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Hospital Finances Inpatient Practice

You Can’t Pay Hospitalists By The RVU

Every year about this time, hospitalists begin their contract negotiation with hospitals for the upcoming fiscal year. I’ve been on both sides of the negotiation table over the past 20 years. As with any negotiation, to be really successful, one party needs to not only know what the other party really wants but they need to know what it is they, themselves, really want. All too often, because we know neither what the other side wants nor what it is that we really want, we fall back on negotiating about money. The problem is that money is often not the most important thing that either side values.

What the hospital really wants:

  1. A positive financial margin at the end of the year. This is what the Board of Trustees really cares about and you can improve the margin in two ways: increase your revenue or decrease your expenses. But sometimes spending a little more on one expense item/department can greatly reduce the expense of another item/department. This becomes very difficult because large hospitals are often administratively compartmentalized and each compartment is held individually accountable for its financial bottom line and often for the hospital to make money overall, one compartment has to lose money. If the hospitalist is trying to see as many patients as possible and pump out as much in billings, then this may or may not be in alignment with the hospital margin. By paying a little more for the hospitalist, the hospital can often save more money if the extra amount of time that the hospitalist can now spend on the patient translates into a shorter stay and less expensive testing.
  2. Higher patient satisfaction. This is one of the publicly reported measures that hospitals are judged and compared to each other on the Medicare Hospital Compare website. If the hospitalist is primarily motivated by patient volume, what the patient thinks about the hospitalist (or the hospital) becomes relatively unimportant. RVUs are a quantity contest, not a popularity contest.
  3. Shorter length of stay. A shorter length of stay results in a more positive financial margin. If you can get a patient out of the hospital one day earlier, then that patient doesn’t consume expensive hospital resources (medications, lab tests, nursing time, meals, etc.) and, more importantly, you can get another paying patient in that room quicker. If the hospitalist’s goal is to maximize RVUs, then it can be paradoxically better for that hospitalist to keep the patient in the hospital one more day because that extra day in the hospital will involve relatively little time on the hospitalist’s part thus resulting in earning low-effort RVUs.
  4. Lower readmission rates. The hospital is penalized if 30-day readmission rates are excessively high. The hospitalist is rewarded if the 30-day readmission rate is high: it not only means more RVUs, but you can copy most of your previous history and physical exam making the admission quick with more low-effort RVUs. One of the key drivers in whether a patient gets readmitted shortly after discharge is the amount of time and effort spent in the discharge process. If the hospitalist has the time it takes to personally speak with the patient’s primary care physician, do a careful medication reconciliation, and ensure that all post-hospital tests and appointments are scheduled, that patient is less likely to be readmitted. The problem is that the hospitalist is going to get paid the same amount in RVUs whether or not they go to all of that extra effort to ensure a good discharge.
  5. Patients being discharged from the hospital earlier in the day. From the hospital’s perspective, an earlier discharge hour means that another patient can fill that bed earlier from either the ER or the OR and so patients don’t have to wait as long in the post-op recovery room or in the ER to get a bed. From the hospitalist’s standpoint, getting those patients out earlier in the day means that he/she will have to work a lot more intensely early in the morning and if paid by the RVU, you end up with the same amount of money in your pocket whether you discharge that patient at 10:00 AM or 4:00 PM and it is a lot easier to take your time and get the patient out at 4:00.
  6. Higher case mix index. The higher the case mix index (a measure of the severity of disease of the patient), the more the hospital gets paid. The case mix index also affects the publicly reported mortality index  (mortality rate adjusted for case mix index). So, the hospital wants a higher case mix index and the only way to do this for non-surgical admissions is for the physician to document all of the little co-mobidities that the patient had on admission (such as hypomagnesemia, malnutrition, etc.). When paid by the RVU, the hospitalist is not motivated to go to the extra effort to document all of these co-morbidities because he/she is going to be paid the same and ferreting out all of these (often obscure and unimportant) findings takes extra time and effort.
  7. Patients moved out the ER to the floor rapidly. The hospital has to report the amount of time the patient spends in the ER waiting for a bed and needs to keep that number as low as possible to avoid public embarrassment. Furthermore, the quicker the hospital can get that patient out of the ER, the sooner another patient can be placed into that ER room. To do this, the hospitalist needs to see the patient and write orders on the patient so that the patient can move from the ER to the nursing unit. The hospitalist who is paid by the RVU could not care less how quickly the patient gets out of the ED since they get paid the same, regardless.
  8. Avoidance of unnecessary expensive tests and treatments. For the hospital, fewer tests on inpatients equates to a higher financial margin. The hospitalist paid by the RVU could not care less.
  9. Lower mortality index. Neither the hospital nor the hospitalist wants to have one of their patients die. But patients are going to die, regardless. Most of the patients who die in our hospital are “DNR-CC” or “DNR-CCA”, meaning that they are anticipated to die and have elected to not be resuscitated when their heart and lungs stop working. There are two ways to lower your mortality index: (1) increase your case mix index by documenting all of the obscure co-morbidities or (2) get the patient to die somewhere other than in your hospital, most commonly at an inpatient hospice facility. For most of these patients, dying at home is neither practical nor desired by the family. If a DNR patient dies in your hospital, it is included in the hospital’s mortality rate but if that same patient dies at a separate inpatient hospice, the death doesn’t count against the hospital’s mortality rate. Once again, the mortality index is publicly reported on the Medicare Hospital Compare website. For the hospitalist paid by the RVU, arranging the transfer of a dying patient to a hospice facility takes a lot of work and it is easier to just care for that patient in the hospital until they die; plus, the hospitalist can bill for a few more days of inpatient care.
  10. Avoidance of complications. Healthcare associated infections and surgical complications are publicly reported on the Medicare Hospital Compare website so the hospital wants to keep the numbers down. Even more importantly, hospital complications are costly and can lower the hospital’s financial margin. For the hospitalist, the RVU pays the same, with or without complications. In fact, if a patient has a complication, the hospitalist can bill a higher level of service thus generating more RVUs.
  11. A sufficient number of doctors to provide care to the patients at any given time. The hospital wants to optimize patient throughput whereas the hospitalist paid by the RVU wants to optimize patient volume. There comes a point, however, where too high of patient volume results in reduced patient throughput. For more explanation, see the post on The Starling Curve of Physician Productivity.

