I became a hospitalist in the 1980s, in the same year CDs outsold vinyl records for the first time. During the next eight to 10 years, I watched and participated in the growth of hospitalist practices around the country. But, by the late 1990s, a new phenomenon had begun to appear occasionally: failed hospitalist practices. I became interested in the relatively few practices that started up only to fail and dissolve. I wanted to know why they had failed and what happens at a hospital that loses its hospitalist practice?
It is worth remembering that the whole idea of hospitalist practice was more controversial in the late 1990s than it is today. Many doctors saw the concept as an invention of managed care, with the sole aim of reducing costs. When a practice collapsed, some doctors at the institution were usually delighted because, as far as they were concerned, this proved that hospitalist practice was a bad idea. Yet, to the dismay of these critics, the failure of a practice was reliably followed by an intense—sometimes even frenzied—effort to create a new and improved hospitalist practice. In fact, I’m not aware of any institution in which a hospitalist practice failed and a new one didn’t replace it. I suspect such places exist, but they’re not common.
Creating a replacement hospitalist practice is usually stressful and expensive, so of course it’s better to get it right the first time. To that end, I think every institution should be aware of the most common reasons practices fail and should work to avoid these problems. What follows are the issues I’ve seen come up regularly. While they may not cause the failure of a whole practice, they are likely to result in physician dissatisfaction and/or increased turnover.
1) Failure to appreciate rapid growth in volume in a new practice: Unquestionably, this is the most common mistake made by new hospitalist practices. Patient volume often grows dramatically—even within the first weeks a new practice is in operation. Some institutions mistakenly plan on growth rates similar to those experienced in other types of practices. When growth proves much more rapid, the first few hospitalists in the practice can become worn out and might even quit. This has led to the collapse of some practices. There are two ways to guard against this problem. One is to continue recruiting (even with no clear need for additional staff), anticipating the length of time it can take to recruit new hospitalists. In other words, most practices should never stop recruiting.
The other, less desirable but sometimes unavoidable strategy is to have the practice start with a limited scope of work that increases as new hospitalists are added to the group. For example, the practice might accept only unassigned medical admissions from the emergency department (ED) at the outset; once a predetermined number of hospitalists has joined the group, it is ready to start accepting referrals from primary care doctors and other sources.
2) Hospitalists who have an employee mentality, rather than that of a practice owner: Hospitalist practices tend to attract doctors who simply want to see patients, leaving the management of the practice and its financial health to others. This tendency may be exacerbated in practices that compensate hospitalists in a way that is not connected to the overall financial health of the practice (e.g., a straight salary).