At its smaller hospitals, HNM incentivized orthopedic admissions so that more surgical cases would stay local. Hospitalists were trained to perform stress tests so the hospital can provide testing on weekends. The group pays hospitalists a bonus for each admission, so when the ED calls, the hospitalists say, “Thanks! I’ll be right there.” The group also increased staffing on weekends.
The end result: It improves the hospital’s bottom line by shortening length of stay, and improving quality of care, patient satisfaction, and group morale.
“When we align the incentives, everybody wins,” says Dr. Friar. “The system has more capacity, the patients get better care, and the hospitalists no longer feel that weekend shifts are a huge burden.”
- Build “system-ness.” Sharing providers between hospitals has helped HNM build a cohesive system of quality care. What began as a way to cover shifts has created an interinstitutional camaraderie that allows for the easier flow of patients, improved communication, and widespread use of best-practice models. Sharing such resources as billing, credentialing, benefits, recruiting, and payroll has helped the group stay competitive, Dr. Ahlstrom says.
Growth in a Down Economy
Jude R. Alexander, MD, president of Inpatient Specialists in Rockville, Md., a bedroom community about 12 miles northwest of Washington, D.C., has continued to grow his group despite the down economy. Hospital admissions in the D.C. area decreased sharply in the second half of 2008, and patient volume rebounded slowly in the first half of 2009.
Inpatient Specialists initially downsized its staff, then it used flex physicians to meet demand as volume increased.
Despite national hospital trends of budget shortfalls, downgraded bond ratings, and increases in uninsured patients, two of Inpatient Specialists’ client hospitals chose to invest in the HM program. Dr. Alexander credits the vote of confidence to his group’s track record of optimal resource utilization, which has inherent cost savings in the millions.
Dr. Alexander also recommends HM groups in tough economic circumstances should:
- Maintain good relationships with partner hospitals;
- Run a lean business;
- Focus on excellent customer service to patients, their families, and their PCPs; and
- Build strong alliances with employed physicians by eliciting and giving constructive feedback.
“Following this basic strategy, Inpatient Specialists has experienced 7% growth in patient volume in the past 12 months,” Dr. Alexander says. “We’ve expanded to 40 full-time equivalent hospitalists, and 40 part-time employees.” Inpatient Specialists has its eye on geographic expansion, as well. The group is targeting services throughout the Capitol region—Maryland, Virginia, and the District of Columbia.
Bankruptcy to Profitability in One Year
In 2007, a few months after the 99-bed Auburn Memorial Hospital in Auburn, N.Y., was forced into bankruptcy, James Leyhane, MD, and his hospitalist group were displeased that they weren’t in control of their own program. Physicians had started leaving the hospital; Dr. Leyhane himself had interviewed at another hospital. “Our CEO approached me to ask what would make it right,” Dr. Leyhane recalls. “I said, ‘We’d need to be employed by the hospital.’ ”
Rajeev Alexander, MD
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The hospital and the private, six-physician internal-medicine group that employed the program entered bids on the HM group. In March 2008, the HM group became contractually employed by the hospital. Dr. Leyhane was given full control as hospitalist director of Auburn Memorial Hospitalists.
As a result of the new alignment, two major shifts took place. First, the hospital CEO more aggressively recruited subspecialists and surgeons. With the HM group now affiliated with the hospital, recruiting surgeons to Auburn Memorial became much easier. Second, more primary-care physicians (PCPs) began sending their patients to Auburn Memorial.