The Importance of a Hospitalist Relationship in Primary Care
By Jon Hart, MD MBA
PCP practices engaged in shared savings or at-risk contracts can have tremendous medical expenses related to hospitalizations and the downstream impact of the hospital stay – beyond the DRG payment for hospital care. There are multiple opportunities to address issues that impact medical spend during and after a hospital stay, but they are dependent on a hospitalist team dedicated to work with the PCP practice, functioning within service level agreements around communication, referral patterns, and timely follow up with the PCP.
In the world of advanced value-based care, where a practice is accountable for medical expenses either in a shared savings or full-risk model, a Primary Care practice needs to consider and manage the patient across the entire spectrum of care as best as possible. This means working to ensure a patient’s care is efficient and effective not only in the office, but at home, in the hospital, and in a post-acute facility. This article focuses on the hospital.
Thirty percent of all medical spend in the US occurs during a hospitalization (all ages, all payers). For Medicare, where about 16% of the population gets admitted annually, the cost portion of hospitalization is almost 40%. Depending on the diagnosis, the medical spend in the 30 days after discharge can add up to another 60-70% of the hospitalization cost. This considers followup visits, ED visits, readmissions, post-acute care, etc.
Hospitals typically get paid on a Diagnosis-Related Group (DRG) payment model – they get a set fee to take care of a patient based on the patient’s specific diagnosis, regardless of what is spent in treatment or the length of stay in the hospital. (There are outlier payments for long lengths of stay, but that’s a minority of patients.) However, we often forget the other cost consequences from a hospitalization beyond the DRG payment. More on that in a bit.
If a PCP is not affiliated with the hospital (or hospitals) where their patients go when hospitalization is needed, the acute care setting can look and feel like a black box. The patient (usually) goes in through the Emergency Department (ED) and then a cloak of secrecy falls until the patient emerges on the other side at discharge.
The PCP may or may not be made aware of the admission or the reason for the admission. There is likely no communication of any kind from the Hospitalist or hospital staff. The patient may be seen by specialists while in the hospital, whether they are preferred specialists or not. The PCP is blind to what’s happening or has happened because the health system is on a different electronic health record (EHR). An appointment might be made with the PCP after discharge, but in the non-affiliated model, the appointment will most likely be with a health system physician. If the hospital knows who the PCP is, they may send a discharge summary (possibly 30 days after the discharge) and it might contain information about what happened and any medication changes, assuming the hospital physicians had a correct list of medications at the time of admission and discharge.
If the PCP is employed by the health system that owns the hospital(s), it’s a little different. They likely share an EHR with the hospital and might be notified of the admission. Just as often, they’re not, though. Their preferred network is likely the same as the specialists employed by the health system. In many hospitals, appointments with employed PCPs get made at discharge. Access to the EHR allows them to see the unsigned, unreleased version of the Discharge Summary, and they all share the same medication list, amended or not during the admission.
The above employed PCP description is best-case scenario. It often does not work that way, even for them, leaving the same black box illusion during and after a hospitalization of their patients.
Despite this, there are some PCP organizations that insist they don’t need to worry about acute care and how the patient’s care is managed in that setting. Their arguments include:
The PCP-focused work needs to be done to keep the patients from needing a hospitalization in the first place by optimizing their chronic conditions and focusing on prevention.
The DRG is the DRG. That’s a set cost we can’t impact.
The acute care world belongs to the hospital / health system. It’s not our sandbox.
It’s cost prohibitive to own and operate a Hospitalist Service.
Let’s look at these individually.
PCP focus on avoiding hospitalization. I have no argument with this concept. That’s certainly the best place to start and focus efforts. The patient wins through a better well-being outside the hospital, and the medical expense is lower. However, stopping there and ignoring the hospitalization that has occurred is akin to putting all one’s effort into avoiding a car accident and then, should one occur, simply blindly handing over the aftermath to someone else for them to manage. That might work out, or you might find yourself without transportation or with medical bills unpaid. Bottomline: the work of VBC doesn’t stop at health optimization and prevention.
The DRG is the DRG. That’s true in terms of the medical expense for the hospitalization. It’s the downstream costs that can kill an accountable or at-risk organization, though.
