Collaboration, Not Calculation: A Qualitative Study of How Hospital Executives Value Hospital Medicine Groups
BACKGROUND: Hospital medicine groups (HMGs) typically receive financial support from hospitals. Determining a fair amount of financial support requires negotiation between HMG and hospital leaders. As the hospital medicine care model evolves, hospital leaders may regularly challenge HMGs to demonstrate the financial value of activities that do not directly generate revenue.
OBJECTIVE: To describe current attitudes and beliefs of hospital executives regarding the value of contributions made by HMGs. DESIGN: Thematic content analysis of key informant interviews.
PARTICIPANTS: Twenty-four healthcare institutional leaders, including hospital presidents, chief medical officers, chief executive officers, and chief financial officers. Participants comprised a diverse sample from all regions in the United States, including rural, suburban, and urban locations, and academic and nonacademic institutions.
RESULTS: Executives highly valued hospitalist groups that demonstrate alignment with hospital priorities, and often used this concept to summarize the HMG’s success across several value domains. Most executives evaluated only a few key HMG metrics, but almost no executives reported calculating the HMG return on investment by summing pertinent quantitative contributions. Respondents described an evolving concept of hospitalist value and believed that HMGs generate substantial value that is difficult to measure financially.
CONCLUSIONS: Hospital executives appear to make financial support decisions based on a small number of basic financial or care quality metrics combined with a subjective assessment of the HMG’s broader alignment with hospital priorities. HMG leaders should focus on building relationships that facilitate dialog about alignment with hospital needs.
© 2019 Society of Hospital Medicine
The field of hospital medicine has expanded rapidly since its inception in the late 1990s, and currently, most hospitals in the United States employ or contract with hospital medicine groups (HMGs).1-4 This dramatic growth began in response to several factors: primary care physicians (PCPs) opting out of inpatient care, the increasing acuity and complexity of inpatient care, and cost pressures on hospitals.5,6 Recent studies associate greater use of hospitalists with increased hospital revenues and modest improvements in hospital financial performance.7 However, funding the hospitalist delivery model required hospitals to share the savings hospitalists generate through facility billing and quality incentives.
Hospitalists’ professional fee revenues alone generally do not fund their salaries. An average HMG serving adult patients requires $176,658 from the hospital to support a full-time physician.8 Determining the appropriate level of HMG support typically occurs through negotiation with hospital executives. During the last 10 years, HMG size and hospitalist compensation have risen steadily, combining to increase the hospitalist labor costs borne by hospitals.4,8 Accordingly, hospital executives in challenging economic environments may pressure HMG leaders to accept diminished support or to demonstrate a better return on the hospital’s investment.
These negotiations are influenced by the beliefs of hospital executives about the value of the hospitalist labor model. Little is known about how hospital and health system executive leadership assess the value of hospitalists. A deeper understanding of executive attitudes and beliefs could inform HMG leaders seeking integrative (“win-win”) outcomes in contract and compensation negotiations. Members of the Society of Hospital Medicine (SHM) Practice Management Committee surveyed hospital executives to guide SHM program development. We sought to analyze transcripts from these interviews to describe how executives assess HMGs and to test the hypothesis that hospital executives apply specific financial models when determining the return on investment (ROI) from subsidizing an HMG.
METHODS
Study Design, Setting, and Participants
Members of the SHM Practice Management Committee conducted interviews with a convenience sample of 24 key informants representing the following stakeholders at hospitals employing hospitalists: Chief Executive Officers (CEOs), Presidents, Vice Presidents, Chief Medical Officers (CMOs), and Chief Financial Officers (CFOs). Participants were recruited from 17 fee-for-service healthcare organizations, including rural, suburban, urban, community, and academic medical centers. The semi-structured interviews occurred in person between January and March 2018; each one lasted an average of 45 minutes and were designed to guide SHM program and product development. Twenty-eight executives were recruited by e-mail, and four did not complete the interview due to scheduling difficulty. All the participants provided informed consent. The University of Washington Institutional Review Board approved the secondary analysis of deidentified transcripts.
