Todd Nelson, MBA, a technical director at the Healthcare Financial Management Association in Chicago, agrees that the upward trajectory of hospital support payments will have to end, likely in concert with the expected payment reform of the next five years. But, he adds, the mere fact that hospital administrators have allowed the payments to double suggests that they view the support as an investment. In return for that money, though, C-suite members should contract for and then demand adherence to performance measures, he notes.
“Many specialties say, ‘We’re valuable; help us out,’ ” says Nelson, a former chief financial officer at Grinnell Regional Medical Center in Iowa. “In the hospital world, you can’t just ‘help out.’ They need to be providing a service you’re paying them for.”
SHM President Joseph Li, MD, SFHM, associate professor of medicine at Harvard Medical School and director of the hospital medicine division at Beth Israel Deaconess Medical Center in Boston, could not agree more. “The way I view monies that are sent to a group for nonclinical work is exactly that,” he says. “It’s compensation for nonclinical work. Subsidy, to me, seems to mean that despite whatever you’re doing, you need some more to pay because you can’t make your ends meet. That’s not true. What that figure is, for my group and for the vast majority of groups in this country, is really compensation for nonclinical efforts.”
HM groups should take it upon themselves to discuss their value contribution with their chief financial officer, as many in that position view hospitalist services as a “cost center” rather than as a means to the end of better financial performance for the institution as a whole, says Beth Hawley, senior vice president with Brentwood, Tenn.-based Cogent HMG.
“You need to look at it from the viewpoint of your CFO,” she says. “It is really important to educate your CFO on the myriad ways that your hospitalist program can create value for the hospital.”
There is nothing else inherent in hospital medicine that makes this expensive, other than scheduling. Absent a very difficult payor mix, it’s the scheduling and the number of days worked that drives the cost.
—Jeff Taylor, president, COO, IPC: The Hospitalist Co., North Hollywood, Calif.
Hospitalist John Bulger, DO, FACP, FHM, of Geisinger Medical Center in Danville, Pa., says such education should highlight the intangible values of HM services, but it also needs to include firm, eye-opening data points. Put another way: “Have true ROI [return on investment], not soft ROI,” he says.
Dr. Bulger suggests pointing out that what some call a subsidy, he views as simply a payment, no different from the lump-sum check a hospital or healthcare system might cut for the group running its ED, or the check it writes for a cardiology specialty.
“There’s a subsidy for all those groups, but it’s never been looked at as a subsidy,” he adds. “But from a business perspective, it’s the same thing.”
The Future of Support
The relative value, justification, and existence of the support aside, the question remains: What is its future?
“Subsidies are not going to go away, because you can’t recruit and retain physicians in this environment for the most part without them,” says Troy Ahlstrom, MD, SFHM, CFO of Hospitalists of Northern Michigan, a hospitalist-owned and -managed group based in Traverse City. “Especially not when physicians coming out of residency have a desire to maintain a reasonable work and personal life, with fewer shifts where possible, fewer patients per shift. And they also have income goals that they have to maintain with that because they’re coming out of training with larger debt loads than ever before. That’s the tricky part for CMS and the federal government moving forward.”