I have been closely following the growth of the number of hospitalists over recent months (see, for example: Office-Based Medical Specialists Abandon Hospital Call Responsibilities; Hospitals Use Their Medical Schools, Residencies for Later Physician Recruitment). Now comes a study indicating that inpatients cared for by hospitalists, and reimbursed by Medicare, cost the government more money than those cared for by personal physician (see: Hospitalist care costs Medicare an extra billion dollars a year: University of Texas Medical Branch at Galveston study), Below is an excerpt from the article:
Inpatients cared for by hospitalists have higher Medicare costs in the 30 days after discharge than those whose personal physicians oversee their care. This is partly because hospitalists’ patients are more likely to be discharged to a rehabilitation or nursing facility than to their homes and more likely to have subsequent emergency room visits and readmissions. Such “cost shifting” translates to more than $1.1 billion in Medicare expenses annually, contradicting beliefs that hospitalist care reduces overall costs. These are the primary findings of the first assessment of hospitalists’ impact on direct hospital costs, post-discharge medical utilization and related expenses [in a recent study]....Using a sample of nearly 60,000 hospital admissions at roughly 450 hospitals nationwide, researchers found that care by hospitalists...was associated with shorter stays...and lower hospital charges ($280) than for inpatients seen by a primary care physician. However, savings were offset by post-discharge Medicare costs roughly $330 higher for patients cared for by hospitalists. Rehospitalization accounted for 59 percent of the post-discharge costs, with nursing facilities and other outpatient providers accounting for 19 and 22 percent, respectively....The findings, which also indicate that pressure to reduce length of hospital stays may promote early discharge to other health care facilities rather than home, add to concerns regarding hospitalists’ potentially adverse effects on continuity of care. “Hospitalists are typically employed or subsidized by hospitals, which may make them more susceptible to behaviors that promote cost shifting,” said [one of the study authors]. “Bundling payments based on episodes of care – including post-acute care and follow up after discharge – may reduce these incentives, clarify the cost impact of different models of hospital care, and improve communication and continuity of care among health providers.” The study comes on the heels of Medicare’s plans to establish a performance measure that would make hospitals accountable not only for the cost of care they provide, but also the cost of services performed by other health care providers in the 90 days after a Medicare patient leaves the hospital.
This study should come as no surprise to anyone. Here's what I think may be occurring:
- Hospitalists work for health system CEOs who place a high value on a shorter length-of-stay (LOS) for patients. The will thus tend to discharge patients as soon as possible.
- CEOs have been conditioned over the past many years to relish shorter LOSs because the measure has attained the status of a quality indicator and also because shorter LOS patients are more profitable.
- I also assume that hospitalists tend to favor discharge of patients to rehabilitation or nursing facilities rather than to home because they do not know them well and also to ensure a speedier, medically supervised recovery.
Almost everyone agrees about the solution to this problem. It is stated clearly in the excerpt above: "Bundling payments based on episodes of care, including post-acute care and follow up after discharge, [should] reduce these incentives, clarify the cost impact of different models of hospital care, and improve communication and continuity of care among health providers."
In the face of such a new Medicare policy, hospitals, hospitalists, and PCPs employed by the hospitals will presumably take the appropriate measures to reduce the costs associated with hospitalizations as well as the 90-day post discharge period. However, I remain suspicious that this new approach will eliminate all, or even most, of cost-shifting for Medicare patients. I suspect rather that other cost-shifting strategies will be developed in response to the policy but I am not quite sure exactly what they will be.
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