One of the most common requests that I get this time of year is for a doctor or a service to ask for hospital support for a nurse practitioner or physician assistant. In each instance, you have to do an analysis to determine if adding an NP or PA for inpatient management is financially worth it. In Ohio, although PAs and NPs have different training, they have similar scopes of practice and are often used interchangeably. So in this post, when I refer to nurse practitioners, it can also mean physician assistants.
In most situations, you want to ensure that by using an NP, that you are at least breaking even with the cost of the NP by the revenue generated by the NP. In Ohio, NPs can write prescriptions and bill independently. In the hospital, there are two ways that NPs can provide care with regular daily visits. (1) They can do a “shared visit” so that they do part of the encounter and documentation and the physician does part of the encounter and also does part of the documentation – in this case, the reimbursement is 100% of the physician’s reimbursement. (2) They can do an independent visit in which case the physician does not need to see the patient or document anything – these are reimbursed at 85% of the physician’s reimbursement.
NPs can either be hired by the hospital or hired by the physician. The key difference is that if they are hired by the hospital, then they are a hospital employee and as such, none of their documentation can be used for the physician’s note in order to bill a daily hospital visit. Therefore, if a physician wants an NP to help with daily rounds and note writing, then the physician has to hire the NP. Otherwise, it is a Stark violation. This primarily applies to medical admission patients – since surgeons get paid by a global fee for a given surgery, they are not required to have the same degree of individual documentation for billing daily encounters and so documentation by a hospital-employed NP doesn’t affect the physician’s reimbursement for the surgery. For hospital-employed NPs, there are creative ways that the physician can lease a portion of the NP’s time from the hospital but the NP would still need to generate enough income to pay for the portion of time that the physician leases.
In our hospital, there is a bylaw that requires that a patient has to be seen by a physician daily. Therefore, having an NP on an admitting service limits them to doing shared visits – they cannot see patients independently without a physician also seeing that patient. However, on a consult service, the NP can see a patient without the physician also seeing the patients, since the admitting physician is also seeing/documenting a daily visit on that patient. Therefore, an NP on a consult service can either do shared visits or independent visits.
Lets take the situation when the NP is on a consult service and is seeing patients independently. The average NP salary is $100,000; add in 25% benefits and that comes to $125,000. NPs tend to usually work closer to a 40-hour work week so let’s say they see inpatients Monday through Friday and the physician covering the weekend sees all of the patients the NP was following during the weekdays. We will further assume that the NP works 46 weeks a year (4 weeks vacation and 2 weeks of holidays over the course of the year).
Therefore, the salary/benefits cost of the NP is $2,717 per worked week or $544 per worked day. In order to break even on the cost of that NP, the NP would need to generate $544 of revenue per day after expenses. In a private practice, there are relatively fewer overhead expenses but in an academic practice, there are a bunch of expenses, for example: Dean’s tax, departmental expenses, divisional expenses, malpractice, billing/administrative expenses, etc. All told these typically run about 21%. So, taking into account overhead, the NP would need to bring in $688 per worked day to fully break even.
In most practices, the physician will see the initial consult on a patient and the NP will see the return visits to that patient – a consult is usually a request for the learned opinion of an experienced specialist who has spent additional years of training to become an expert in an area of medicine and so the physician usually does the initial visit and lays out an impression and plan for that admission. So, we’ll assume that the NP is seeing only return visits and bills, on average, level 2 returns (CPT 99232) – Medicare pays $71 for this level of visits; adjusting this for the 85% reimbursement received by NPs for independent visits, this equates to $60 per encounter (a little less for Medicaid and a little more for commercial insurance). Therefore, based on Medicare reimbursement, the NP would need to see 11.5 inpatient return visits per day in order to pay for his/her salary. That would work out to about 40 minutes per return visit encounter which is very achievable (assuming that the consult service is large enough to support this volume of return visits).
Physicians have higher salaries than NPs and thus the cost per hour of a physician’s time is greater than the cost per hour of an NP’s time. Therefore, NPs can be cost effective when doing very time-intensive activities such as palliative medicine, smoking cessation counseling, diabetic education, etc. Also, you have to take into account what the physician will be doing if they don’t see the return consult visits. If the gastroenterologist will be able to do more colonoscopies or the cardiologist will be able to read more stress tests, then you can afford to lose money on an NP’s salary and still come out ahead because you are able to do a lot more of a more highly reimbursed activity than you otherwise would.
