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Employment Models for Hospital Medicine

Karen Minich-Pourshadi, for HealthLeaders Media, February 13, 2011
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As hospitalists continue to see steady increases in their compensation, hospital CFOs need to consider whether employing or outsourcing for such services is the best option for their facility, both in terms of financial viability as well as improved quality of care.

With a physician shortage, there’s a growing need for more physicians and a body of evidence suggesting hospital medicine physicians could be a great source of revenue for those short any doctors. Be it through employment or contract agreements, in the past few years, the need for hospitalists has increased in both demand and popularity, according to the Society for Hospital Medicine.

Traditional internists are trying to manage a full-time office practice in addition to rounding on patients in the hospital and are finding it leaves them little time for much else. Many of these doctors are turning to their hospitals for a solution that allows them to stay in their offices to tend to those patients. The traditional internal medicine physician’s role has evolved and divided into two separate elements: the outpatient internist and the hospitalist who treats patients in the hospital.

Such was the case at a Long Island hospital where the primary care physicians requested a hospitalist program be established. With net revenue of $376 million, the 435-licensed-bed South Nassau Communities Hospital in Oceanside, NY, launched its hospitalist program just over three years ago.

Haiwen Ma, MD, director of hospitalist services, has since watched the hospital medicine program flourish, going from two hospitalists to 11 hospitalists and four primary care physicians to more than 50 primary care physicians who refer inpatients to hospitalist services out of the 788 physicians on staff.

With over 30,000 hospitalists working in the United States, the demand for hospitalist physicians is competitive and, in most areas, outpacing the supply, though there are regional disparities where saturation can occur. There are three avenues by which a hospital can secure a hospitalist: employment, contract with a hospitalist group practice, or contract with a hospitalist management firm.

A benefit of contracting with hospitalist groups or management firms is that it allows finance leaders to forego costly start-up processes for a program, as well as having to design a compensation plan and structuring a billing process. Moreover, in 2009 the Medical Group Management Association released a survey noting that a nonemployed hospitalist sees an average of 19% more patients than his or her employed counterpart.

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