The principal goal of this magazine is to promote cost reduction while maintaining or more ideally improving the quality of medical care. The discussion in the first year of OMRUM’s existence has largely focused on the “big strokes” of difficulties with medical care in the United States and some equally big strokes as to how to fix them. However, the problem with managing patients in the hospital has become more vexing the last 20 years. As the number of patients increase and the number of adult medicine physicians decrease, even the time to drive from one’s office to the hospital and back to see inpatients (patients in the hospital) becomes a challenge. Thus, many primary care physicians have dropped their inpatient service and a vacuum has been created.
1 of the most resource challenging types of medicine to practice is inpatient medicine. These patients are the sickest. The avenues of investigation (if the diagnosis is not established before admission) are potentially quite broad. Once a diagnosis is established, the choice of therapeutics is often quite broad. In pursuing the best possible care for the patient, the physician also has a responsibility to be a careful steward of critical resources.
In this author’s training, past mentors emphasized this twofold obligation (good care for patients and responsible stewardship). As educators, they emphasized that the best physicians used the fewest tests and the most effective resources. This is in distinction to the so-called “shotgun” approach which was sometimes pursued by either physicians early in their career or, candidly, less competent physicians. However, as fewer primary care physicians maintain their inpatient services, the vacuum has served as an opportunity for hospitals. They are now hiring so-called “hospitalists” who are generally internists who do no outpatient service. Instead, hospitalists take care of inpatients filling the vacuum of care left by PCPs or of emergency room patients needing admission but do not have any primary care physician.
However, hospitalists have an inherent conflict of interest. Because hospitalists generates little revenue for the average hospital above the cost of a hospitalist program, there is an incentive for the hospital to use hospitalists as revenue making entities. Specifically, hospitals despise having empty beds. Indeed, for marginally ill patients who would not necessarily make criteria for admission clinically, the hospitalists will feel pressure to admit the patient to promote revenue for the hospital. This is a conflict of interest because in theory, as physicians, they are obligated to serve the patient’s best interests, even if that does not serve the hospital’s best interest. Many patients could satisfactorily go home with an uncomplicated pneumonia and not require admission. Follow-up would be done as an outpatient. However, empty hospital beds are an expensive opportunity cost of the hospitals cannot afford to endure. If you think this is a sad exaggeration, please continue reading.
A December 7, 2023 article by Chris Tachibana, Ph.D., M.S. (For-Profit Hospitals Admit at Higher Rates from Emergency Departments Than Nonprofits) follows the research about this relatively new phenomenon. It seems to parallel the rise of the hospitalist which makes sense. The hospitals either outright own the hospitalists’ practices or contract with a hospitalist group. Either way, the hospital exerts enormous pressure on the behaviors of the hospitalists. This is, of course, entirely illegal and reportedly the US Department of Justice is investigating this phenomenon. This is nothing new. In December 2012, the venerable newscast 60 Minutes (“The Cost of Admission”) spoke to physicians working in a health chain owning 71 hospitals. Case managers and physicians were under pressure to meet quotas of admissions. If these personnel were not compliant or if they did not get into the “spirit” of things, they would be admonished or even sacked. This author believes that this is rampant and even not-for-profit hospitals need to make money to continue. It is simply that the for-profit hospitals feel compelled to generate better numbers then the not-for-profit colleagues.
Having seen this firsthand, I offer a few modest proposals as how we as a country might address this.
First, physicians should never be allowed to work for a hospital directly. States such as California, Texas, and others are prescient in not allowing hospitals to hire physicians. As noted above, the financial advantages of controlling physicians are simply too tempting for most hospitals to ignore. A recent, unanticipated trend within the medical community is the disinterest younger physicians have in running their own groups, preferring instead to work for larger entities such as hospitals, urgent care centers, or the like. In these situations, fiduciary responsibility to the employer conflicts with best care practices for the patients. Larger medical corporations are very adept at releasing physicians who are not loyal by reporting a lack of “good citizenship”. The resources of the hospital compared to the physicians is quite asymmetric.
The next suggestion involves global capitation which obviates the incentive for excessive emergency room admissions. With global capitation, there’s no incentive to fill an empty bed since this will not earn extra money for the hospital. Indeed, spurious admissions will hurt the hospital. A good question to ask at this point is will hospitals adapt to this by sending sick patients home. This is harder to do for a few reasons. ER physicians, nurses, and paramedical personnel all have a more difficult time sending sick patient home than admitting marginally ill patients. Sending a sick patient home usually means that the patient will return even sicker. Similar to the Goldilock’s paradigm, one does not want to admit to the hospital marginally ill patients if there is a good outpatient pathway for them. Nor does one want to send home a patient who’s ill enough to need admission because failure to intervene early could lead to sicker, more expensive patient.
Finally, given that under an efficient system, everybody would have their own PCP, a new system for hospital care should be advocated. Instead of hospitals hiring physicians for inpatients (i.e., hospitalists), likely the better system would be a hybrid where the hospital hired mid-level clinicians who would work with properly credentialed patient’s PCP. The PCP would be on-site once daily rounding on patients and setting goals for all the admission problems along with management of chronic issues. The hospital mid-levels would be on-site every day also seeing the patient at least daily and expedite diagnostics and therapeutics for the patient. The PCP would allow continuity of care for the patient up to the time of admission, through the admission, and after discharge. Since mid-levels salaries are approximately half of the MD hospitalists, the hospital could recover their salaries because of improved length of stays. If the patient’s PCP was not responsive to the mid-levels’ concerns about management, the PCP might undergo counseling, temporarily lose privileges, or permanently lose privileges depending on the situation. In other words, there would be a checks and balances built into the system. Both clinicians (the patient’s PCP and the assigned mid-level) would have focused incentives to avoid unnecessary testing and consulting because of the global capitation system mentioned previously.