So, putting all of this together, what can we conclude:
- NPs need to see an average of 11.5 return visits per workday in order to break even financially.
- It can be cost-effective for an NP to see fewer than 11.5 return visits per day on procedure-oriented services such as surgery, cardiology, or gastroenterology since the NP frees up the physician to do more procedures that pay more per hour than return hospital visits.
- The practice’s payor mix affects the number of visits necessary to pay the NP’s salary – a practice with little Medicaid and a lot of commercial insurance may only need the NP to see 9-10 visits per day whereas a practice with a lot of Medicaid may need the NP to see 13-14 visits per day.
- It is financially more advantageous to have NPs do time-intensive activities (such as counseling, arranging follow-up testing, etc.) instead of having physicians do these.
- It is financially more advantageous to have NPs see uninsured/charity care patients since the cost of the NP’s time is less than the cost of the physician’s time.
If the NP is doing a shared visit (either with the admitting service physician or a consult physician), then the number of return visits needed to cover the NP’s salary is less – 9.7 per day. However, since the physician still needs to see each of these patients and do a component of the progress note documentation for each of these patients, that physician’s time now needs to be considered since all of the revenue from those 9.7 encounters will be going to cover the NP’s salary.
February 5, 2017
It takes a lot of time to become a doctor. And once you become a doctor it takes a lot of time to keep being a doctor. The amount of regulatory requirements per year are staggering. These add up to time costs and every doctor has to pay these time costs, regardless of the number of patients that you see. As you will see in this post, these costs add up quickly and result in those doctors who do a lot of teaching, research, or administration spending a disproportionate amount of their time meeting these requirements.
Fear has taught us that more is better. If we include everything in the patient’s chart in our progress note, then surely we’ll get all of the right elements to withstand a Medicare billing audit. And shouldn’t we include every lab test the patient has had in the past 3 years just in case the person reading the note wants to see them? As a referring physician, I don’t really care about reading a consultant’s 11-point review of systems and re-statement of the patient’s family history since I already know this information and it is just a click away on the EMR if I need it. When it comes to really communicating in an EMR, less is usually more.
There is a reason that we speak in sentences and that books are written using sentences. It is the most efficient way that we process the communications that are given to us. Tables and lists can help support the sentences but it takes a lot of time and brain energy to analyze tables and lists and in an EMR, most of them are just unnecessary fluff for the reader. When I get a communication from another doctor, what I really want to know is what their impression of the patient’s disease is and what they plan on doing about it. Sometimes that impression and plan is at the beginning of a long note of otherwise tabular documentation garbage, sometimes it is at the end, and sometimes it is in the middle – causing us to scroll up and down the notes trying to find out the information that we really want to know. The reader shouldn’t look at reading the progress note as a chore. The absolute best communications I get are from one of our surgeons who sends me a 1-paragraph letter saying what he thinks the patient’s problem is and what he is going to do about it. He communicates more in 2 sentences than most routed EMR notes communicate in 6 pages.
My return outpatient visits are scheduled every 15 minutes. That means that when I see a patient in the office after a hospitalization, I have 15 minutes to review the record, talk to the patient, do an examination, order tests and medications, and complete my office note. I don’t have 7 or 8 minutes to spare to hunt through the recent inpatient chart to figure out what was going on with the patient and what I need to specifically follow up on. So I go to the last pulmonary consult note in the inpatient chart to see what pulmonary problem the patient was in with and what I need to be focusing on. If the patient needs a follow-up chest x-ray, or pulmonary function tests, or a decision about when to stop a pulmonary medication, I’m expecting that note to have that information. In this sense, the inpatient progress notes are not just a communication to the other physicians and practitioners seeing the patient in the hospital, they are also a communication with the outpatient physicians to insure a smooth transition from inpatient to outpatient care. Often, I’m both the pulmonary consultant in the hospital and the outpatient pulmonologist for a given patient and in this situation, my inpatient notes are notes to me and the nurse practitioner that I work with.
