Developing a successful hospitalist program. (The Hospitalist Movement).

IN THIS ARTICLE...

In 1998, St. Vincent's Hospital in Santa Fe, New Mexico, became one of the first hospitals to develop a hospitalist program. The administration and physicians discovered critical elements that must be built to achieve success.

DURING THE EARLY days of the hospitalist movement, the chief medical officer (GMO) at St. Vincent's Hospital in Santa Fe, N.M., asked the primary care physicians on staff to see if they would be interested in this new method of inpatient care.

A survey and articles about the movement were sent out to the hospital's primary care physicians, but at the time, no physicians were interested. The few doctors who responded expressed concern that a hospitalist program would negatively impact their practices in terms of finances and patient care.

Nine months later, the GMO began to receive calls from doctors curious about starting a hospitalist program at St. Vincent's, Their interest was sparked by the potential for a hospitalist program to improve patient care and to improve the quality of life for the physicians who wanted to focus on their outpatient practices.

It is believed that the earlier education about hospitalist programs planted the seed for this interest. As a result, the GMO developed a steering committee of community physicians, emergency room doctors and key members of hospital administration.

The committee was to devise an education, communication and business plan that would get the program up and running. The committee solicited input from members of the medical staff, nursing staff, board of trustees and community members to ensure the program would meet the needs of key stakeholders.

In addition to the clinical and financial analyses, the committee designed an aggressive communication schedule including numerous public and medical staff presentations. The physicians were surveyed again and, out of 70 primary care physicians on the medical staff, 20 said they would definitely use the hospitalist program.

Planning stages

The planning phase took over a year. Key steps included:

* Identifying expected volumes of patients by payer class, diagnosis and referral source. The surveys and the hospital's decision support system were used to identify these patients for historical costs and professional revenues. Three key variables used in the cash flow analysis were:

1. Patient volume

2. Expected variable direct cost reduction

3. Program expense

A Monte Carlo simulation was applied to these three variables to allow forecasting a range of economic outcomes.

* The internal medicine staff met monthly to go over these estimates and get input on the multiple business scenarios the steering committee created. This process took many months, but allowed physicians to absorb and process the expected impact on their practices. Initial skepticism was replaced by consensus and buy-in.

* To help keep things moving, a local physician who would become the medical director of the hospitalist program organized a group of physicians who had concerns about how this would impact the practice of medicine in the community and opened discussions to convince the physicians that this program could work for the betterment of all the constituents: physicians, patients and the hospital. These discussions resulted in the formation of the Monte Sol Medical group, the organization that would provide the hospitalist physicians to care for St. Vincent's patients. The team was composed of and led by physicians who had practices in the community and who were known and respected in the community and in the hospital.

* The next step was recruiting several local physicians committed to the full-time practice of hospitalism. These physicians gave the program the experience and credibility that is essential at the initiation of a comprehensive hospitalist program.

* In addition, a board of directors was formed for the Monte Sol Medical group comprised of six community physicians from various specialties including radiology, cardiology, oncology, nephrology, the emergency room and general internal medicine.

These two events -- the development of a hospitalist team of local physicians, and the creation of the board to guide the program -- turned out to be critical decisions that contributed to the overall success of the program. The addition of a board of directors provided stability and assurance that the program would have input from the medical staff and the community.

The "make or buy" decision

Several scenarios for running the hospitalist program were developed in the business plan, including designing and implementing the program internally or using an external management program.

Many hospitals that start their own programs run into difficulties creating the infrastructure needed to build and sustain a program. The risk of failure is high--not only are significant financial resources invested, but after one mistake, the medical staff is unlikely to commit to a second attempt.

Ultimately, St. Vincent's opted to outsource the program to an external management partner, Cogent Healthcare, Inc., in order to ensure its success.

Cogent is an inpatient management company started by physicians and health care leaders who believe the hospitalist model would improve the quality of health care that patients received in the hospital and lower the cost of that care. Cogent developed and implemented programs in a number of markets in the United States.

