Practice Economics

John Nelson, MD: A New Hospitalist


John Nelson, MD, MHM
In the first few years, we never thought about developing clinical protocols or measuring our efficiency or clinical effectiveness.

Ben was just accepted to med school!!! Hopefully, more acceptances will be forthcoming. We are very proud of Ben for all his hard work. Another doctor in the family.

I was delighted to find the above message from an old friend in my inbox. It got me thinking: Will Ben become a hospitalist? Will he join his dad’s hospitalist group? Will his dad encourage him to pursue a hospitalist career or something else?

Early Hospitalist Practice

The author of that email was Ben’s dad, Chuck Wilson. Chuck is the reason I’m a hospitalist. He was a year ahead of me in residency, and while still a resident, he somehow connected with a really busy family physician in town who was looking for someone to manage his hospital patients. Not one to be bound by convention, Chuck agreed to what was at the time a nearly unheard-of arrangement. He finished residency, joined the staff of the community hospital across town from our residency, and began caring for the family physician’s hospital patients. Within days, he was fielding calls from other doctors asking him to do the same for them. Within weeks of arriving, he had begun accepting essentially all unassigned medical admissions from the ED. This was in the 1980s; Chuck was among the nation’s first real hospitalists.

I don’t think Chuck spent any time worrying about how his practice was so different from the traditional internists and family physicians in the community. He was confident he was providing a valuable service to his patients and the medical community. The rapid growth in his patient census was an indicator he was on to something, and soon he and I began talking. He was looking for a partner.

In November of my third year of residency, I decided I would put off my endocrinology fellowship for a year or two and join Chuck in his new practice. From our conversations, I anticipated that I would care for exactly the kinds of patients that filled nearly all of my time as a resident. I wouldn’t need to learn the new skills in ambulatory medicine, and wouldn’t need to make the long-term commitment expected to join a traditional primary-care practice. And I would earn a competitive compensation and have a flexible lifestyle. I soon realized that hospitalist practice provided me with all of these advantages, so more than two decades later, I still haven’t gotten around to completing the application for an endocrine fellowship.

A Loose Arrangement

For the first few years, Chuck and I didn’t bother to have any sort of legal agreement with each other. We shook hands and agreed to a “reap what you till” form of compensation, which meant we didn’t have to work exactly the same amount, and never had disagreements about how practice revenue was divided between us.

Because of Chuck’s influence, we had miniscule overhead expenses, most likely less than 10% of revenue. We each bought our own malpractice insurance, paid our biller a percent of collections, and rented a pager. That was about it for overhead.

We had no rigid scheduling algorithm, the only requirement being that at least one of us needed to be working every day. Both of us worked most weekdays, but we took time off whenever it suited us. Our scheduling meetings were usually held when we bumped into one another while rounding and went something like this:

“You OK if I take five days off starting tomorrow?”

“Sure. That’s fine.”

Meeting adjourned.

For years, we had no official name for our practice. This became a bigger issue when our group had grown to four doctors, so we defaulted to referring to the group by the first letter of the last name of each doctor, in order of tenure: The WNKL Group. A more formal name was to follow a few years later when the group was even larger, but I’ve taken delight in hearing that WNKL has persisted in some places and documents around the hospital years later, even though N, K, and L left the group long ago.

In the first few years, we never thought about developing clinical protocols or measuring our efficiency or clinical effectiveness. Chuck was confident that compared to the traditional primary-care model, we were providing higher-quality care at a lower cost. But I wasn’t so sure. After a few years, we began seeing hospital data showing that our cost per case tended to be lower, and what little data we could get regarding our quality of care suggested that it was about the same, and in some cases might be better.

A principal reason the practice has survived more than 25 years is that other than a small “tax” during their first 18 months (mainly to cover the cost of recruiting them), new doctors were regarded as equals in the business. Chuck and subsequent doctors never tried to gain an advantage over newer doctors by trying to claim a greater share of the practice’s revenue or decision-making authority.

Chuck is still in the same group he founded. In 2000, I was lured away by the chance to start a new group and live in a place that both my wife and I love. He and I have enjoyed watching our field grow up, and we take satisfaction in our roles in its evolution.

Lessons Learned

The hospitalist model of practice didn’t have a single inventor or place of origin, and anyone involved in starting a practice in the 1980s or before should be proud to have invented their practice when no blueprint existed. Creative thinking and openness to a new way of doing things were critical in developing the first hospitalist practices. They also are useful traits in trying to improve modern hospitalist practices or other segments of our healthcare system.

Like many new developments in medicine, the economic effects of our practice—lower hospital cost per case—became apparent, especially to Chuck, before data regarding quality surfaced. I wish we had gotten more serious early on about capturing whatever quality data might have been available—clearly less than what is available today—and those in new healthcare endeavors today should try to measure quality at the outset. Unlike the 1980s, the current marketplace will help ensure that happens.


There is one other really cool thing about Chuck’s email at the beginning of this column: those three exclamation points! Chuck is typically laconic and understated, and not given to such displays of emotion, but there are few things that generate more enthusiasm than a parent sharing news of a child’s success.

So, Ben, as you start med school next year, I wish you the best. You can be sure I’ll be asking for updates about your progress. The most important thing is that you find a life and career that engages you to do good work for others and provides satisfaction. And whatever you choose to do after med school, I know you’ll continue to make your parents proud.

Dr. Nelson has been a practicing hospitalist since 1988. He is co-founder and past president of SHM, and principal in Nelson Flores Hospital Medicine Consultants. He is course co-director for SHM’s “Best Practices in Managing a Hospital Medicine Program” course. Write to him at

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