HOSPITALS/PROVIDERS: Hospitalists save money

Over the last 10 years, the hospitalist movement has been growing from a small base in the US. In fact most countries have had hospitalists for decades and use their community-based GPs to refer patients to their hospital-based specialists. In the US where community-based physicians have held sway politically over hospital-based ones, the movement to get those community-based doctors to hand over their patients to the hospital has been proceeding slowly.

This has all been bound up in one of the basic anomalies of American health care. The physician gets paid some modified form of fee-for-service, so the more they do the more they get. However, since the early 1980s, the hospital gets a lump sum per admission (DRG-based), so its best interest is to kick the patient out as soon as possible. This inherent contradiction has been part of the reason that hospitals and doctors have had a slow-burn conflict over the years.

The hospitalist may be the solution. The hospitalist works for the hospital. While they usually bill insurers and Medicare less than their total salary costs, hospitals like employing the hospitalists because overall they save them much more by discharging patients earlier with no increase in readmissions. The results proving this are starting to come in. A new study in The American Journal of Managed Care compared an academic medical center in Iowa which had hospitalists managing patients alongside community and academic physicians. The patients treated by the hospitalists had similar (in fact slightly better) outcomes, but much shorter LOS and much lower costs.

Some community physicians also like the hospitalists, as they find they can make more money staying in their offices than they can bill by going to the hospital, and they don’t have to bother with the travel. But overall in health care old habits die hard, so expect this trend to continue to gain traction only slowly.

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