying rates of penetration on patient load: 5% in one Miami hospital, 50-70% penetration in Orange County, Calif., hospitalists, 100% in a Phoenix hospital.

Source: Pham HH, Devers KJ, Kuo S, et al. Health care market trends and the evolution of hospitalist use and roles. J Gen Intern Med. 2005 Feb; 20(2);101-107.

With a grasp of what’s involved in starting a hospitalist service, Malgoza launched the program with 6.5 full-time employees and a physician’s assistant who helped with busy emergency department (ED) night admissions. Now, with a hospitalist average daily census (ADC) of 22 and an attractive compensation system, Malgoza says of the hospitalists, “They are so energetic, always accessible, and will find a pharmacist to get a prescription filled, or push the social workers and nurses to get assessments done. It’s wonderful.”

Recognizing the limited amenities of the aging inner-city hospital, Malgoza hopes to offer hospitalists better facilities. “We want to keep them happy, to give them their own space and a library,” she says. In hindsight she’d add a case manager’s salary to the start-up budget and is working on getting that support.

Developing hospitalist programs using a business plan, such as that developed by Sinai Hospital Systems, is one approach. Anne Borik, MD, created an alternative plan. In the 1990s she grew a program in Phoenix from “ground zero,” as she calls it. Unsatisfied professionally in a large multi-specialty group, she sought a transition to inpatient work only.

“Something ignited the fire within me to be a hospitalist,” she says. “I knew I could reduce bed days and increase patient satisfaction because I wouldn’t be in a rush when I saw patients.”

She sent resumes to hospital administrators, colleagues, and her mentor, who introduced Dr. Borik to North Hollywood, Calif.-based IPC-The Hospitalist Company. Dr. Borik and two other physicians launched IPC-Phoenix at Phoenix Arizona Heart Hospital, generating initial referrals by knocking on primary care physicians’ doors, offering to cover night call and vacations. They agreed to take all unassigned patients at the hospital. “We did things that didn’t threaten other doctors. Only what would make their lives easier,” she adds.

Much has changed since the program’s launch. All IPC physicians now use PDAs with proprietary software, leading to 100% compliance with billing, and discharge reports sent directly to primary care physicians. Call centers contact every patient within 48 hours of discharge to follow-up on recommendations. Recognizing that becoming a hospitalist is a difficult transition for any physician, IPC has a six-month orientation period, especially vital for doctors just out of residency.

“We helped kick off this medical specialty,” says Dr. Borik. “What a great feeling that is.”

Make sure you understand the political climate in which you are starting the program, give community doctors time to get used to the idea, expect hospitalist turnover in the early stages, and be ready to hire new hospitalists quickly as demand builds.

—Michael Pistoria, DO

Second Time’s a Charm

Sometimes all the planning for a hospitalist program doesn’t produce expected results, and the launch has to be rethought. Mark Krivopal, MD, director of the Hospitalist Program at Beth Israel Deaconess (BID), Needham (Mass.) faced that challenge. Although BID’s main hospital (an academic medical center) had a thriving hospitalist program, the first attempt three years ago to start one at BID-Needham, a 45-bed community hospital, went awry.

“The community physicians didn’t want to cover night call so they hired third-year residents and moonlighters to do so,” says Dr. Krivopal. “There were problems: no 24/7 coverage, the residents capped the number of admissions and called the medical staff to come in beyond that number, the billing system was sub par, and the community doctors felt they were overcharged.”

The program foundered and BID went back to the drawing board with an internal request for proposals to hospital medicine groups. Dr. Krivopal’s group, Affiliated Physicians Group Hospitalists, proposed a program starting with three hospitalists taking referrals from seven of Needham’s medical groups already familiar with them. They eliminated caps on admissions, implemented 24/7 coverage, fixed the billing system, started covering the seven-bed ICU, and decreased moonlighters’ hours.

Twenty medical groups now use Affiliated Physicians Group Hospitalists. As for relationships among the hospitalists, Dr. Krivopal aims for democratic decision-making held over quarterly dinners, frequent e-mails to share information and derail hidden agendas, and financial incentives that reward a steady increase in ADC. He has integrated hospitalists into BID-Needham’s committees, including the executive committee, P&T, medical review, and patient safety. “It’s not billable hours, but committee work gives us knowledge of what goes on in the hospital, from A to Z,” he concludes.

The hospitalists at Dallas’ Presbyterian Hospital also did better the second time around. In 1992 local physicians grew tired of night admissions; they paid two residents to cover for them and then billed payers. Several years later the referring physicians became unhappy with these arrangements and approached the hospital to start a hospitalist service. In 1997 Scott Fitzgerald, MD, who was then chief resident, contemplated the debt and hassles of opening an office, saw a good fit for Dallas Presbyterian’s need for a hospitalist service and his professional goals. He founded MD on Call, a private hospital medicine group, which still serves Dallas Presbyterian and now employs 16 hospitalists. Having experimented with staffing for a 180 patient load, each physician has an ADC of 12-13. “We keep it lower than most groups’ 16-20 patients,” says Dr. Fitzgerald. “Because I scrutinize quarterly data I know that above 16 our costs and LOS creep up.”

