PCPs Responsible for Allocating About 90% of Total Hospital Costs

In a recent blog (see: Defining and Delineating the Changing First Tier of Healthcare), I wrote the following regarding the evolving role of physicians in the first tier of healthcare (i.e. primary care):

Physicians work primarily in a supervisory role. The majority of them are, and will be in the foreseeable future, employees of health systems....Direct contact with patients and triaging will be mainly the responsibility of nurses, nurse clinicians, physician assistants, and other health assistants. All of these later personnel will be increasingly guided by diagnostic and predictive algorithms that will allow them to identify the more seriously sick patients and refer them to physician specialists operating at the higher levels of care.

On July 23, 2019, Deloitte Consulting presented a webinar entitled: The future of work in life sciences and healthcare: Are you ready? The presentation was outstanding and novel and I urge you to review the entire PowerPoint deck. However, and for the purposes of this note, I cite the following copied from Slide #11 in the deck:

 Decisions made by Primary Care Physicians influence almost 90% of total hospital costs through referrals, testing, and hospitalizations.

This statement caused me to realize that my quote above the role of physicians in the first tier of healthcare was accurate but somewhat incomplete. One of the most important "supervisory" functions of primary care physicians is to approve specialist referrals, expensive testing and imaging orders, and hospital admissions generated often by nurses and PAs operating in the first tier. Putting all of this together. we can arrive at the following conclusions about how roughly 90% of hospital costs are, and will be, accounted for by actions taken in the first tier of care:

• The bulk of the delivery of services in the first tier will be the responsibility of nurses, nurse clinicians, physician assistants, increasingly assisted by clinical decision support (CDS) software (see: Algorithmic Triaging of Patients for Routine Care; a Path to Lower Costs).
• Primary care physicians, in their supervisory role, will co-sign and approve many of these orders, particularly the most expensive and consequential ones such as referrals to specialists and admission to the hospital.
• The increasing deployment of clinical decision support (CDS) tools in this first tier will provide, for the first time, an effective tool to control hospital costs in a standardized and programatic way.
• The design and development of these CDS tools will become one of the most important growth areas in clinical informatics. An absolute necessity will be testing these software tools in a real-world environment to ensure that they optimize decision-making, conserve resources, and don't harm patients.