What the hospitalist really wants:

  1. To feel that they are valued as professionals. The hospitalist invested 11 years of post-high school education to become a hospitalist and they want to be recognized for that effort. What the hospital often thinks it needs is a warm body with the initials M.D. or D.O. One advantage that our hospital has in the local market is that all of our hospitalists get an OSU faculty appointment, even if it is an unpaid appointment. Being able to say that you are an Assistant Professor at the Ohio State University is enormously valued.
  2. Adequate work-life balance. Physicians of the baby boomer generation went into medicine with the expectation that they were going to work very long hours and have very few days off. Most hospitalists are in the millennial generation and trained in an era of ACGME-legislated duty hour limits and emphasis on life outside of work. Baby boomer doctors have no problem carrying their pagers 24-hours a day and being called on their days off work. Millennial doctors want to turn their pagers off when they leave the hospital and not turn them on again until their next shift.
  3. To have sufficient time during the day to do their job well. Physicians are professionals and they want to take pride in a job done thorough and a job done well. To do that, they have to have enough time that they don’t have to cut corners in patient care. Insufficient time to do one’s job leads to burn-out.
  4. A reasonable salary. Notice that I didn’t say the highest salary. Most hospitalists are not choosing a job because it pays the best but because it is the best place for them to work. In fact, if a hospitalist is choosing a job purely based on salary, you probably don’t want that hospitalist in your hospital. A hospital with a terrible “churn and burn” environment with excessive hospitalist work loads and high turnover will have to pay more to attract a hospitalist than a hospital where the hospitalists feel valued and treated as professionals.
  5. To heal patients’ disease and suffering. Lets face it, college students who decide to go to medical school are intelligent… really intelligent. And to get into medical school, they’ve got to be hard working… really hard working. They are going to spend 4 years racking up $180,000 in medical school debt then get paid a little more than minimum wage as a resident for 3 years. With their intelligence and work ethic, they could have gone into engineering or IT and made more money over the course of a lifetime than a doctor. The reason that they went into medicine in the first place was a desire to heal and help.
  6. A collegial work environment. Most hospitalists want to work in a team of like-minded physicians and they want to work with people who they know will back them up if they have a family emergency or they get sick. They want to know that when they have 3 patients crashing at the same time, that one of their partners is going to come over to help out without being asked. They also want to work with consultants who are going to partner with them in the care of their patients.

There isn’t a lot of overlap between these two lists. So, what we usually do is fall back on things that we can understand and easily quantitate, like the number of patients a hospitalists sees per day, the number of shifts per year, salary, and RVUs (Relative Value Units) billed. But by doing this, neither side really gets what they want and both sides end up being less satisfied than they could be. What is the solution? I have some ideas and I’ll outline them in the next post.

March 4, 2017

 

Categories
Hospital Finances

Take The Money Or Take The Quality Metric?

Yesterday, I was faced with a philosophical dilemma: is it better for the hospital to get paid more for a hospital admission or to have a better score on publicly reported quality outcomes?

Heroin overdose is an epidemic in Ohio (see the post: Found Down With A Needle In The Arm). At issue was a patient transferred to our hospital two days ago from a smaller hospital in Southern Ohio after an out-of-hospital cardiopulmonary arrest following a heroin overdose. He was found apneic and pulseless. The EMS personnel did CPR and managed to get his heart started but by then, he had sustained severe anoxic brain injury. He was intubated and on a mechanical ventilator. He had shock liver and acute kidney failure. On admission to our hospital, he was suspected of being brain dead but the hospitalist needed to wait until the following day for a physician credentialed in brain death determination to assess the patient.

So, the issue was, do we admit him to the ICU as a regular hospital admission or do we put him in observation status? In a previous post, Moon Over Medicare Or Mooned By Medicare?, I laid out the differences in regular admission status versus observation status. The bottom line is that the hospital gets paid a lot more if a patient is in regular admission status than if they are in observation status; a patient in observation status is considered to be an outpatient rather than an inpatient and is anticipated to be in the hospital for < 2 midnights. For a patient being admitted to the ICU after a cardiac arrest who is in acute respiratory failure, acute liver failure, and acute renal failure, normally, this would be a slam-dunk regular hospital admission. The DRG associated with this admission would pay the hospital pretty well. But, you can also make the argument that since the patient was suspected of being brain dead, he could also be in observation status since life support would be discontinued the following day if he is truly determined to be brain dead.

On the other hand, if he is in regular admission status, he counts against our hospital’s publicly reported inpatient mortality rate but if he is an outpatient in observation status, his death would not count against our inpatient mortality rate.

Last year, our hospital finished with an inpatient mortality index of 0.54. This was the second to the lowest mortality rate of all academic hospitals in the United States and we are incredibly proud of it. This year, however, we have seen our mortality index creep up and for the month of December, it was greater than 1.0. In drilling down into our hospital deaths this year, the only thing different is that we have been taking more hospital transfers this year, that is, patients admitted to another hospital and then transferred to our hospital for a higher level of care. In fact, hospital transfers account for 3% of all of our hospital admissions but account for 24% of all of our hospital deaths.

We like hospital transfers because these patients have diagnoses that put them into higher-paying DRG classifications and they tend to have a lot of co-morbidities that amplify the DRG and get the hospital paid even more. But these transfers come with a cost of a higher likelihood of dying in the hospital.

Yesterday, I had to make the decision: should we put the patient in regular admission status and get paid more but take a hit on our mortality rate? Or should we put him in observation status and get paid considerably less but not have his death count against our inpatient mortality rate? I spoke with a number of people in our hospital. Some recommended taking the money and the mortality hit. Others recommended avoiding the mortality and take the financial hit.

So last night I made my decision before we pronounced him brain dead.

What would you have done?

February 16, 2017

Categories
Hospital Finances Operating Room

Thou Shalt Not Covet Thy Neighbor’s Surgeon

penguin-rockIf you are addicted to the National Geographic Channel, like I am, then you’ve probably seen videos of Adelie penguins. The males build nests out of stones in frozen Antartica in order to attract female penguins. Instead of going out and collecting their own stones, some criminal male penguins will steal stones from one his neighbor’s nests when his neighbor is out stone-hunting. Hospitals do the same thing – except instead of stones, they steal surgeons.

Surgical admissions to the hospitals are more lucrative than medical admissions. Surgical admissions account for 29% of all hospital admissions but account for 48% of hospital costs. If you are paying out of pocket, the hospital expense of a heart valve surgery is about $117,000 and a hip replacement is $39,000. For most hospitals, surgeries are their lifeblood. And inpatient surgeries are far more valuable than outpatient surgeries. Consequently, hospitals are constantly on the prowl for surgeons, especially those surgeons who do big-ticket surgeries that bring patients into the hospital and who can do a large volume of surgeries with low complication rates.

