For those of you who were kind enough to pick up my column in The Hospitalist last month (see “A Critical First Step,” p. 56), you spent a few minutes reading my thoughts on the value of hospitalists. I mentioned the fact that the U.S. is moving rapidly toward a value-based system to purchase healthcare and that all healthcare providers, including hospitalists, will be increasingly judged on the value of care they deliver to their patients and the healthcare system. (Remember, value=quality÷cost.)
I believe that the hospitalist programs that are going to be the most successful are those that are able to continually measure their quality and costs, allowing them to make improvements. These are the groups that will understand their own performance well before others make their “value” judgments.
In his famous book “The Wealth of Nations,” 18th-century economist Adam Smith used the example of a pin factory to show how specialization improved human productivity. The process of producing a pin was broken down into many small tasks, each done by a different “specialist.” This resulted not only in increased efficiency, but also increased productivity. The factory was then able to reinvest the profits in even more efficient machinery, which was able to reduce labor costs. The lower cost for pins was a benefit, and it was spread across the entire population.
We have seen similar examples in American healthcare. In many American hospitals, the images of CT scans performed during nighttime hours are transmitted to India and other Asian countries where highly trained radiologists interpret the scans and transmit their interpretations back to the physicians caring for the patients. Like the pin factory workers, these radiologists are specialists with unique skills; they operate specialized machinery to make the system more efficient with resultant lower costs. At the level of the individual patient, this system means getting test results back in a more timely fashion. Increased quality and lower costs: These are high-value providers.
It should be obvious to us that hospitalists are “specialists.” While most hospitalists are trained as general internists, pediatricians, and family physicians, you and I are “specialists” who focus our efforts on the care of hospitalized patients. In the late 1990s, much was made of the fact that hospitalists were able to reduce hospital costs because of decreased length of stay (LOS) for patients, without any adverse effects on clinical outcomes. Today, hospitalists number more than 30,000 nationwide, and virtually all American hospitals with more than 200 beds have hospitalists.
Hospitals hired hospitalists in droves because they were perceived as “inpatient specialists” who were able to reduce the cost of healthcare delivery. Like lower pin costs, this economic benefit was spread across the entire population. Hospitalist “value” went up because of lower costs.
But an interesting thing changed over the past decade: It seems that fewer and fewer people are talking about hospitalists reducing LOS. They just expect it. LOS is raised as an issue only if it goes up. In many hospitals, the budget now takes into account the average LOS based on hospitalist care. (I suspect that in 18th-century Scotland, people also grew accustomed to the lower cost of pins, and grew to expect it, and the cost of pins was raised as an issue only if the price went up.)