Hospitalist Alignment

Every medical center desires for its objectives, incentives, and interests to be closely aligned with those of its hospitalists. While effective alignment is highly desired, our experience reveals that achieving such state of alignment is a rare phenomenon. The daily demands on hospitalist services and individual hospitalists certainly come into play, but a more likely culprit may simply be the disparate financial systems hospitals and physicians operate within.

Disparate Incentives

The fact that hospitals and physicians operate under disparate financial systems and incentives is well established. Consider the following as it relates to hospitals and hospitalists:

  • Medicare Inpatient Reimbursement
    • Hospitals are reimbursed via DRG’s – a Case Rate methodology
    • Hospitalists are reimbursed via CPT Encounters – a Daily Activity methodology
  • Medicare Case Mix Index impacts hospital reimbursement but not that of hospitalists
  • Medicare penalizes hospitals for excessive readmissions yet hospitalists are unaffected
  • The Medicare Hospital Value-Based Purchasing (HVBP) Program rewards hospitals for high levels of quality and penalizes those with sub-standard performance.

    Hospitalists may participate in the Merit-based Incentive Payment System (MIPS) - designed to tie payments to quality and cost-efficient care, drive improvement in care processes and health outcomes, increase the use of healthcare information, and reduce the cost of care.

    There is virtually no correlation between the HVBP and MIPS indicators.
  • Hospitals are denied payment by Medicare and other major insurers for inpatient stays that exceed certain “medical necessity” thresholds – while hospitalists may continue to bill for daily encounters occurring beyond such thresholds.

Hospital Case Managers and Hospitalists

In a hospital inpatient setting, a significant responsibility of the typical Case Manager is to help manage the inpatient episode of care, identify likely post-acute patient needs, facilitate the discharge process, and coordinate the transition from the acute care to the post-acute care setting.

Currently, hospitalists admit the majority of patients in the typical hospital. Hospitalists are rapidly trending towards being the admitting/attending physician of record for every patient admitted to a
hospital, with specialists consulted as needed.

Thus, hospital case managers now rely primarily on hospitalists, and will in due time rely exclusively on hospitalists (as it relates to the “physician-dependent” element of their responsibilities).

Yet our experiences have yielded the following observation: hospitalists and hospital case managers typically do not work in an integrated fashion. This observation is evidenced by the following:

  • Case Management and Hospitalist Services rarely report to the same hospital executive
  • The goals and objectives of Case Managers and Hospitalists Services are established independently
  • The daily priorities and workflow of Case Managers and Hospitalists are rarely synchronized
  • While Case Managers push to lower lengths of stay and improve discharge efficiency, hospitalists tend to follow the path of least resistance as it relates to patient/family preferences

We believe the day has arrived when the Case Management function and the Hospitalist Service should be formally integrated.

Aligning Interests:

The Hospitalist Alignment Model®

So the (1) disparate financial incentives in play for hospitals and hospitalists, coupled with the (2) lack of coordination and integration between case managers and hospitalists; served as motivation to develop a model which dramatically re-aligns interests of hospitals and hospitalists. This quest resulted in an exciting new Model we affectionately call the Hospitalist Alignment Model, and which is illustrated below:

Furthermore, adoption of the Hospitalist Alignment Model has the innate ability to produce a tangible Return on Investment (ROI) to hospitals and health systems on their hospitalist programs. The innovative comp plan, re-aligned team, and new team focus have the capability to substantially reduce, the expense of most hospitalist programs:

Salient MD