There are two ways that you can get acquire a high-volume, low-complication surgeon. You can hire him or her straight out of residency and then develop him/her by careful mentoring. Or, you can recruit them from another hospital. Recruiting from an out-of-state hospital is usually seen as fair game. A hospital in Columbus, Ohio doesn’t really compete with a hospital in Tampa, Florida when it comes to doing hip replacement surgeries so leaving a hospital in Columbus for a hospital in Tampa is not seen as taking surgical market share to Tampa.

moses-10-commandmentsBut recruiting a surgeon from one hospital to a different hospital in the same city is typically seen as playing dirty. First, that surgeon likely has a large referral base of primary care physicians and those physicians will continue to refer their patients to the surgeon regardless of which hospital he/she is operating at. Second, the first hospital has invested several years developing that surgeon to get him or her to a point of efficiency and notoriety.

A great surgeon wasn’t a great surgeon the day he/she finished residency. It takes time after training to become really great. In his book Outliers: The Story of Success, Malcolm Gladwell proposed that to be really great at something, you need to spend 10,000 hours in meaningful practice of it. For example, Bill Gates spent about 10,000 hours programming before he came up with the foundations of Microsoft’s operating system. The Beatles practiced and played concerts together in Germany for 10,000 hours between 1960-1964 before they made music history. A surgeon can’t get 10,000 hours of operating room time during a 5-7 year residency. Most of their operating time during training is spent as an assistant rather than being the primary surgeon and even so, they’d have to spend 40 hours a week operating for 5 years to get to 10,000 operating hours. So it takes some time after residency to make a good surgeon a great surgeon – I think it is typically about 7 years. Those 7 years are kind of like the time the Beatles spent in Germany before they became famous.

Not only does it take time for a surgeon to hit peak surgical skill, but it also takes time for that surgeon to cultivate a referral base and to become efficient. That part typically takes about 5 years. Therefore, the hospital has to subsidize the surgeon for about 5 years during the surgeon’s start-up period. So, a typical start up funding package from the hospital for a newly trained surgeon might be $250,000 for year 1, $150,000 for year 2, $125,000 for year 3, $100,000 for year 4, and $50,000 for year 5. That’s a total of $675,000 that the hospital invested in that surgeon to get them to a level of self-sustaining practice.

Now, if you are a competing hospital in the same city, you can either spend $675,000 cultivating your own surgeon right out of residency or you can spend $675,000 recruiting another hospital’s surgeon who is at the end of their 5-year start up. And if you really want to come out ahead financially, you can give that surgeon an extra $150,000 per year for 4 years (total $600,000) and save yourself $75,000 that you would have spent cultivating a newly trained surgeon.

pattonWhen leaving Africa in 1943, General George S. Patton famously said “No dumb bastard ever won a war by going out and dying for his country. He won it by making some other dumb bastard die for his country.” Similarly, a hospital wins the surgery volume war not by paying to develop its own surgeons but by making some other hospital pay to develop the surgeon… and then stealing them.

Not all types of surgeons are equal in this regard. For example, a surgeon who is really good at something unique and cutting edge that brings in lots of new lucrative elective surgeries to the hospital, like robotic prostatectomy, makes for great stealing. On the other hand, a general surgeon in a city with 50 general surgeons may not be worth spending as much to steal.

Additionally, optimal efficiency is not just a function of the surgeon but it is the entire operating room team, including the physician assistant, nurses, and operating room technician. It is much harder to steal an entire team from a hospital so there is inevitably some lost efficiency from a newly stolen surgeon.

Hospitals create barriers to other hospitals absconding with their surgeons by implementing “non-compete” clauses in the surgeon’s contract. A typical non-compete clause will say that the surgeon cannot work at a hospital within 10 miles for a year after resigning. There are ways around the non-compete clauses, however. They can be contested in court and the surgeon may or may not win. Or the hospital stealing the surgeon can locate the surgeon in a branch hospital or surgical center just outside of the non-compete radius. This happened to us a couple of years ago when 2 plastic surgeons a few years out of residency were recruited by a competing hospital system in Columbus that then located them at one of their branch hospitals that is 10.5 miles away from the OSU Medical Center, a half mile beyond the non-compete radius.

So in deciding whether to grow your own surgeon or steal someone else’s, it all comes down to financial strategy. Either approach can be cost effective and it is ultimately finances and not morality that guides behavior.

December 6, 2016

Categories
Hospital Finances Medical Economics

How Many Researchers Can You Really Afford?

Academic medical centers’ reputations are rarely built on the quality of clinical care or the quality of education. Reputations are built on the volume of research grants and publications. The academic medical center becomes famous by doing research about clinical care and publishing about education. Similarly, to be promoted as a faculty member at most colleges of medicine in the U.S., it is not enough to be a great clinician or great teacher, you have to do research and publish about medicine and teaching. In theory, devoting a lot of time to research and publication about clinical care and education will also make the institution a better place to provide clinical care and medical education. But in reality, the best researchers and journal article writers are not necessarily the best clinicians or teachers.

To be successful obtaining and implementing research grants, physicians have to have “protected time”. This is time that they are not assigned clinical duties and can devote to scientific investigation and writing in order to be competitive for research grants. The most prestigious grants for physicians are those from the National Institutes of Health and these grants provide money to conduct research projects and also provide money to pay for the physician’s “protected time”.

But we have a problem in American research. Grants from the National Institutes of Health don’t really cover the physician’s protected time. It all comes down to something called the NIH salary cap. This is the maximum salary that can be paid from an NIH grant. Currently, the salary cap is $185,100. To any normal human being, this seems like a lot of money, a whole lot of money. The problem is, that physicians doing clinical practice usually make more than this. In fact, according to the MGMA salary survey, the average salary for most specialties is higher than $185,100. This means that to be a researcher, you either have to accept a lower salary than a clinician in the same specialty or someone else needs to subsidize your salary.

Lets take an example of a group of physicians who have 50% protected time, meaning that they see patients half of the work week and do research funded by the NIH for the other half of the work week. In the table below, the salary is taken from the MGMA survey. The the cost of 50% protected time is listed as 50% salary. The NIH salary cap is for a 100% full-time researcher is $185,100, so half of that (to cover the 50% protected time) is listed as 50% NIH cap. For most specialties, the NIH salary cap will not fully cover the salary that the physician would receive if her or she was a full-time clinician; this difference is listed in the last column.

nih-salary-analysis

From this analysis, you can see that a hospital can afford to have 4 specialties do research without having to subsidize them: infectious disease, general internal medicine, nephrology, and general pediatrics. For any other specialty, the hospital has to come up with additional funds to make up the difference between the NIH salary cap and what that physician could make doing pure clinical practice. Neurosurgeons are the most financially challenging since they have the highest salaries: you can fund 19 endocrinologists to do research for the price of funding one neurosurgeon.

