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