Editor’s note: Second of a two-part series.
Many issues that influence hospitalist budgets, specifically the amount of financial support provided by the hospital, are common in most HM practices. Last month I addressed issues related to collecting professional fee revenue (see “Budget Checkup,” October 2009, p. 54). This month I’ll turn to operations that have a significant influence on the practice’s financial picture.
Staffing and Scheduling
My experience is that hospitalists think carefully about the effect of their chosen schedule on a physician’s lifestyle (e.g., make HM a career path and minimize the risk of burnout) and patient-hospitalist continuity. But rarely do I find evidence that the group has acknowledged the effect of their schedules on the budget.
Here’s a common example. As patient volume grows, most groups find that the volume of admissions from late in the afternoon to around 10 or 11 p.m. is too high for one doctor to manage. So the group decides to add an evening shift (often called a “swing shift”). And because all previous shifts in the practice have been 12 hours long, they decide to make the evening shift last 12 hours as well. Many groups adhere to this physician schedule even if patient volume only requires evening-shift coverage from 5 p.m. until around 10 or 11 at night. By choosing a 12-hour evening shift, rather than the five or six hours that are really needed, the practice may be paying for about six hours of unnecessary coverage each day. Six hours more per day is 42 hours per week; I don’t have to tell you that this system can get really expensive very quickly.
Another common example: A group that uses a seven-on/seven-off schedule will add two new full-time equivalent (FTE) employees at the same time to preserve the symmetry required by the schedule, even if patient volume justifies adding only 0.5 to 1.0 FTE.
My point in these examples is not to suggest the right schedule for your group, but to provide a reminder that the schedule has a significant impact on the budget (see “Staffing Strategies,” January 2007, p. 50).
Physician assistants and nurse practitioners, which I refer to collectively as non-physician providers (NPPs), can make valuable contributions to hospitalist practices. Just as it would do for an MD hospitalist, a practice should assess NPP contribution to important metrics, such as quality of care, throughput, stakeholder satisfaction, and practice economics. I have worked with practices that never give much thought to whether their NPPs occupy the right roles in the practice—positions that allow NPPs to make significant, cost-effective, and career-satisfying contributions.
A simple exercise that can be very helpful is to determine the total cost to employ NPPs (salary and benefits) and think about whether the practice would be better off if those dollars were spent on physicians. If the return on investing in NPPs is less than the return on investing in physicians, the practice should consider adjusting the NPPs’ roles and/or schedules (see “Role Refinement,” September 2009, p. 53).
I’m not suggesting that the only measure of NPP value is in dollars or professional fee revenue billed. Instead, the group’s return on investment should be viewed broadly and include things that don’t appear in financial statements, such as quality, efficiency, patient satisfaction, etc.