In reality, most researchers accept a lower income than full-time clinicians. Researchers don’t have to round on weekends, don’t get called in at night for emergencies, and don’t have malpractice suits filed against them. But there are limits and even the most scientifically curious physicians will find the allure of an extra $50,000 or $100,000 too much to keep them in research.

As a consequence of this, an academic medical center that wants to get the greatest return on research investment will seek a lot of researchers from endocrinology, physical medicine, infectious disease, and nephrology. Researchers who are neurosurgeons, orthopedic surgeons, and cardiologists are too expensive to have more than a small number of researchers.

One of my colleagues who is a cardiologist on his division’s finance committee once told me that that the worst news he can get is a mass congratulatory email from the division director telling all of the cardiologists that one of their peers just got an NIH grant. The unwritten implication of that grant was that the rest of the cardiologists were going to have to pony up to help subsidize the portion of the grant awardee’s salary not covered by the NIH salary cap. Now days, the clinical physicians usually can’t afford to pay this difference because it means that they have to take a pay cut in order to support their research colleagues. Therefore it comes down to the hospital to provide the salary difference subsidy.

So as a hospital medical director, how should we view this? We only have a limited amount of money to invest in researchers so we have to be prudent in how we spend it and who we spend it on. It is like investing. For high salary specialties, the hospital can only afford a small number of researchers and they have to have a high probability of research success – think of this as buying 1 expensive stock share in Apple. For lower salary specialities, the hospital can afford a larger number of researchers and can afford to take a chance on researchers with a less certain probability of research success – think of this as buying 1 inexpensive stock share in each of 10 start-up companies.

The holy grail of research funding is the endowed chair where the academic medical center can use money from donors to off-set the NIH salary cap difference. This is pretty easy at a well-endowed college of medicine like, for example, Harvard. But it is not so practical at a state-supported college of medicine (like Ohio State) with relatively meager endowment funds. For institutions with less endowments, you have to decide what the right ratio of clinicians:researchers is. That ratio will vary depending on the specialty and the percent protected (research) time that the researchers have. The goal is to have the right balance so that you have enough research to make the institution famous but not so much research that institution goes into debt.

December 3, 2016

Categories
Hospital Finances

A Cheap Tool Is An Expensive Tool

toolIt is one of those sayings that everyone’s father or grandfather told them at some time and it basically means that you get what you pay for. An inexpensive tool that has to be replaced because it wasn’t well made costs you more in the long run than the well-made expensive tool. Same goes with hospital purchases.

In hospitals, we buy expensive stuff. An MRI machine is going to run you $1 million. If you want to buy a da Vinci surgical robot, you’re going to need $2 million. A pair of endoscopes to do ERCP is about $50,000. When you are buying equipment that is this expensive, there is a good chance that your hospital is going to put out an RFP (“request for proposals”) and then use those proposals to work the price down as low as possible by creating a bidding war between different manufacturers.

Before I go on with this post, I have to make a confession. I used to hate to buy cars. No matter how much I paid for one, I was always sure that at some level, I was getting ripped off. Now, however, it’s not so bad. You can check on Edmunds or Consumer Reports and get a good idea of what a fair price is. And you can get an on-line price so you don’t have to spend horribly unpleasant time in a dealer showroom while the salesman “…checks with the manager about your counter offer price”. But buying equipment for the hospital still has that car dealer feel to it. You can’t go to consumer reports to get ratings and average prices on ultrasound equipment.

So, it takes a little bit of work to decide if the equipment that you are buying is really a good deal or not. First, talk to the physicians who will be using the equipment. Second, meet with the manufacturer representatives (but only after you have done enough homework and reading to know what questions to ask them). Third, check on-line and with other hospitals that have recently made similar purchases. Fourth, work with your purchasing department in case the purchase can be bundled as a part of a larger equipment purchase or an exclusivity contract. Fifth, don’t be in a hurry – if you are buying a car, it is best to wait until the end of the month or during the winter to get your best price, similarly, waiting will get you a better price if the sales rep or the company needs to move medial equipment inventory before the end of their fiscal reporting period. You are usually not going to just pay the sticker price for medical equipment.

Once you have a price, you’ll need to determine if there is an adequate return on investment or whether you’re going to lose money on it. To do this, you’ll need to draft a “pro forma” which is a document that projects the future net revenue that a new capital purchase will bring. Here is where you have to be particularly careful because a pro forma can be manipulated to show almost anything you want. Here are some of the steps you’ll need to take:

  1. Accurately project how often you’re going to use it. Your physicians are going to over-estimate how much they’ll use a piece of equipment – it’s just human nature. If you have children, when they reach age 11, they’re going to come home and tell you that “…every single one of their classmates is allowed to see PG-13 movies”. It may seem like it to them but the reality was that 2 of their classmates snuck into a PG-13 movie when they told their parents that they were going to see the Finding Dory at the multiplex cinema. If you aren’t sure how often equipment will really get used, call some of your counterparts at other hospitals to get an idea of actual equipment use frequency.
  2. Determine depreciation. If you depreciate a piece of equipment too quickly, then the cost of that piece of equipment will appear to be too high. For example, let’s say you need a new bronchoscope that costs $18,000 and you expect to use it 100 times a year. If you depreciate it over 3 years, that will be an equipment cost of $60/bronchoscopy. If you depreciate it over 6 years, then the equipment cost drops to$30/bronchoscopy. Accurately projecting the life expectancy and frequency of use of a piece of equipment is critical to calculating your return on investment.
  3. Project revenue. To do this, you’ll need to know how much the hospital is going to get paid for using the equipment. This is pretty easy to do for outpatient procedures since you can determine how much Medicare, Medicaid, and commercial insurance companies are going to reimburse for a particular CPT code. Just be sure you are not mixing “charges” with “receipts” since your charges are always going to be a lot higher and do not reflect what you will actually get paid for the procedure. For inpatients, this can be difficult because the hospital is going to be paid by the DRG and not by the individual procedures done during the hospitalization.
  4. Make sure you account for all of your expenses. We are starting an endoscopic ultrasound program at our hospital. In this case, it wasn’t just the expense of the equipment but also the disposable needles, the depreciation on the machine that cleans the equipment, the time for a cytopathology technician to do real-time microscope slide preparation, and the depreciation cost of a tele-pathology microscope so that a cytopathologist at a remote location can do real-time preliminary interpretation of those slides. The best way to be sure that you captured all of the expenses is to map out the procedure and include the time cost of every person involved in the procedure, preparation, disposables, cleaning, etc.

