Hospitalist-Focused Strategies to Address Medicare's Expanded Quality, Efficiency Measures


Dr. Tierza

VBP. ACO. HAC. EHR. Suddenly, Medicare-derived acronyms are everywhere, and many of them are attached to a growing set of programs aimed at boosting efficiency and quality. Some are optional; others are mandatory. Some have carrots as incentives; others have sticks. Some seem well-designed; others seemingly work at cross-purposes.

Love or hate these initiatives, the combined time, money, and resources needed to address all of them could put hospitals and hospitalists under considerable duress.

“It can either prove or dismantle the whole hospitalist movement,” says Brian Hazen, MD, medical director of the hospitalist division at Inova Fairfax Hospital in Falls Church, Va. “Hospitals expect us to be agile and adapt to the pressures to keep them alive. If we cannot adapt and provide that, then why give us a job?”

Whether or not the focus is on lowering readmission rates, decreasing the incidence of hospital-acquired conditions, or improving efficiencies, Dr. Hazen tends to lump most of the sticks and carrots together. “I throw them all into one basket because for the most part, they’re all reflective of good care,” he says.

The basket is growing, however, and the bundle of sticks could deliver a financial beating to the unwary.

It’s possible that some low-margin hospitals that are facing big penalties could actually have their solvency threatened. If hospitals that are a vital part of the community are threatened with insolvency because of these programs, we may need to take a second look at how we structure the penalties.

—Win Whitcomb, MD, MHM, medical director of healthcare quality, Baystate Medical Center, Springfield, Mass.; SHM Performance and Measurement Reporting Committee member; co-founder and past president of SHM; author of The Hospitalist’s “On the Horizon” column

At What Cost?

For the lowest-performing hospitals, the top readmission penalties will grow to 2% of Medicare reimbursements in fiscal year 2014 and 3% in 2015. Meanwhile, CMS’ Hospital-Acquired Conditions (HAC) program will begin assessing a 1% penalty on the worst performing hospitals in 2015, and the amount withheld under the Hospital Value-Based Purchasing (VBP) program will reach 2% in 2017 (top-performing hospitals can recoup the withhold and more, depending on performance). By that year, the three programs alone could result in a 6% loss of reimbursements.

Win Whitcomb, MD, MHM, medical director of healthcare quality at Baystate Medical Center in Springfield, Mass., and a member of SHM’s Performance and Measurement Reporting Committee, estimates that by 2017, the total at-risk payments could reach about $10 million for a 650-bed academic medical center. The tally for a 90-bed community hospital, he estimates, might run a bit less than $1 million. Although the combined penalty is probably enough to get the attention of most hospitals, very few institutions are likely to be dinged for the entire amount.

Nevertheless, the cumulative loss of reimbursements could be a tipping point for hospitals already in dire straits. “It’s possible that some low-margin hospitals that are facing big penalties could actually have their solvency threatened,” Dr. Whitcomb says. “If hospitals that are a vital part of the community are threatened with insolvency because of these programs, we may need to take a second look at how we structure the penalties.”

The necessary investment in infrastructure, he says, could prove to be a far bigger concern—at least initially.

“What is more expensive is just putting out the effort to do the work to improve and perform well under these programs,” says Dr. Whitcomb, co-founder and past president of SHM and author of The Hospitalist’s “On the Horizon” column. “That’s a big unreported hidden expense of all of these programs.”

With the fairly rapid implementation of multiple measures mandated by the Accountable Care Act, Medicare may be disinclined to dramatically ramp up the programs in play until it has a better sense of what’s working well. Then again, analysts like Laurence Baker, PhD, professor of health research and policy at Stanford University, say it’s doubtful that the agency will scale back its efforts given the widely held perception that plenty of waste can yet be wrung from the system.

“If I was a hospitalist, I would expect more of this coming,” Dr. Baker says.

Of course, rolling out new incentive programs is always a difficult balancing act in which the creators must be careful not to focus too much attention on the wrong measure or create unintended disincentives.

“That’s one of the great challenges: making a program that’s going to be successful when we know that people will do what’s measured and maybe even, without thinking about it, do less of what’s not measured. So we have to be careful about that,” Dr. Baker says.

We’re getting a lot of traction to get physicians to work together to improve care, where before there wasn’t an incentive to do this. So we see this as a good thing, and I think it has potential to reduce expenses in high-cost areas.

—Monty Duke, MD, chief physician executive, Lancaster General Hospital, Lancaster, Pa.

