Raise profits, MCO contracts with hospitalists
Hospitalists also may help PHO to grow
Employing physicians who specialize in treating patients during inpatient hospital stays may sound great from an efficiency standpoint, but will the payers who foot the bill go for the concept?
Not a problem, experts say. The big managed care companies already favor the hospitalist model because they are convinced it will improve efficiency and quality over time, experts say.
"Kaiser is the biggest HMO, and they’re using hospitalist groups universally now," says Winthrop F. Whitcomb, MD, a hospitalist at Mercy Hospital in Springfield, MA, and the co-founder of the National Association of Inpatient Physicians.
The hospitalist model also could cause a PHO’s primary care base to grow, says John Nelson, MD, a hospitalist in Gainesville, FL, and co-founder of the association.
For example, Nelson says, "Say a PHO needs more primary care doctors, and they talk to women physicians who have families, and they may not want to come to your practice because they’ll be on call all the time."
So the PHO tells them that they could work there and see patients strictly on an outpatient basis because hospitalists will do their hospital work. "Think about how much easier it would be to recruit doctors because you could recruit physicians who want a predictable schedule."
Improving the bottom line
Nelson, Whitcomb, and other experts offer this advice on how a PHO can improve its bottom line once it adopts the hospitalist model:
• Market hospitalist services to regional physicians.
Nelson says the hospitalist model fits in well with rural physicians’ desires and could be a good bargaining chip in obtaining their referrals.
"If a rural physician refers to a hospital in the city, he’d have to get on the phone and shop around to find a doctor who’s proba- bly busy with his own practice to take his patient," Nelson explains. "But if he’s referred to a hospitalist, he’ll get a yes’ the first time he asks."
Shands at AGH Hospital, where Nelson’s hospitalist group works, has a referral base of 60 to 70 miles, says Tim Rearick, director of business development.
Whitcomb says about 20 to 30 community physicians refer hospital services to the Mercy Hospital hospitalists. Besides the contract with Kaiser, the hospital has an arrangement with a company that staffs skilled nursing facilities to refer patients to the hospitalists.
• Gather data on outcomes to use in bargaining with MCOs.
"You need to hire the hospitalists, prove you can reduce lengths of stay, and then negotiate new contracts," advises Sandra McGraw, MBA, JD, principle with The Health Care Group of Plymouth Meeting, PA.
The managed care company will have a "Show Me" attitude, so collecting outcomes data is important, McGraw adds.
"You may not see a direct benefit tomorrow, but there’s a likelihood that you might see it over the long run," she says.
PHOs could study these indicators:
• Does the hospitalist model reduce hospital lengths of stay?
• Does it reduce referrals to specialists?
• Does it help to increase primary care physicians’ daily caseload?
• Does it increase patient satisfaction?
• Does it reduce duplication of services?
• Does it reduce hospital costs?
• Does it reduce readmission rates?
Managed care organizations believe it’s important to start discharge planning as soon as a patient is admitted, so the hospitalist can help with this more easily than the traditional intensivist, says Randy Killian, MBA, MS, executive vice president of American Association of Integrated Healthcare Delivery Systems in Glen Allen, VA.
Killian says this is because the hospitalist is always in the hospital and has more experience in treating very sick patients, so he or she could better determine the earliest time that a particular patient should be discharged.
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