In 1999 the program hit a speed bump when the hospital threatened to reduce the group’s rates. The group, in turn, threatened to leave. “We resolved it by demonstrating that every dollar they paid us earned seven dollars for the hospital, not to mention the growing scope of our activities,” says Dr. Fitzgerald. “In the beginning we were forbidden to do consults, particularly for surgeons. Two years later, we were doing it all.”

He says that the hospital loves the group because it serves the medical staff’s goals and helps grow market share, as hospitalists continue to market to physician practices in outlying suburbs.

Rundsarah Tahboub, MD, medical director of the Hospital Medicine Service at Grant Medical Center in Columbus, Ohio, also succeeded the second time around. With a passion for inpatient medicine, she helped launched a hospitalist program in response to restrictions on residents’ hours at Ohio State University. Having just completed a residency herself, Dr. Tahboub struggled with her lack of experience and, she felt, credibility to lead the program.

“I felt I wasn’t being heard, that I had no autonomy or support,” she says. “When my mentor, the program director of family practice residency at Grant, contacted me to establish a hospitalist program there, I took the challenge.”

The Hospital Executive’s Vantage Point

A hospital’s executives decide when to implement a hospitalist program and how much they’re willing to pay for it. Understanding what they’re thinking as they fashion an inpatient service is important. Here’s what drifts across their radar screens as they decide how to proceed:

  • Why do we need hospitalists? Common reasons include cost pressures, demands from community doctors unwilling to provide 24/7 coverage for their hospitalized patients, the need to cover unassigned patients, managing patient flows in the ED, and problems with efficient handling of admissions and discharges.
  • How can hospitalists improve our bottom line and care quality ratings? The answers vary but common goals include better use of resources leading to reduced costs per case and length of stay, high patient satisfaction ratings because physicians are readily available, better compliance with core measures and evidence-based guidelines, and opportunities to gain market share.
  • What model will work for us? Choices include hiring their own hospitalists or contracting with one or more local hospital medicine groups, a regional/national hospitalist only or multi-specialty physician group, or outsourcing to medical recruiters.
  • Should we build in-house or outsource? That depends on whom they know and trust. Academic medical centers with stellar graduating residents/chief residents may approach those physicians and let them build the program. Administrators with out-of-control patient volumes, attendings who won’t cover calls, or a large number of unassigned cases may need to contract with outsiders for fast relief.
  • How will we pay for this? Administrators know their local norms and that they have to pay competitive salaries to attract hospitalists. The hospital setting (academic medical versus community hospital), local competition, and community quality of life/workload factor in. The rule of thumb is $75,000 per full-time hospitalist beyond the offset of fees, and a minimum of six hospitalists to provide 24/7 coverage.—MP

Dr. Tahboub evaluated her management style, realizing that she values communication and congeniality with colleagues, getting input and analysis before moving ahead, and flexibility in dealing with obstacles. Citing the example of night call, she explains that hospitalists started with day hours only, leaving residents swamped at night and needing an attending physician.

“We [hospitalists] all talked about it,” says Dr. Tahboub. “While we weren’t thrilled to take night call, we each agreed to cover every fourth night because it was necessary for us to do so.”

Dr. Tahboub also had to figure out how to integrate two previously hired nurse practitioners (NPs) into the hospitalist service. “At first we were unsure how to work with them, but we learned that they enable us to see up to 17 patients on average per day rather than the 12-15 without them. They help us with ED admissions, patient education, and discharges,” says Dr. Tahboub. “The hospitalists love having NPs around and it has become a recruiting point in our favor.”

A recent hire—an office manager—helps the physicians keep paperwork on track.

Hindsight

Looking back, the professionals who have started hospitalist programs have some important lessons to share. Discerning the practice climate, both internal and external, is task number one.

“Make sure you understand the political climate in which you are starting the program, give community doctors time to get used to the idea, expect hospitalist turnover in the early stages, and be ready to hire new hospitalists quickly as demand builds,” advises Michael Pistoria, DO, chief of hospital medicine at Lehigh Valley Hospital and Health Network, Allentown, Pa.

Dr. Tahboub emphasizes the importance of hiring hospitalists in tune with the internal practice climate. “Rigid rules don’t work with us, and some physicians can’t tolerate the amount of flexibility in our program,” she notes.

For executives such as Sinai’s Malgoza, speaking with administrators at other institutions and going to conferences to learn about different hospitalist models helps design a program that fits the hospital’s culture.

Dallas Presbyterian’s Dr. Fitzgerald focuses on hiring great physicians. “Hire the best doctors from the best training programs you can,” he says. “Hiring warm bodies just doesn’t cut it. If you have poor quality docs someone else will take your spot.”

Dr. Fitzgerald also advises that slow program growth allows the chief hospitalist to find physicians who mesh with the group’s personalities and culture. “Find those who want a career as hospitalists rather than those putting in a year or two,” he concludes.

Dr. Borik points out that the hospitalist movement has boomed since she started in the 1990s, with hospitals much more in tune with hospitalist values because they save money and rates for malpractice insurance.

“After you’ve done the groundwork the program can operate like a well-oiled machine to accommodate physicians who want to work in this specialty,” she says, cautioning that ”we can’t ever forget that we don’t own the patients. Their loyalty is to their PCPs. If we drop the ball, either in service or communication, we can lose them.” TH

Marlene Piturro wrote about hospital business drivers in the March 2006 issue.

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