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Employment Models for Hospital Medicine

Karen Minich-Pourshadi, for HealthLeaders Media, February 13, 2011
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Still, thus far nearly 40% of hospitalists are employed by hospitals directly or by hospital-management companies, about 20% are employed by hospitalist-only medical groups, and the remaining 40% work in multispecialty groups, academic medicine, or as sole contractors or insurance company employees, according to the New England Journal of Medicine.

“We’ve had an employed model since we started our program 10 years ago,” says Jeffrey Limbocker, CFO at the 650-staffed-bed Our Lady of the Lake Regional Medical Center in Baton Rouge, LA. “The physicians that became our hospitalists were also interested in this type of model. We haven’t revisited our model since. For hospital medicine, really the employment model generally is a simpler one.”

 The hospital, which generates more than $600 million in net revenue, was an early adopter of hospitalists.
A decade after the program began, hospitalists make up 30 of the 150 employed physicians.

“We grew our hospital medicine from six physicians to 30 because we found they touch every metric in the hospital—quality, service, length of stay, and patient satisfaction, and the patients like having the more frequent rounding. Our hospitalists have done a wonderful job of improving the outcomes, and part of our incentive program rewards those activities,” says Limbocker.

The approach at South Nassau Communities Hospitals is in line with Our Lady of the Lake. “We employ our hospital medicine physicians. I think the advantage there is that the administration has a direct relationship with these physicians—so everyone on the team is aligned with the same interests,” Ma says. 

Having this arrangement, Ma says, also has proven effective for the organization; she notes that length of stay for patients seen by hospitalists is one day shorter than those seen by their own primary care physicians. “The decreased stay reflects the quality of care these patients are receiving and our mortality rates are lower than that of the rest of the physicians and our readmission rates are lower, too.” 

Compensation trends

With hospitals predominantly opting for direct employment versus contract scenarios, compensation plans are a vital part of this program. According to industry experts, the independent private practice tends to use a fee-for-service model, while those who are hospital-employed are most inclined to receive a base salary plus incentives.

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