Buying a piece of medical equipment is a lot more complicated than buying a car. Getting your hospital purchasing department involved early can help keep you from buying a cheap tool that ends up becoming an expensive tool.

September 13, 2016

Categories
Hospital Finances Inpatient Practice

How Many Patients Should A Hospitalist See A Day?

doctor-with-tablet-14619131467C0This is a burning question that every hospital CEO and medical director wants to know since most hospitals end up subsidizing hospitalists. And the answer is… it depends. Anyone who tells you categorically that the right number for every hospital is 15 patients a day is wrong.

What the hospital wants from the hospitalist is good value for the amount of money that the hospital pays to support the hospitalist. If the hospitalist is seeing too many patients per day, then there is a risk of bad things happening including medical errors, physician burn-out, increasing length of stay, worse patient satisfaction scores, and patient bottlenecks caused by later times of discharge. If your hospitalists are seeing too few patients a day, then you are not getting your money’s worth from them. Here are some of the variables that I look at when I’m deciding if our hospitalists are seeing the right number of patients.

  1. Patient case mix index (CMI). This is a pretty easy number to get from your hospital’s billing office. The higher the number above 1.0, the more medically complex the patients. It will give you an idea of the complexity of patients that the hospitalist is seeing and as a result, how much effort the hospitalist needs to put into the care of a given patient. Here is an example of 3 inpatient services from our own hospital. Service A is an attending-only (non-teaching) service that covers general medical admissions and the ICU – their CMI is 1.45. Service B is a teaching service with residents and a hospitalist attending that takes general medical admissions but does not cover the ICU – their CMI is 1.21. Service C is an attending-only (non-teaching) service that takes mainly cardiac admissions and a consequence, they have a high percentage of observation chest pain admissions – their CMI is 1.10.
  2. Teaching or non-teaching service. The ACGME limits the service census to 10 patients per intern. There is a time trade-off for hospitalists on teaching services: the residents will do a lot of the time-consuming work for the attending hospitalist but the hospitalist has to do uncompensated teaching time; in a healthy teaching service, these should balance out. A teaching service with a cap of 10 patients is rarely a full-day work for the attending hospitalist so he or she has to have some other income generating activity.
  3. Admitting service versus consultative service. Patients with medical illnesses requiring admission to the hospital are by definition sick. On the other hand, those coming in for an elective joint replacement generally have minimal medical conditions or their medical conditions are in good control. The hospitalist co-managing medically stable patients in for elective orthopedic surgeries can see considerably more patients per day than the hospitalist managing medical admissions coming in from the ER.
  4. Advanced practice providers. Physician assistants and nurse practitioners can allow a hospitalist to see more patients per day but they come at a cost, generally one-third to one-half the salary of a hospitalist. A physician assistant that allows a hospitalist to see 25 patients a day rather than 15 patients a day is probably worth it. However, if the use of a physician assistant only allows that hospitalist to see 18 patients per day rather than 15 patients per day, it may not be worth it.
  5. ICU or non-ICU. In the ICU, patients need to be re-assessed multiple times a day by the physician, there will be more bedside procedures to be done, and there will be more minute-by-minute orders to be placed. A hospitalist in the ICU may only be able to cover 12 patients a day whereas that same hospitalist may be able to take care of 20 patients a day on a general medicine nursing unit. That has to be tempered with the availability of additional consulting physicians – a general internal medicine hospitalist in the ICU may be able to see more patients if there is a critical care medicine consultant also rounding on the patients.
  6. Day shift versus night shift. There is a lot more work per patient on the census during the day than during the night. During the day, patients need to be rounded on, there are family meetings, and patients need to be discharged. During the night, the hospitalist does emergency admissions and deals with urgent/emergent inpatient issues. A night shift hospitalist may be able to cover 60 patients but a day shift hospitalist, only a quarter of that.
  7. Observation versus regular admission patients. This is a tricky one. On the one hand, observation patients are less medically complicated than regular admission patients and don’t have as much discharge complexity (need for home health, nursing homes, etc.). On the other hand, observation patients have a much shorter length of stay so a hospitalist with a lot of observation patients will be doing more time-consuming admissions and discharges per day than a hospitalist with mostly regular inpatient admissions. Currently in the U.S., the average hospital has 26% of their average patient hours being observation patients. Our hospitalist service that sees primarily cardiac patients has 50% of their patients in observation status; another hospitalist service that sees general medical admissions has 20% of their patients in observation status.
  8. Ease of documentation. If a hospitalist has a really good electronic medical record with vital signs, medication records, progress notes, lab reports, etc. then it can be far more efficient to take care of patients than if medical records are fragmented. For example, at one hospital in our community, the physician progress notes are handwritten in a paper chart, the vital signs and medication records are on one computer system, and the lab and radiology reports are on another computer system. It is neither possible or safe for a hospitalist to see as many patients in this environment as they can in a hospital with a single, integrated electronic medical record.
  9. Patient captivity in the electronic medical record. By this, I mean whether the hospital and the primary care physicians caring for the patients who get admitted to that hospital use the same electronic medical record. If they do, then it is much easier for the hospitalist to do admissions and discharges since much of medical history documentation is already in the electronic medical record. It is much faster to do an H&P if you can draw in the entire past medical, surgical, family, and social history plus all of the patient’s current medications and doses with one click on the computer rather than having to manually enter all of the information.
  10. Non-clinical duties. A hospitalist that is spending 2 hours a day in committee meetings cannot see as many patients per day as a hospitalist who has no committee assignments.
  11. Shift duration. A hospitalist working a 12-hour shift may be able to see 20 patients a day (1.7 encounters per hour) comfortably but that same hospitalist working an 8-hour shift may only be able to see 14 patients a day (1.7 encounters per hour) comfortably. Shift duration also affects the number of shifts per month you should expect your hospitalists to work: if you expect your hospitalists to work 2,300 hours per year, then that is 16 12-hour shifts per month but 24 8-hour shifts per month.
  12. Hospitalist experience. All hospitalists are not equal. A new hospitalist right out of residency is not going to be as efficient and see as many patients as a hospitalist with 20 years of practice experience. High hospitalist turn-over means more new physicians who cannot see as many patients per day as experienced hospitalists. If you force your hospitalists to see too many patients per day, they will quit and you will end up with excessive hospitalist turn-over.
  13. Hospital geography. It can take a hospitalist caring for 15 patients on 6 different nursing stations more time per day to manage than a hospitalist caring for 20 patients on a single nursing station.
  14. Encounters versus census. We often focus on the hospital midnight census to measure hospital capacity. But that only measures the patients who are in a bed at midnight and over the course of the day, there is going to be bed turnover as patients are admitted and discharged. If the patient length of stay is long, then the midnight census will be close to the number of daily patient encounters per physician. If the length of stay is short, then the hospitalists will have a lot more patient encounters per day than the midnight census.
  15. Census variability. Too often, we look at census averages and although this is useful, it doesn’t tell the whole story. For example, last Monday, we had 109 medical/surgical beds occupied and by Thursday we had 140 – that is a 31-patient swing in just 3 days. This means that the hospitalist services all had more patients per hospitalist on Thursday than they did on Monday. So, if your hospitalist census averages 15 patients per physician but the census fluctuates between 8 and 25, there are going to be days that the hospitalists will have a hard time safely caring for those higher numbers of patients. If there is not a surge plan to bring in “risk call” hospitalists on those high census days, you may need to settle for a lower average daily census per hospitalist in order to accommodate those unpredictable days when the hospital census is usually high.
  16. RVU productivity. This is also a tricky metric because it does not capture all of the work done by a single hospitalist but at least it gives you a ballpark comparative to determine if your hospitalist program as a whole is meeting productivity benchmarks. The MGMA reports that the median total RVUs generated by a hospitalist is 5,900 and the work RVUs are 4,100. These numbers are affected by day versus night shift and other variables.
  17. Robustness of case management. Case management has to happen whether or not a hospital has case managers. A hospitalist who has to do a lot of the discharge planning because of a lack of case managers cannot see as many patients per day.
  18. The local market. If your town has several competing hospitals, then each hospital will be competing with the others for hospitalist and if the hospital down the street has an expectation of 15 patients per day and your hospital’s expectation for the same patient population is 20 patients per day, then you are going to lose valuable hospitalists.
  19. The patient demographic. If your hospital mainly sees patients with good commercial insurance and good primary care providers, then it is easier for the hospitalist to focus on the acute problem that brings the patient into the hospital and it is easier to make discharge arrangements. On the other hand, if you have a high percentage of uninsured or Medicaid patients, then the hospitalist taking care of a patient with pneumonia is likely going to also be spending time tuning up that patients diabetes, heart failure, or hypertension since the only time the patient sees a doctor each year is when he/she is in the hospital.

