This couldn’t happen to hospitalists, could it? Well, shockingly, 35% and 37% of hospitalist group leaders said they did not know their group’s annual professional fee revenues and expenses, respectively. It is, therefore, likely many leaders do not know the more granular data points necessary to have long-term success (i.e., payer mixes, service line profit margins, rates of quality adherence and reimbursement and denial rates). To understand the potential implications of not knowing your business, look no further than the current crisis on Wall Street.
The old saw about not putting all your eggs in one basket seems as applicable to the credit crisis as it is to your retirement accounts. The more traditional banking institutions, such as Bank of America, appear as if they will survive in large part because they remained diversified. Although they engaged in sub-prime mortgages, they also maintained a large commercial banking operation that deposited savings and kept them in holding. The upshot? When creditors came calling, Bank of America had plenty of cash on hand.
I’m not suggesting hospitalist groups open a savings and loan, rather we diversify the services we offer to help soften potential future turmoil. I often hear from hospitalists who don’t want co-management, as it is not traditional medicine and it may subjugate them to their surgical colleagues. While the latter point is valid and must be mitigated, surgical co-management, stroke services, observation units, palliative care services, and preoperative clinics all serve as potential markets for diversification. We cannot predict how future market forces (e.g., Medicare coverage changes, payment bundling, disproportionate share cuts, etc.) will impact our practice; but we can increase our chances of future success by diversifying our business portfolio.
Although clinical diversification is important, don’t forget to grow your quality service line. I strongly believe those that can impact quality in meaningful and measurable ways will win in the end. Once the hospitalist market saturates, there will be competition and groups that have a track record for systematically improving outcomes will be the ones who continue to garner hospital funding.
I fundamentally believe in the strength of the hospitalist movement and doubt our business will ever experience the type of calamity that has ensnared the financial sector. However, it behooves us to learn from our fallen Wall Street brethren, lest we someday find ourselves sweeping the streets alongside them. TH
Dr. Glasheen is associate professor of medicine at the University of Colorado Denver, where he serves as director of the hospital medicine program and the hospitalist Training program, and as associate program director of the Internal Medicine Residency Program.