HM: Front and Center
Hospitalists might be uniquely well positioned to bring more efficiency and value, as well as help hospitals manage that risk. With bundling, though, the big question is how they’ll be paid for their services amid the demands of multiple providers. “I’ve heard it described as a big potential food fight,” says Kirk Mathews, CEO of St. Louis-based Inpatient Management Inc. and a member of SHM’s Workforce Summit Committee.
In the scenario relayed to him by fearful hospitalists, a hospital administrator is seated at the table with pie in hand, with the various providers clamoring for a slice. “Everyone will be sitting there saying, ‘Here’s why we deserve this percent of the bundled payment,’” Mathews says. “Whether that’s an accurate portrayal or not, that’s the fear.”
Taken a step further, the scenario envisions hospitalists struggling to hold their own at the table against high-powered and higher-paid specialists. Some of the ACE Demonstration sites, however, have used physician-hospital organizations, or PHOs, to help decentralize the decision-making and ensure that stakeholders are represented. Similarly, if patient referrals to hospitalists from other providers drop—as they did for some of the ACE Demonstration bundles at Baptist and Hillcrest—could hospitalists lose their bargaining power through an erosion of recouped professional fees?
If bundling expands, Hillcrest’s CEO says hospitalists are instead likely to assume a more central role (see “Six Pieces of Bundling-Related Advice for Hospitalists,” right). “If we truly go to bundled payments on everything,” Dobbs says, “then I think everybody’s got to be at the table and contributing, and especially the hospitalist, because the medical DRGs, that’s going to be where the hospitalists drive the equation, and that’s going to be a huge part of this.”
As SHM’s CEO Larry Wellikson, MD, SFHM, wrote in The Hospitalist last year (see “Bundling Bedlam,” July 2009, p. 46), the bundling of Medicare Part A dollars that subsidize HM with Part B physicians’ payments might actually pave the way for a more professional discussion of the value that hospitalists deliver. With bundling, he wrote, “the need for subsidies or support could diminish or vanish.”
But that doesn’t resolve the issue of how to fairly size each bundle. Stuart Guterman, vice president of the Washington, D.C.-based Common-wealth Fund’s Program on Payment and System Reform, says one lesson from the capitation scheme of the ’90s is that an overemphasis on cost savings can lead to payments that are frequently insufficient to cover the costs of appropriate care.
“So there’s got to be more collaboration on what an appropriate amount is, and that’s a very important feature,” Guterman says. “Clearly, if you don’t pay enough, it doesn’t bode well for the success of any kind of payment approach. If you pay too much, it means you’re wasting money.”
The size and complexity of healthcare networks will influence how those bundle-related payments are negotiated. And in this case, several analysts say bigger isn’t necessarily better. “My own view is that it’s easier for a handful of hospitalists and a few community doctors in the hospital to come to an agreement on how they’re going to work within a bundle,” says Robert Berenson, MD, a senior fellow in the Urban Institute’s Health Policy Center and vice chair of the Medicare Payment Advisory Commission (MedPAC).
“My experience is that in rural communities, there’s a greater alliance of interests between the doctors and the hospitals, whereas in big urban areas they’re often competing with each other. So I don’t see that as the problem, frankly. I think this is probably better designed for smaller places where there’s already reasonably good relationships.”