In the process, Cogent has invested considerable resources in developing the infrastructure to support hospitalist physicians and allow them to focus on care delivery, avoid burnout and document results. Cogent brought a model that included:

* Local established physicians serving as the hospitalist physicians

* Physician training and mentoring programs

* Clinical support in the form of clinical care coordinators

* Care guidelines and audits

* Communications systems to ensure continuity of care

* Information systems to capture data to measure results

With Cogent's expertise in the field of inpatient management, the program was able to be operational much faster than if it had been done internally. Once the partnership between Monte Sol, Cogent, and St. Vincent's Hospital was finalized in May 1999, the program officially started managing inpatients September 1, 1999.

Is the program working?

The program started with 32 physicians using Monte Sol for hospitalist services. Two years later that number rose to over 60, a majority of the primary care community. Projected volume was about 1,100 inpatients annually. Currently, the total volume is greater than 3,000 patients annually.

Program results can be measured in terms of costs per case, average length of stay and readmission rates through comparisons to those averages before and after the implementation of the program. Some of the results include:

* A $300-per-case decrease in variable direct cost

* An approximately 0.4 day reduction in length of stay

* A 5.7 percent, 30-day readmission rate for hospitalist patients, as compared to a 6.8 percent overall rate for all hospital readmissions

A patient satisfaction survey is given to all hospitalist patients. Currently, 98 percent of patients cared for by hospitalists rank the care received by the hospitalist physicians as good or very good.

Sustaining results

The components of the Cogent model are essential to sustaining continuous quality improvement in the program. These components include:

* Respected and established local physicians as the hospitalist physicians

* Specially trained critical care nurses who support the hospitalist physician, handling administrative duties such as data collection, paperwork and working with the care team and the hospital to remove barriers to efficient delivery of care

* Communication systems to ensure, for example, that the primary care physician is informed of significant developments in the patient's condition and has discharge notes within 24 hours after the patient is discharged

* Each patient is also called within 24 hours after discharge to ensure that he or she has the necessary equipment at home, the medications needed and a follow-up appointment scheduled with the primary care doctor

* Information systems that gather data to measure results to compare outcomes to other markets

* Physician training and mentoring, including a National Leadership Council of hospitalist physicians from around the United States

* Care guides for the major diagnosis for hospitalized patients and audits to analyze the treatment received by patients with these key diagnoses so that any barriers to quality and efficient care can be identified and alleviated

Innovations

In addition to the results in length of stay, patient satisfaction and quality of care, the hospitalist program has served as a catalyst for a number of innovations in the hospital.

At St. Vincent's, the A hospitalist physicians have become authorities on the workings of the hospitals. They are valuable resources for improvements in hospital care and sometimes participate on board committees for the implementation of new hospital programs. Some of these improvements are:

* Creation of a wing dedicated to hospitalist care. In 2000, due to increased patient volume, hospital administrators decided to add a 16-bed hospitalist wing to serve as the prototype for efficient and patient-friendly hospitals of the future. By localizing a group of patients on a dedicated nursing unit, physicians and nurses are able to perform their duties more efficiently. A team approach among all the staff was employed, as well as a hope for consistency in staff. Aggressive case management is also used to help ensure the best possible outcomes after discharge. Standing admission orders and an on-site pharmacy were begun in an attempt to reduce medication errors. The wing is structured to be more family friendly than a traditional medical wing. There is a lounge area, conference room and kitchenette for families.

* Assistance to an anticoagulation clinic. The Monte Sol Medical Group currently provides professional services and a medical director to an anticoagulation clinic with close to 600 outpatients registered with the service. The 1998 Archives of Internal Medicine paper concluded anticoagulation management clinics saved institutions $162,000 per 100 patients annually in hospitalizations and emergency room visits due to bleeding and thrombotic complications.

* Improvements in the emergency department. Patients are seen earlier and admission orders are written sooner than when community physicians are treating these patients. Also, hospitalists prevent numerous unnecessary admissions each month during emergency department consultations. Physicians appreciate the availability of the hospitalist physicians to see unassigned patients in the emergency department, freeing them from additional trips to the hospital.

* Involving specialists in the hospitalist program. After specialists indicated an interest in having the hospitalist physicians assist in managing their patients, the hospitalist team now manages orthopedic and neurology patients as well as neurosurgery patients. As a next step, consideration is being given to adding an intensivist to the hospitalist team to provide more efficient and higher quality care to the patients in the intensive care setting.

* Complementary and alternative medicine. The hospitalist team is actively participating in plans to bring complementary and alternative medicine services into St. Vincent's.

