Director, Revenue Cycle Solutions, Warbird Consulting Partners

Dissertation Title

Contracted hospitalist and non-contracted hospitalist: Impact on hospital cost and quality outcomes.

Dissertation Abstract

Background: Changes in the health care delivery and policy environment are creating increased need for attention to health care costs and efficiency. Hospitals need to develop and implement oversight processes to effectively control costs and provide quality services. It is common for hospitals to contract with physician groups to staff various departments throughout the facility. Hospitalists are the most recent addition to hospital rosters. While some hospitals hire hospitalists directly as employees, others contract with physician groups to provide hospitalist services. The purpose of this study was to compare the potential benefits for hospitals that contracted with a hospitalist group to those that did not contract with a hospitalist group, as measured by cost and quality outcomes.

Methods: The study compared contracted and non-contracted hospitalist groups during the first full year of a contract with the study hospital. Variables used for the study hospital included the following: (a) average cost per patient stay, (b) average length of stay, (c) mortality and readmission occurrences, (d) hospital acquired conditions, and (e) core measures. Patient records for individuals who were admitted under an inpatient status for heart failure as the final diagnosis at discharge were included. Adjusting for severity of illness and risk-adjusted mortality when comparing the groups on the outcomes listed above ensured that differences in cost or quality outcomes were not caused by differences in the severity of cases handled by the two groups.

Results: Consistent with the hypothesis that contracted hospitalists would realize greater cost and quality outcomes than the non-contracted group, linear regression analyses revealed that contracted hospitalists had a lower average hospital direct cost and shorter average length of stay, a quality care outcome, compared to the non-contracted comparison group. There were no other differences in the outcomes of interest.

Conclusions: This study suggests that hospitals that contract with hospitalist groups will decrease cost and length of stay for hospitalized patients. In addition, there were no significant differences in mortality, readmissions, and core measure for heart failure while controlling for severity between contracted and non-contracted hospitalist groups, suggesting that the contracted groups achieved a reduction in cost and length of stay without sacrificing other quality care indicators.