Here are some of the medical expense / cost and revenue implications of a good PCP to Hospitalist relationship:
Admission Avoidance – Having a connected or dedicated Hospitalists in a facility (either through employment or service agreement) can allow for an effective program at avoiding some admissions. Often, an ED doc will recommend hospitalization because they are concerned about followup tests/treatments or don’t have knowledge of a practice’s ability to followup outside the hospital. We call these “soft admissions.” If a Hospitalist is properly incentivized to use the PCP practice resources to arrange for treatment and followup outside the hospital instead of putting the patient into a hospital bed, the ED doc, and more importantly, the patient can be comfortable knowing they’re going to get the appropriate care outside the hospital, thus avoiding a hospital stay (and the associated cost). The DRG, in this case, is totally avoided.
Notification of admission – Knowing of an admission and the reason for the admission allows a PCP practice to help anticipate the patient’s needs at discharge. Coordinating the followup appointments and other needed services or treatments can prevent backslides and readmissions. Let’s face it, when all the big “C” big “M” care management work is arranged by the hospital, the plan often gets lost when the patient crosses the threshold back into the community. The PCP practice needs to be the coordinator of the plan. Plus, there’s the revenue consideration of billable Transitional Care Management that can be added to the work of building a smooth transition to avoid unnecessary medical costs.
Communication – Dialogue between the PCP practice and the Hospitalist can streamline care and fill in the historical and diagnostic gaps for both the hospitalist and the PCP. An entire workup of an incidental finding while in the hospital for another reason may not need to occur during that stay. This can be coordinated and led by the PCP after discharge. Or, the PCP may have known about Mrs. Smith’s mildly elevated bilirubin for the past 15 years and knows that it needs no further workup, avoiding unnecessary duplication of tests (and costs!).
Medication Reconciliation – This is probably one of the most beneficial and underutilized tools in healthcare, second only to proper handwashing. Having the patient and all healthcare providers work from the same medication list avoids adverse effects from previously discontinued medicines, the lack of treatment with a needed medicine that wasn’t on the list, and the confusion of multiple brand name medicines that are really the same drug or drug class which don’t all need to be taken together. Not working from the same list leads to adverse reactions, exacerbations of otherwise stable conditions, and overdoses – all of which lead to ED visits and more hospitalizations (and, you got it … cost).
Referrals – A lever many PCP practices and organizations pull to rein in medical expense is to build a high-value Preferred Specialist Network and use that network for their patients. If a Hospitalist simply consults the first specialist they see in the hallway or the one tied to their health system, this referral may be at odds with the network preferred by the PCP. Getting a patient established with a specialist who doesn’t create value through efficiency and results can cost the at-risk entity big bucks in downstream costs, both in testing and poor outcomes leading to higher care cost.
Timely Followup – This is a bit of a repeat from “Notice of Admission” above, but there’s a nuanced difference. Not only does timely followup bridge the gap in care created at discharge, but it also fulfills a CMS Quality measure, especially for ACO REACH programs. If you want to earn back your 3% quality withhold from CMS, you need to meet this measure. Not doing so can cost the ACO millions.
Acute care belongs to the hospitals. Yes, in treating the patient within the hospital walls. But in the value-based world, the PCP is also accountable for all the care and cost that follows that hospitalization. That means PCPs need to stick their noses into the work being done to care for their patients. (I won’t even go down the path of PCPs managing their own patients in the hospital, because I think that ship sailed for the most part over a decade ago due to time and overhead constraints. Different topic for a different day.) Bottomline: siloed, fragmented care is not the answer, so PCP practices need to insert themselves into the after-discharge management discussions while the patient is still in the hospital.
Hospitalist Services are expensive. Darn tootin’ they are! If a PCP practice hopes to employ Hospitalists and make a tidy profit, they are either deluded or know a secret formula for success that has eluded most others. It is possible, though, for a large physician practice to employ a team of Hospitalists if they have those Hospitalists focusing on the priorities of value-based care, thereby decreasing overall costs. It may have to run at neutral or slightly negative EBIDTA, but the impact to overall savings can be tremendous.
Another option is to contract for a dedicated Hospitalist Service. With specific service level agreements in place (like communication, preferred networks, and admission avoidance programs) and maintained, the Hospitalist Service can bill for all the services rendered while the PCP organization enjoys the decreased medical costs associated with better coordinated care.
So, whether it’s through employing your own Hospitalists or contracting with a group to serve as your dedicated Hospitalists, PCP organizations that have shared savings or at-risk contracts need to open the black box of the acute care setting and work toward better care coordination to optimize outcomes and decrease overall medical expense.