So what does a medical director or hospital CEO do? I recommend starting with an assumption of 15-18 patients per hospitalist and then working up or down from that number based on the unique features of your own hospital, community, and hospitalist program structure by taking into account the variables I mention above.

August 13, 2016

Categories
Hospital Finances Medical Education

Financing American Colleges Of Medicine

IMG_0715Recently, the Association of American Medical Colleges (AAMC) released a report on how American colleges of medicine are funded and how this funding has changed over the past several decades.

As a hospital medical director, this has enormous implications for hospitals associated with medical schools and the report is pretty sobering. Let’s take a look at 2 years: 1980 (the year I started medical school) and 2015, thirty-five years later.

In 1980, the biggest source of income for colleges of medicine was state governments which accounted for 29% of the total funding. Support from federal research was next at 22%. Income from clinical practice (both from physicians and hospitals) was also 22%. Tuition accounted for 6%.1980 COM funding

Jump ahead to 2015 and there has been a huge shift in where the money comes from. Now state governments dropped to 6% of medical school funding. Federal research dropped to 14% of medical school funding. But clinical practice income now accounts for 60% of medical school funding. Of that 60%, 18% comes from hospital revenue and the other 42% comes from physician revenue. Tuition accounts for 4%.2015 COM funding

It is not that the state governments are paying less. Indeed, in 1980, the states contributed $1,639,000 to medical colleges whereas in 2015, the states’ contributions rose to $6,990,000. The problem is that the total cost of colleges of medicine has exploded, rising from $5,645,000 in 1980 to $112,978,000 in 2015. In order to support this exponential increase in costs, medical schools have had to depend more and more on clinical practice income, from both physicians and hospitals.

On the surface, this might seem that the colleges of medicine are like giant parasites feeding off of the toil of physicians and hospitals but the reality is more complex. In 1980, most academic physicians were in private practices, with a rather small portion of their income coming from colleges of medicine; the physician practice income went to the physicians and not to the colleges. By 2015, most academic physicians were no longer in private practice but rather were employed by either the teaching hospitals or by the college of medicine (and sometimes the hospital and the college are essentially the same thing). Therefore, with the changes in physician employment, the total cost of a college of medicine has had to go up since the college now has to pay physician salaries but the amount that the colleges receive from clinical practice income has also gone up since the college-employed physicians clinical practice income is now credited to the college instead of a private medical practice.

So what is the implication of all of this to the hospital medical director? First, if you are a medical director of an academic teaching hospital, you will have an increasing percentage of your physicians employed by the colleges and universities rather than being in separate private clinical practices. Second, with 15% of college of medicine revenues coming from the academic teaching hospitals, these teaching hospitals will have additional expenses not borne by non-teaching hospitals. Although academic teaching hospitals do have additional federal income that non-teaching hospitals do not have in the form of federal direct graduate medical education and indirect graduate medical education funding, these funding sources alone will not sustainably cover the hospitals’ contribution to colleges of medicine in the future.

So what can we do as hospital medical directors? We are and for the foreseeable future will be inextricably intertwined in a symbiotic relationship with our colleges of medicine and academic physicians. We will need to recognize that our hospitals will be obligated to help support activities that are not historically part of the hospital mission, such as pre-clinical medical education and medical research. We also need to be stewards of the hospital’s resources since the hospital administrative leaders will rely on our expertise to advise them on where money should appropriately be allocated. And as part of being stewards of those hospital resources, we will need to hold the colleges and the physicians accountable to ensure that hospital funding is being used wisely and for the purposes that it was intended.

I still firmly believe that being an academic physician is one of the highest career callings in healthcare. And being a medical director of an academic teaching hospital is for me the culmination of that career. As medical directors, we face the controversies, conflicts, and challenges posed by the dynamic relationships between the hospitals and the colleges but in the end, there is no better job on the planet.

