Five years ago, the hospitalist concept was so new it didn't have a name.
After a slow start, the trend appears to be gaining momentum and adherents, winning support from physicians, patients and hospital administrators alike. Once viewed as an economic liability, physicians who work exclusively with hospitalized patients can help improve the quality of care, reduce lengths of stay and even in some cases boost the bottom line, proponents say.
Indeed, it is now estimated that as many as 5,000 physicians focus full time on hospitalized patients-a giant leap from the several hundred such specialists working in the U.S. as recently as 1996. That was the year the term hospitalist was coined by Robert Wachter, M.D., who helped create a model program for the specialty at the University of California San Francisco Medical Center.
He and others who have closely followed this trend believe that the number could reach 20,000 to 25,000 by the end of the decade, making the specialty about the same size as cardiology.
"What has happened over the past five years has been extraordinary," says Wachter, who attached a name to the specialty in an August 1996 article in the New England Journal of Medicine. "More importantly, the concerns that both physicians and patients expressed have tended to markedly decrease over the years. Those concerns have been replaced by considerable-though not unanimous-support."
Wachter, associate chairman of the department of medicine at UCSF, says there also is a growing body of research indicating that the hospitalist model helps improve clinical outcomes and reduce overall costs by as much as 15%. A 1998 study by the Washington-based Advisory Board Co., a healthcare think tank, found that hospitalists have been able to reduce the lengths of stay an average of 19% during the last few years.
The model, used in one form or another for at least the past couple of decades by a relative handful of hospitals, was propelled in recent years by HMOs seeking ways to strictly manage care in a hospital setting. In rare cases, primary-care physicians once were required to hand off their patients to hospitalists, a mandate that created a backlash.
Now, an almost exclusively voluntary system has won widespread support from the very segment that opposed hospitalists in the first place-primary-care physicians who now are more inclined to focus on outpatient care. Moreover, Wachter says, surveys consistently show that hospitalist programs do not lead to a decline in patient satisfaction.
"In the old days, the push against this hospitalist model came from doctors," says Wachter, immediate past president of the National Association of Inpatient Physicians. "I used to get calls from hospital directors who said, `We think this is a good thing for our systems-can you help us convince doctors of this?' Now, I'm hearing from systems that say their doctors are demanding they create a hospitalist program."
Of course, part of this reversal is based on simple economics. Primary-care physicians are admitting fewer and fewer patients to the hospital, making it harder to justify the time required to see one or two patients. By concentrating on outpatient care, physicians can spend more time on office visits and thus potentially increase their income.
At the same time, in an era when hospital stays are becoming shorter and more intense, hospitalists can provide better-focused care than primary-care doctors who rarely treat complicated cases, some experts say.
The model has not won universal acceptance. Some physicians are concerned about the gradual erosion of their clinical skills if they hand off patients to a facility that provides hospitalists but later must care for their own inpatients at other facilities. There is also the question of the delicate bond between a patient and a primary-care physician.
"There's a level of trust that has developed between a patient and their physician, and all of a sudden, when the patient is at their most vulnerable, this physician isn't going to be there," says Matt Nash, an obstetrician-gynecologist in Chicago. "Just in terms of patients and the continuity of care, it can be a problem."
When Wachter helped found the national association of hospitalists in 1997, it had 150 members. By 1999, there were about 800 members. Today, the association has more than 2,000 members in about 500 hospitals, including such leading facilities as Boston's Beth Israel Deaconess, the Cleveland Clinic, the Mayo Clinic and the University of Illinois at Chicago Medical Center. All told, about 1,000 hospitals use the model with some mix of patients, Wachter says.
In a survey two years ago, the national association found that 35% of hospitalists are employed by medical groups, 23% by hospitals, 14% by managed-care organizations and about 12% are self-employed. Some 16% earn salaries through a combination of those arrangements.
Some hospitals now are outsourcing their hospitalist programs, depending on the expertise of outfits such as North Hollywood, Calif.-based IPC-The Hospitalist Co. and Cogent Healthcare of Laguna Hills, Calif., which provides networks of hospitalists but also contracts directly with facilities. Both companies provide support services and staffing, data management and other hospitalist-related services.
Cogent has contracts in 15 markets across the nation, covering about 2,700 referring primary-care physicians and approximately 4 million lives, according to the company. Most of the company's contracts are now with managed-care plans. For instance, a health plan would contract with Cogent for its patients at a number of hospitals in any geographic area. The company says it had annual revenues of about $10 million in 2000.
