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Hospitalist Outsourcing Gaining Favor Among Hospital Chiefs

Philip Betbeze, for HealthLeaders Media, November 15, 2010
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A hospitalist not employed by a hospital sees an average of 19% more patients than his or her institutional counterparts, according to the Medical Group Management Association. So productivity is seen as better, but do they cost less? Are they easier to manage?

For Bill Gorski, MD, president and CEO of SwedishAmerican Health System in Rockford, IL, the answer to both questions is an unqualified yes.

His two-hospital health system, which also boasts a network of 17 primary and multispecialty physician clinics, began a hospital-managed hospitalist program with seven doctors in 2000. By 2007, frustrations with productivity and financial losses led to a discussion with IPC: The Hospitalist Company. A contract signed that year provides hospitalists and meets quality and patient satisfaction targets determined by the hospital, which now has 13 outsourced hospitalists.

"A good part was our issue on how we set it up and compensated docs," says Gorski, who explains that physician compensation under the employed model was based more on shift work than productivity. "From a productivity perspective, it just wasn't cutting it. At one point, [hospitalists] had seven days on and seven days off and only a minimal census. That just wasn't working for us."

As salaried employees, with virtually no compensation at risk for quality or productivity targets, SwedishAmerican's prior program was much less efficient, and ultimately more costly, Gorski adds. Morey Gardner, MD, is program director of the internal medicine residency program as well as director of the department of internal medicine at SSM St. Mary's Health Center, a 582-licensed-bed community teaching hospital in suburban St. Louis. It signed a hospitalist contract six years ago.

"In the absence of a close partnership, we would not have outsourced it," he says, emphasizing that at a teaching hospital, hospitalists "play a critical role because they have to contribute to the educational experience and be appropriate role models for the trainees."

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