William F. Buckley was the conservative host of the TV show Firing Line and was famous for using 5 syllable words that he would pull from deep in the bowels of the English dictionary. He sounded extremely learned and intelligent but the average person couldn’t understand half of what he said. He used his extensive vocabulary like a weapon in political debates. That is great for entertainment but terrible for trying to communicate critical medical information to a wide audience of healthcare providers who will be reading your note. So don’t describe a person as macrosmatic, valetudinarian, or pauciloquent in an EMR note just because it showed up this morning on your “word of the day” app – no one else knows what it means any more than you did yesterday.
There are fundamentally 3 reasons to have a progress note:
There are a lot of signs that the “great recession” that began in 2008 is over. The unemployment rate is the lowest that it has been in 12 years. Manufacturing output is back to pre-recession 2008 levels and close to a record high. However, manufacturing jobs are not; in fact, America has lost 5 million manufacturing jobs since 2000. The reason isn’t that they’ve been stolen from low wage countries, the reason is robotics.
The robots are gaining a foothold in our operating rooms, too. But in the OR, they are not replacing people. The most commonly used surgical robot is the da Vinci system. It runs about $2.5 million per robotic unit. Until last month, our hospital was the only hospital in town without a da Vinci robot but we recently purchased one in order to grow our hernia repair program and our gynecologic surgery program. You see, we compete with our neighboring hospitals to attract surgeons and younger surgeons want access to the robots that they used when they were training as residents and fellows. If you don’t have a robot, the top young surgical recruits are going to go across town to your competitor hospital. Moreover, many patients have a perception that surgeries done with a robot are better than those done solely by hand. Having a surgical robot is no longer a competitive advantage for a hospital, it is a competitive necessity.
A couple of weeks ago, I got one of those calls that you dread as a medical director. I was in the office seeing pulmonary patients and one of the hospital supervisors paged me to tell me that a nurse covering patients on one of the hospital floors smelled alcohol on the breath of one of the doctors. She then asked one of the other nurses if she also smelled alcohol and the second nurse said yes, she also smelled alcohol.
I was reading over the 
However, I’d like to think that there is a fourth explanation. The physicians who were most likely to say that they would choose medicine again were in specialties where there is temporal continuity of the doctor-patient relationship. By that I mean that those physicians tend to have patients that they take care of for years and even decades and develop long-standing bonds with those patients.
In recent years, we have been under increased pressure to increase productivity. I’ve often been asked by business leaders to increase my new-to-return patient ratio by seeing more new patients and transferring return patients to advanced practice providers to see to see for follow-up visits. From a short-term revenue standpoint, this makes total sense, because those new patient visits pay better and have a lot of down-stream revenue to the health system. But in the long-term, it is the return patient visits that create the bonds that make physicians say, “If I had to do it all over again, I would”.
A couple of months ago, Ohio Senator Sherrod Brown visited our hospital to do a press announcement about legislation that he and Senator John McCain were sponsoring. After the formal event, I spent a few minutes speaking with Senator Brown. I was telling him about how we had seen a decrease in our emergency department visits ever since Ohio enacted Medicaid expansion. He challenged me by saying that the published data did not support the contention that Medicaid expansion reduces ER visits and in fact, some literature suggested just the opposite, that states that participated in Medicaid expansion actually saw an increase in ER visits. My explanation was that our ER was different in that we had an extremely high percentage of uninsured patients prior to Medicaid expansion, our hospital is in what was previously a “primary care desert”, and that since Medicaid expansion, we have greatly increased our primary care footprint in the neighborhood. Senator Brown remained skeptical but the next week, I got a handwritten note from him thanking me for my comments and telling me that it was a good conversation.
After Medicaid expansion, our hospital’s admitted patient uninsured rate fell to 2.3%. That’s huge. And the percent of poor Ohioans without insurance dropped from 32% to 14%.
The newly released Ohio Medicaid Group VIII Assessment report now shows that what we have observed is real – that Medicaid expansion has reduced ER visits. For adults between 19 and 44 years old, ER use dropped from 1,557 to 1,279 per 100,000 – an 18% reduction. For adults between 45 and 64 years old, ER use dropped from 1,349 to 877 per 100,000 – a 35% reduction.