Andrew Fishmann, M.D., a pulmonologist at Good Samaritan Hospital in Los Angeles who called himself an "intensivist" through the early 1990s, helped co-found Cogent after a group of doctors who were focusing on hospitalized patients got together to discuss their special niche. "The initial idea was for us to share ideas," he recalls. "Then, very quickly, we realized the opportunity for a business existed."
IPC, which claims about $45 million in revenue last year, is active in about seven cities across the U.S., including Chicago, Denver, Houston and Los Angeles. It employs 150 physicians and works with more than 4,000 referring doctors and approximately 1,000 health plans, the company says. Collectively, officials say, the practice locations admit more than 10,000 new patients a month and manage more than $1 billion in healthcare expenditures each year. "This has become the logical way to provide healthcare," says Adam Singer, M.D., chief executive officer and president of IPC, which has developed a handheld computer system to allow hospitalists to communicate directly with patients' primary-care physicians.
Baptist Hospital, a 492-bed facility in Pensacola, Fla., launched its Cogent-managed hospitalist program in January. Two key factors were responsible, says Craig Miller, M.D., senior vice president of medical affairs at Baptist Health Care Corp. With 12% of admissions unfunded and 16% of patients on Medicaid, the medical staff was being stretched too thin. What's more, local doctors seemed increasingly willing to hand off patients rather than travel 20 or 30 miles and take the time to see a single admitted patient.
"We felt we had a lot of incentives on the line to do something different," he says.
Baptist has three full-time hospitalists with an average daily census of 30 patients, or about 15% of total patient volume. Miller says start-up costs for the program amounted to about $200,000. The program, he says, "has already paid for itself" in the first three months.
After analyzing 447 discharges handled by the Cogent group, Miller says, Baptist found that its readmission rate was 6%-well below the national average of slightly more than 10%. He says the program "saves us about $650 in real costs per case" with no loss of patient or physician satisfaction. Meanwhile, Miller says, the average length of stay, case-mix-adjusted, has been reduced by a full day under the hospitalist program-falling from about four days to three.
"We wanted to have patients seen efficiently but at the same time make sure that the care necessary was given without impacting quality," Miller says. "With hospitalists, you can get good quality care and have good outcomes, and yet the cost per case can reflect a significant decrease over the traditional system."
Despite the rosy economic outlook at Baptist, many hospitalist programs are barely breaking even, Wachter says, and financing continues to present a fundamental problem for the fledgling specialty. Many hospitals often must absorb a slight loss because the revenue generated by the hospitalists usually does not cover the physicians' salaries and benefits.
Hospitalists often can bill only for a single evaluation and management code, even though they may have seen a patient two or three times a day and discussed treatment with everybody from a case manager and nursing supervisor to a specialist and the patient's primary-care physician. In the long run, though, the program benefits hospitals such as Baptist because of lower overall costs and reduced lengths of stay.
"This isn't a moneymaker," says Tim Pehrson, operations director at 293-bed McKay-Dee Hospital Center in Ogden, Utah, which will employ two full-time hospitalists of its own while receiving management help from Cogent. "We do not believe we will do any better than break even. There might even be a loss. But we think we can make up the difference through better efficiencies."
He says the salary for a full-time hospitalist ranges from $95,000 to as much as $150,000, with incentive bonuses amounting to as much as 25% of the base pay. Among those incentives is improving patient satisfaction scores. For its expertise, Cogent receives a fee on a per-case basis. Pehrson declined to disclose the specific figure.
Michael Brouthers, president of Cogent, says the new specialty is a way for hospitals to "take on the cost of medical care in a new and unique way." Traditionally, he says, hospitals have trimmed costs by depending on economies of scale, cutting staff or outsourcing departments such as respiratory therapy or the emergency room.
"Hospitals haven't been as successful in impacting physician behavior in positive ways," Brouthers says. "The hospitalist movement is a way to improve what is ordered at what time and in what setting-all of which have cost implications.
"The changes come from identifying inefficiencies or barriers that are creating inefficiencies," he says.
Ronald Greeno, M.D., Cogent's national medical director, says hospitalists are being rewarded for being efficient without sacrificing the quality of care. "They don't get penalized for being efficient doctors in a hospital. They're being rewarded for doing a good job and being efficient. The most efficient doctors in the hospital are also the best doctors. They know what to order, and they know how to order it.
"We have something here that results in higher (quality) patient care and less waste. When it comes to healthcare dollars, smart doctors know we're dealing with a limited quantity."