Out of Alignment

Beyond cost and infrastructure, the proliferation of new measures also presents challenges for alignment. Monty Duke, MD, chief physician executive at Lancaster General Hospital in Lancaster, Pa., says the targets are changing so rapidly that tension can arise between hospitals and hospitalists in aligning expectations about priorities and considering how much time, resources, and staffing will be required to address them.

Likewise, the impetus to install new infrastructure can sometimes have unintended consequences, as Dr. Duke has seen firsthand with his hospital’s recent implementation of electronic health records (EHRs).

“In many ways, the electronic health record has changed the dynamic of rounding between physicians and nurses, and it’s really challenging communication,” he says. How so? “Because people spend more time communicating with the computer than they do talking to one another,” he says. The discordant communication, in turn, can conspire against a clear plan of care and overall goals as well as challenge efforts that emphasize a team-based approach.

Despite federal meaningful-use incentives, a recent survey also suggested that a majority of healthcare practices still may not achieve a positive return on investment for EHRs unless they can figure out how to use the systems to increase revenue.1 A minority of providers have succeeded by seeing more patients every day or by improving their billing process so the codes are more accurate and fewer claims are rejected.

Similarly, hospitalists like Dr. Hazen contend that some patient-satisfaction measures in the HCAHPS section of the VBP program can work against good clinical care. “That one drives me crazy because we’re not waiters or waitresses in a five-star restaurant,” he says. “Health care is complicated; it’s not like sending back a bowl of cold soup the way you can in a restaurant.”

Increasing satisfaction by keeping patients in the hospital longer than warranted or leaving in a Foley catheter for patient convenience, for example, can negatively impact actual outcomes.

“Physicians and nurses get put in this catch-22 where we have to choose between patient satisfaction and by-the-book clinical care,” Dr. Hazen says. “And our job is to try to mitigate that, but you’re kind of damned if you do and damned if you don’t.”

A new study, on the other hand, suggests that HCAHPS scores reflecting lower staff responsiveness are associated with an increased risk of HACs like central line–associated bloodstream infections and that lower scores may be a symptom of hospitals “with a multitude of problems.”2

A 10-Step Program

As existing rules and metrics are revised, new ones added, and others merged or discontinued, hospitalists are likely to encounter more hiccups and headaches. So what’s the solution? Beyond establishing good personal habits like hand-washing when entering and leaving a patient’s room, hospitalist leaders and healthcare analysts point to 10 strategies that may help keep HM providers from getting squeezed by all the demands:

1) Keep everyone on the same page. Because hospitals and health systems often take a subset of CMS core measures and make them strategic priorities, Dr. Whitcomb says hospitalists must thoroughly understand their own institutions’ internal system-level quality and safety goals. He stresses the need for hospitalists to develop and maintain close working connections with their organization’s safety- and quality-improvement (QI) teams “to understand exactly what the rules of the road are.”

Dr. Whitcomb says hospitals should compensate hospitalists for time spent working with these teams on feasible solutions. Hospitalist representatives can then champion specific safety or quality issues and keep them foremost in the minds of their colleagues. “I’m a big believer in paying people to do that work,” he says.

2) Take a wider view. It’s clear that most providers wouldn’t have chosen some of the performance indicators that Medicare and other third-party payors are asking them to meet, and many physicians have been more focused on outcomes than on clinical measures. Like it or not, however, thriving in the new era of health care means accepting more benchmarks. “We’ve had to broaden our scope to say, ‘OK, these other things matter, too,’” Dr. Duke says.

3) Use visual cues. Hospitalists can’t rely on memory to keep track of the dozens of measures for which they are being held accountable. “Every hospitalist program should have a dashboard of priority measures that they’re paying attention to and that’s out in front of them on a regular basis,” Dr. Whitcomb says. “It could be presented to them at monthly meetings, or it could be in a prominent place in their office, but there needs to be a set of cues.”

4) Use bonuses for alignment. Dr. Hazen says hospitals also may find success in using bonuses as a positive reinforcement for well-aligned care. Inova Fairfax’s bonuses include a clinical component that aligns with many of CMS’s core measures, and the financial incentives ensure that discharge summaries are completed and distributed in a timely manner.

5) Emphasize a team approach. Espousing a multidisciplinary approach to care can give patients the confidence that all providers are on the same page, thereby aiding patient-satisfaction scores and easing throughput. And as Dr. Hazen points out, avoiding a silo mentality can pay dividends for improving patient safety.

