A more dramatic—albeit smaller—affirmation of HM as an efficient force has come from a study of patients admitted to 200-bed Olive View-UCLA Medical Center in Sylmar, Calif. The study, led by assistant medical director Scott Lundberg, MD, concluded that the arrival of an academic hospitalist program led to a one-year increase of $2.3 million in reimbursements from Medi-Cal, California’s Medicaid program.4
“Most other places that have demonstrated the cost-effectiveness of hospitalists generally point to reducing length of stay, which therefore reduces the costs,” Dr. Lundberg says. Under Medicare’s diagnosis-based reimbursement (DRG) system, hospitals could get paid the same amount whether the patient stays one day or five.
Medi-Cal, however, uses a straight-up per diem reimbursement system. “So reducing someone’s length of stay is not necessarily desirable if Medi-Cal would have paid you for all of those days,” Dr. Lundberg says. The state’s Medicare program also can deny coverage for days deemed medically unnecessary after a review of patient charts.
Hospitalists, he says, helped boost revenue in two ways. First, the program helped the hospital avoid denied coverage days by ensuring that patients stayed only as long as necessary. Average LOS, in fact, dropped to 1.92 days from 2.48 days, decreasing the Medi-Cal denial rate to 31.8% (from 43.8%) and bumping up the average reimbursement per inpatient day to $955 from $787.
Hospitalists also helped alleviate the work-hour limits for residents imposed by the Accreditation Council for Graduate Medical Education (ACGME), which had effectively capped the number of inpatients the center could admit. Because Olive View-UCLA receives per diem payments from Medi-Cal, making room to accept more patients into the hospital has meant increased revenues. Among the other benefits, the program has improved patient satisfaction and relieved some of the pressure on teaching teams.
With $310,000 for salary outlay in the hospitalist program’s first year, the study found a net cost benefit of $2 million. “One of the real challenges in getting this hospitalist thing going was getting our administrators to shell out the money for the salaries,” Dr. Lundberg says. The study demonstrated that a hospitalist program not only pays for itself, but also can substantially ramp up revenue. “I’m guessing that others, especially at public hospitals, face the same challenges,” he says. “I’m hoping they can point to this analysis and say, ‘Look, here’s what L.A. County did. They were able to show a net increase in revenue from this hospitalist service.’ ”
On the opposite side of the country, hospitalists are pointing to a success story in pediatric care. At the 120-bed Children’s Hospital at Montefiore at Albert Einstein College of Medicine in the Bronx, N.Y., a recent study concluded that establishing a pediatric HM program led to a significant reduction in LOS for patients with asthma or bronchiolitis.5 Nora Esteban-Cruciani, MD, MS, assistant director of pediatric hospital medicine and lead author of the report, which was presented at HM11, says it’s the first study to demonstrate such an effect for asthma in an inner-city academic setting.
Compared to a traditional resident-attending team, care administered by a resident-physician’s assistant-hospitalist team reduced LOS for bronchiolitis by 15.5% and asthma by 11.8%. With the 378 hospital-bed days saved annually, Children’s Hospital at Montefiore achieved an estimated savings of about $944,000 before taking salaries into account. “We anticipate seeing similar benefits in other groups of patients, and the total savings will far exceed the hospitalist salaries,” Dr. Esteban-Cruciani says.
After the pediatric HM program launched, her study also documented a 17% to 25% decrease in rehospitalizations among asthmatic children at four, six, and 12 months after their initial hospital discharge. As a result of the demonstrated value, Dr. Esteban-Cruciani says, the children’s hospital is expanding its HM program and hiring another 4.5 full-time equivalents.