Anyone who has been to our hospital recognizes it right away. It is circular. If you are driving from the east into Columbus on interstate 70, it rises up in front of you like a giant cylinder on the horizon. Each nursing unit is round and the patient rooms are all on the outside, like slices of a gigantic pie.
OSU East’s tower had a (nearly identical) twin sister building in Columbus, the Christopher Inn which was designed by African-American architect, Leon Ransom and was built by the Elford building company in 1963. For 25 years, it was Columbus’s premier downtown hotel and local famed jazz musician, Bob Allen and his trio played in the bar nightly. On our wedding night in 1983, my wife and I stayed at the Christopher Inn and I vividly remember the two of us walking down the curved stairs to the bar with her wedding dress flowing down the stairs behind her with Bob Allen playing a jazz song. Sadly, The Christopher Inn was demolished in 1988 – although ultramodern in the 1960’s, by 25 years later, it was dated and out of style.
Ohio State University Hospital East first opened as St. Anthony’s Hospital in 1891, built and operated by the Sisters of the Poor of St. Francis. In the 1969, St. Anthony’s Hospital opened its new tower building, also designed by Leon Ransom and constructed by the Elford company.
So, after a lot of negotiation, the Sisters struck a deal with Blue Cross. The hospital would be allowed to have all private rooms but they would have to be exactly 1/2 the size of a standard semi-private room. In exchange, Blue Cross would pay semi-private room rates for inpatients admitted to the hospital.
At the OSU Medical Center, we have several different hospital buildings. Our newest building is the new James Cancer Hospital, a beautiful 21-story building on Ohio State’s campus that opened in 2014. It has the largest private rooms at 314 sq ft. The Ross Heart Hospital (built in 2004) is the second newest building with private rooms at 302 sq ft. Before that was the original James Cancer Hospital building (now the OSU Brain and Spine hospital building) that originally opened in 1990 with private rooms that are 239 sq ft. Rhodes Hall is one of two buildings of the main University Hospital and opened in 1976 with semi-private rooms that have now largely been converted into 224 sq ft private rooms. Doan Hall is the oldest of the OSU Medical Center buildings still in operation and was built in 1951 – its semi-private rooms have been largely converted to private rooms that are 214 sq ft.
“39 yo female presented in cardiac arrest after being found down with needle in her arm. Multiple epinephrine and Narcan given prior to arrival with no ROSC. Resuscitation continued briefly with PEA on monitor and patient was pronounced dead.” Every week, we review all deaths in the hospital. One of our quality nurses summarizes each case in a couple of sentences. Every 2-3 weeks, there is one similar to this one from last week. The perpetrators: heroin and fentanyl.
By 500 BC, the secret of opium poppy cultivation spread to the Akkadians, the Assyrians, the Egyptians, and then the Greeks. Two thousand years later in 1,500 AD, Europeans had figured out that you can get a stronger effect of opium by smoking it rather than by drinking it and from this was born the opium dens. With fast and sturdy sailing ships, the Europeans were eager trade with China for spice, porcelain, and silk. But Europe needed something to take to China in return and that something was opium.
In 1874, a chemist in London was experimenting with morphine by mixing it with various acids and he created diacetylmorphine. His work was forgotten and then in 1897, Felix Hoffman, working for the Bayer chemical company accidentally synthesized diacetylmorphine when he was trying to produce codeine. Scientists at Bayer had just invented another drug that they called aspirin and the head of Bayer decided to move forward with diacetylmorphine first because it was felt to have more commercial potential than aspirin. They called their new product heroin and said that it was 10 times more effective then codeine as a cough medicine and more effective than morphine as a pain reliever. They also pushed it as a treatment for asthma, bronchitis, and tuberculosis. In its first year, Bayer produced 1 ton of heroin. It was initially claimed to be completely non-addictive but soon there were heroin addicts world-wide and by 1913, Bayer decided to stop producing the drug.
Second, coincident with this was the burgeoning appetite of Americans for opioid prescription pain pills resulting in a rather dramatic increase in the American demand for opioids. With a recent nation-wide crackdown on excessive opioid prescriptions, the supply of pills dried up. The reduction in the demand for Mexican marijuana and the increase in demand for opioids resulted in a ramped up production in Mexican heroin as business shifted from cannabinoids to opioids. It is simple supply and demand – the heart of capitalism.