Dr. Tierza

6) Offer the right information. Tierza Stephan, MD, regional hospitalist medical director for Allina Health in Minneapolis and the incoming chair of SHM’s Practice Analysis Committee, says Allina has worked hard to ensure that hospitalists complete their discharge summaries within 24 hours of a patient’s release from the hospital. Beyond timeliness, the health system is emphasizing content that informs without overwhelming the patient, caregiver, or follow-up provider with unnecessary details.

The discharge summary, for example, includes a section called “Recommendations for the Outpatient Provider,” which provides a checklist of sorts so those providers don’t miss the forest for the trees. The same is true for patients. “The hospital is probably not the best place to be educating patients, so we really focus more on patient instruction at discharge and then timely follow-up,” Dr. Stephan says.

In addition to allowing better care coordination between inpatient and outpatient providers, she says, “it cuts across patient experience and readmissions, and it helps patients to be engaged because they have very clear, easy-to-read information.” Paying attention to such details may have outsized impacts: In a recent study, researchers found that patients who are actively engaged in their own health care are significantly less costly to treat, on average.3

7) Follow through after discharge. Inova Fairfax is setting up an outpatient follow-up clinic as a safety net for patients at the highest risk of being readmitted. Many of these target patients are uninsured or underinsured and battling complex medical problems like heart failure or pneumonia. Establishing a physical location for follow-ups and direct communication with primary-care providers, the hospital hopes, might reduce noncompliance among these outpatients and thereby curtail subsequent readmissions.

8) Optimize EHR. When optimized, experts say, electronic medical records can help hospitals ensure that their providers are following core measures and preventing hospital-acquired conditions while leaving channels of communication open and keeping revenue streams flowing.

“Luckily, we just switched to electronic medical records so we can monitor who has a Foley catheter in, who does or doesn’t have DVT prophylaxis, because even really good docs sometimes make these knucklehead mistakes every once in a while,” Dr. Hazen says. “So we try to use systems to back ourselves up. But for the most part, there’s just no substitute for having good docs do the right thing and documenting that.”

9) Bundle up. Although bundled payments represent yet another CMS initiative, Dr. Duke says the model has the potential to reduce waste, standardize care, and monitor outcomes. Lancaster General has been working on the approach for the past few years, with an initial focus on cardiovascular medicine, orthopedics, and neurosurgery. “We’re getting a lot of traction to get physicians to work together to improve care, where before there wasn’t an incentive to do this,” Dr. Duke says. “So we see this as a good thing, and I think it has potential to reduce expenses in high-cost areas.”

10) Connect the dots. Joane Goodroe, an independent healthcare consultant based in Atlanta, says CMS expects providers to connect the dots and combine their efforts in the separate incentive programs to maximize their resources. By providing consistent care coordination and setting patients on the right track, then, she says hospitalists might help boost savings across the board—a benefit that wouldn’t necessarily be apparent based solely on improved quality metrics in specific programs.

Even here, though, the current fee-for-service model can create awkward side effects. For example, Goodroe recommends following the path that many care groups delving into accountable care and bundled payment systems are already taking: connecting those models to efforts aimed at reducing hospital readmissions. Without the proper financial incentives, however, those efforts may be constrained due to a significant increase in expended resources and a potential decrease in overall revenues.

Some of the kinks may work themselves out of the system over time, but experts say the era of multiple metrics—and additional pressure—is just beginning. Combined, they will require providers to be much better at working as a system and coordinating care across multiple environments beyond the hospital, Dr. Stephan says.

One main question boils down to this, she says: “How do we get more efficient as a system and eliminate waste? I think the hospitalists really play a vital role, and it’s mainly through communication and transfer of information. Hospitalists have to be really well-connected with the different physicians and venues that send the patients into the hospital so that we’re not duplicating services and so that we can get right to the crux of the problem.”

Doing so, regardless of which CMS program is on tap, may be the very best way to avoid getting squeezed.

Bryn Nelson is a freelance medical writer in Seattle.


  1. Adler-Milstein J, Green CE, Bates DW. A survey analysis suggests that electronic health records will yield revenue gains for some practices and losses for many. Health Affairs. 2013;32(3):562-570.
  2. Saman DM, Kavanagh KT, Johnson B, Lutfiyya MN. Can inpatient hospital experiences predict central line-associated bloodstream infections? PLoS ONE. 2013;8(4):e61097.
  3. Hibbard JH, Greene J, Overton V. Patients with lower activation associated with higher costs; delivery systems should know their patients’ ‘scores.’ Health Affairs. 2013; 32(2):216-222.

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