July 27, 2016

Categories
Hospital Finances Inpatient Practice

The Three Most Valuable Specialists In Your Hospital

book and stethescopeFrom reading the title of this post, you’re probably thinking that I am going to list some surgical specialties, interventional cardiology, or gastroenterology since these specialties bring in financially lucrative procedure volume to the hospital. So what I am going to say is going to surprise you. I’m going to make the argument that the 3 most valuable specialists in your hospital are geriatrics, infectious disease, and nephrology. I know what’s going through your mind right now: “What in the world is he thinking about?”. Well, let me make my case and then you decide. And it all starts with CPT.

CPT codes, or the Current Procedural Terminology codes, are the coding numbers that are assigned to every service and procedure that a physician does, from an office visit to an appendectomy. So for example, CPT 99221-99223 code for the 3 different levels of new inpatient encounters and CPT 99251-99255 code for the 5 different levels of inpatient consultation encounters. For decades, those consultation codes charged by a specialist paid more than the standard new patient encounter codes that would be charged for an admission history and physical examination by a generalist. This makes sense – if you are a specialist and providing a specialty consult opinion drawing from your additional years of training and experience, you should be paid more than the generalist doing a standard history and physical exam.

But on January 1, 2010, Medicare got rid of the consultation codes and required specialists to use the same CPT codes that the generalists were using for the admission history and physical exam. The net result of that decision was that cognitive specialists (i.e., those that do not have a procedure that they do) saw a significant drop in their income compared to the procedural specialists (i.e., those that do a procedure, like cardiac stress testing or colonoscopy). The three subspecialties that were affected the most were infectious disease, nephrology, and geriatrics.

Every year, the Medical Group Management Association (MGMA) publishes the starting salaries for physicians in their first year after completing training. In the past, specialists made more money than generalists. It makes sense… if you do an extra 2-3 years of training as a subspecialty fellow, you should expect a return on investment for that training and so you should expect a higher salary. But since the elimination of the consult codes by Medicare, some specialists, namely those that don’t involve doing lucrative procedures, have seen their salaries drop to the point that there is no longer any return on the investment of the extra years of subspecialty fellowship. Here is the most recent data from the annual MGMA salary survey from 2015 (based on data from 2014).

Physician salary

 

With general internal medicine, family practice, and hospitalist medicine, all you need is 3 years of residency and you are ready to start practicing. For all of the other specialties, you have to do 2-3 years of additional fellowship training. For infectious disease and nephrology, there is no salary advantage to doing those additional years of fellowship training (geriatrics is not listed in the MGMA report but their salary is typically similar to general internal medicine). In fact, the cost of doing the additional years of fellowship training is that you are going to make less than a family physician or a hospitalist who stopped after 3 years of residency.

For any of my colleagues in academic medicine who are looking at these numbers and saying, “I don’t make anywhere near that amount even though I’ve been practicing for years”, relax. The MGMA data is largely derived from private practice physicians and not academic physicians and as has always been the case, you make a lot more in private practice than you do in academics.

All of this has not gone unnoticed by medical students and residents when choosing a subspecialty. Recently, the National Residency Match Program released the results of the 2016 resident and fellow match. The results paint a frightening picture for the future of the cognitive specialties.

NMRP

This graph shows the percentage of available fellowship positions that were filled by graduates of American medical schools (blue) and the percentage of fellowship positions filled by all applicants, including foreign medical graduates (orange). In keeping with the starting salary data, residents just are not going into geriatrics, nephrology, or infectious disease. There is simply no return on the time investment of doing a fellowship.

So what does this mean for hospital medical directors? Geriatricians, nephrologists, and infectious disease specialists are going to become increasingly scarce. It is going to be harder and harder to recruit these specialists. Of equal concern, there is a danger that the best and smartest residents will be drawn to the other specialties, resulting in an overall drop in the caliber of the new cognitive specialists in future years compared to past years.

We are fortunate at our hospital. The Director of the Division of General Internal Medicine and the Chairman of Internal Medicine have placed a high value on geriatrics. We have great nephrologists and one of the premier interventional nephrology programs in the country. And 2 years ago, the Director of the Division of Infectious Disease recruited one of the best clinicians I know as our hospital’s lead infectious disease specialist and director of hospital epidemiology.

If you have a good geriatrician, a good nephrologist, or a good infectious disease specialist, take good care of him or her because he or she is going to be hard to replace. And when you have strategic planning meetings with your hospital business leaders, speak up for these specialties because hiring them now before their supply drops further is going to be a good long-term business decision. For medical students who have always dreamed of a career in one of these specialties, take heart, because in a few years the invisible hand that governs the law of supply and demand in capitalism will cause their salaries to rise again in the future.

July 23, 2016

Categories
Hospital Finances Medical Economics

MOON Over Medicare Or MOONed By Medicare?

Moon: verb; to expose one’s buttocks to someone to insult or amuse them, see also the Center for Medicare and Medicaid Services.

So the good people at CMS have developed a new program designed to reduce the national unemployment rate for hospital case managers. It’s called “MOON”, or the Medicare Outpatient Observation Notice. This is the latest rule in the Observation Game, which was created and brought to you by Medicare.

In the Observation Game, the players are the patients, the hospitals, and Medicare, each of whom try to avoid paying as much money as possible when a patient gets sick. Unlike most games, in the Observation Game, the goal is not to win the most money but rather the winner is decided by who loses the least money. When the game gets too predictable to the point that all of the players understand how to pay the game, CMS changes the rules to make the game more interesting, sort of like the character President Snow in the movie The Hunger Games.

The basic premise of the Observation Game is that Medicare tries to pay as little as possible when a person becomes ill or injured and needs hospitalization. If that person has an illness that would normally require less than 48 hours in the hospital, then Medicare defines that hospital stay as “observation status” and the patient is considered an outpatient. It is only for an illness that would normally require a hospital stay greater than 48 hours that the hospital stay is considered inpatient. The important differences are:

  1. Inpatient status:
    1. Covered by Medicare Part A
    2. Medicare covers the cost of the hospitalization
    3. Medicare covers the cost of any drugs given during the hospitalization
  1. Observation status:
    1. Covered by Medicare Part B
    2. The patient has a 20% co-pay for the hospitalization
    3. The patient is responsible for the cost of any drugs through their Medicare Part D plan, or if they do not have a Medicare Part D plan, then the patient pays for them out of pocket

In the Observation Game, Medicare tries to get as many admissions into observation status as possible whereas the hospitals try to get as many admissions into inpatient status as possible. The patients end up being sort of by-standers in the Observation Game – they can reduce the amount of money that they lose when they get sick and need to come into the hospital by buying supplemental insurance and Medicare Part D plans but the only way that they can control whether their illness is going to result in inpatient status is by waiting until their illness gets so bad that it is going to take more than 48 hours of hospitalization to treat it.