* End-of-life care. A dedicated end-of-life care program and wing are under development. Proper end-of-life care helps the hospital run more efficiently, provides better, more appropriate care for patients in the end of life and has been shown to be cost effective.

Careful planning, early and continuous communication with the medical staff, the selection of locally established, well-regarded physicians as hospitalists and the involvement of the right partner to develop and manage the program are essential ingredients to a successful hospitalist program.

In addition, there are many unique considerations when the program is funded and sponsored by a hospital. With the appropriate clinical and information systems in place to support the hospitalist care team, improvements in quality and efficiency can be sustained and enhanced over time, and the hospitalist program can develop into the "innovation incubator" for the hospital for continuous improvements in patient care.

RELATED ARTICLE: 20 Key Steps to Creating a Hospitalist Program

1. Be certain that the board and administration are aware that the program will likely have an operating loss. Most programs will generate less in professional revenues than they will cost.

2. Clearly articulate that financial well-being of hospitalist programs is dependent on expense reductions. Produce literature and references to support this. Since the vast majority of articles support this contention, this is not hard to accomplish, but some skepticism will exist.

3. Survey potential referring physicians one at a time. It is imperative that financial forecasts are based on accurate volumes.

4. Physician leaders must have a sound understating of hospital cost accounting systems. Use only variable direct costs to estimate current cost per patient and then assume a 10 percent to 20 percent reduction in those costs. This is easier for the finance staff to accept.

5. Use conservative estimates of volume, cost savings and program expenses.

6. Plan to have adequate physician and case management staffing on day one. Nothing kills a program faster than rapid frustration of overworked clinicians.

7. Produce a full business plan with detailed financial analyses. Use Monte Carlo simulations or other methods to enhance the validity of the numbers. The initial numbers will be the basis for all future measurement and reporting.

8. Communicate the vision of the hospitalist program at every meeting and often in writing. Try to have all presentations made jointly by physicians and administration. This is critical as it engages the medical staff and lends credibility.

9. Commit to at least bi-annual reports to the board and medical staff that include performance in terms of:

* Quality (diagnosis-specific risk-adjusted morbidity and mortality readmission rates)

* Satisfaction (both physician and patient satisfaction surveys)

* Operational efficiency (LOS, other throughput measures)

* Financial (cost-per-case comparisons in aggregate and for top diagnosis-related groups)

10. The implementation team should be led jointly by a local physician leader and a hospital administrator.

11. If possible, create a physician group to represent the physician community.

12. At St. Vincent's, we chose to outsource the start-up and management of the program. In that situation, hospital administration must work closely with the external company to ensure that local issues are addressed and to maintain some control.

13. Carefully assess facility, process flow and contracting issues.

14. Always have all referrals to hospitalists be voluntary.

15. In most situations, it is preferable to require primary care providers to refer all of their admissions to the program or none. Hybrids that allow individual case selection are extremely problematic. This requirement was very well accepted by our medical community after a few initial complaints.

16. Have the hospitalist team accept all unassigned patients. This is a real convenience for the community physicians on staff and also has a strong impact on the better management of those patients without an assigned physician, including those without insurance. As a result, their care is more efficient, they move through the health care system faster and safer, and there is better follow-up after discharge.

17. Seek to alleviate specialty call burden by having hospitalists admit or consult on as many of the specialists' emergency department admissions as possible. Ideally, the hospital will be able to determine the top specialty cases that are more costly than necessary and steer these to the hospitalists. In our institution, hip fractures is one example.

18. Have hospitalists available to emergency department doctors to consult on questionable admissions.

19. Appoint hospitalists as part of most hospital operation improvement teams.

20. Consider a designated hospitalist nursing unit. This configuration helps to develop a team atmosphere and also sets up the "laboratory" environment where the hospitalist team can innovate and try process improvement ideas.

Gary D. Frank, MD, MMM, is chief medical officer at St. Vincent's Hospital, Santa Fe, N.M. He can be reached by phone at 505/820-5216 and by e-mail at Gary. [e-mail]

David Gonzales, MD, is director of the hospitalist program at St. Vincent's Hospital, Santa Fe, N.M. He can he reached by phone at 505/989-6130 and by e-mail at [e-mail]