In order to ensure that the hospitals are not cheating by declaring too many patients requiring hospitalization as inpatient, Medicare uses Recover Audit Contractors, or the RAC, which are sort of like the referees in the Observation Game. The RAC are companies that can review medical records of patients who have been hospitalized and then determine based on the documents whether or not the patient’s hospitalization qualified as inpatient status or not. If the RAC determines that a patient whose hospitalization was billed to Medicare as inpatient status did not meet the rules for being an inpatient (and instead should have been observation status), then the hospital has to pay back the money from that hospitalization to Medicare and then the RAC gets a commission based on the amount of money returned to Medicare. This is kind of like the referee in a basketball game getting paid more for every foul that they call.

In the past, Medicare found that just defining observation status as being hospitalized for less than 48 hours was not challenging enough for the Observation Game so it changed the definition of observation status to be hospitalization for less than 2 midnights. Therefore, a patient who is admitted to the hospital for 36 hours starting at 6:00 AM would be considered observation status (i.e., one midnight passes before discharge) whereas a patient who is admitted to the hospital for 36 hours at 11:00 PM would be considered inpatient status (i.e., two midnights pass before discharge). The hospital players of the Observation Game have pretty much figured out how to play the game with the 2-midnight definition of observation status versus inpatient status so Medicare has decided to change the rules a bit in order to keep the Observation Game from getting too dull.

So here is where MOON comes in. When a hospitalized patient is in observation status, the hospital has to have a patient sign a form notifying them that they are in observation status and therefore considered as being an outpatient with all of the addition costs that the patients will have to pay. This notice is called the Medicare Outpatient Observation Notice or MOON. On the surface, that sounds like a pretty simple rule but Medicare wanted to make the Observation Game more interesting so beginning on August 6, 2016, the MOON has to be given to the patient after 24 hours of hospitalization but before 36 hours of hospitalization. In other words, the hospitals have a 12-hour window during which time they have to have the patient sign the MOON. If hospitals don’t follow this rule, then they don’t get paid.

But here is the sad reality of the Observation Game. When a person gets sick or injured, it costs money to treat him or her. By using the rules of the Observation Game, if Medicare doesn’t have to pay for that treatment, then either the patients or the hospitals do. And if the hospitals have to pay for that treatment, then the hospitals are going to charge more to everyone else so that the hospitals can eventually cover their costs.

So think back to the definition: moon: verb; to expose one’s buttocks to someone to insult or amuse them. The next time you are hospitalized, if you get MOONed, were you insulted or amused?

July 23, 2016

Categories
Hospital Finances

Articles about hospital charges will never get you a Pulitzer

Every year, an eager young reporter will call up hospitals in some large U.S. city and ask how much they charge for procedures like a hip arthroplasty, MRI, or obstetric delivery. He or she will become outraged to find out that there is enormous variation in the amount that different hospitals charge and write a newspaper article exposing the “high cost” hospitals and hoping to be rewarded with a Pulitzer Prize. All I can do is shake my head and sigh.

If you are a foreign prince coming to the United States to get your hip replaced, this information may be valuable to you but if you are an average American, the hospital charge is irrelevant. The reason… almost nobody pays the amount that appears on the hospital charge list.

If you are 68 years old, the cost of your hip replacement is going to be (almost) the same at any hospital you go to and that is because the hospital and the orthopedic surgeon get paid the amount that Medicare will pay for a hip replacement regardless of what the hospital or the doctor charges. I say almost the same because there are some minor adjustments in what Medicare will pay based on the geographical location of the community, whether the hospital is a teaching hospital, etc. but the amount is pretty close for all hospitals.

For people under age 65 on Medicaid, it works the same – regardless of how much the hospital “charges”, Medicaid pays only the same fixed amount. For those people under 65 who have commercial insurance, it is a little different: the insurance company will usually have a standard rate that they will pay regardless of the hospital charge and when the hospital and the insurance company negotiate a contract every few years, the hospital will agree to what that rate will be. Big hospital organizations can often leverage their size or notoriety to negotiate rates that are higher than the “standard rate” (but that is a topic for a separate post).

For most hospitals and most physicians, the “charge” for a hip replacement will be 1.5 to 3 times higher than what commercial insurance companies will pay. So why set the charges so high if it doesn’t affect how much you get paid? Two reasons:

First, the hospital (or doctor) always wants to set the charge for a procedure higher than whatever the highest-paying insurance company will pay for it so that they don’t leave money on the table. For example, lets assume Medicare pays $400 for an MRI test, insurance company A pays $450, and insurance company B pays $500. If the hospital charges $400 for the MRI, then that is all insurance company A and B have to pay so the hospital will leave $50 from insurance company A and $100 from insurance company B on the table. On the other hand, if the hospital charges $600, then they will get paid $400 from Medicare, $450 from insurance company A, and $500 from insurance company B.

Second, sometimes, the hospital will get paid whatever they ask for with their charges. This doesn’t happen very often but if your hospital has a lot of foreign princes flying in for their hip replacement, then it makes sense to ramp up the charges since that foreign prince will pay whatever you charge him. There are a few rare occasions when an insurance company will pay whatever the “charge” is – in my experience, this mainly happens when a lawyer or an insurance company pays a physician to do an independent medical examination for disability determination. The hospital charge can also apply to people who don’t carry insurance; this was pretty common before the Affordable Care Act when the percentage of our hospital’s patients who were uninsured was running about 13% but since the ACA was enacted and Medicaid was expanded in Ohio, our uninsured percentage has dropped to < 3%. Most of those who remain uninsured have low incomes and the hospitals will usually negotiate some reduced charge based on the patent’s ability to pay or write it off completely if the patient is indigent.

If you want to find out what Medicaid pays your doctor for a procedure or service, you can look up the current Medicare Medicare Physician Fee Schedule Search – regardless of what your doctor charges, this is what he or she is going to get paid by Medicare.

So next time you come across an article about unfair hospital charges written by an infuriated reporter, do what I do… skip to the sports page.

July 19, 2016