Hospitalists And Hospitals’ Bottom Line: How Do Hospitals That Use Hospitalists Fare?

Abstract

Hospitalists are group of hospital-based physicians that specialize in the provision of hospital medicine. Since the mid- 1990s, hospitalists have grown unprecedentedly. Studies on hospitalists have focused for the most part on efficiency as measured by costs and length of stay (LOS). Very few investigations have attempted to explore the relationship between hospitals’ use of hospitalists and hospitals’ bottom line. The purpose of this study is to explore the association between the use of hospitalists and financial performance. The data for this study was extracted from the AHA Annual Survey, the Area Health Resource File (AHRF), and CMS’ costs reports and Case Mix Index (CMI) files. This longitudinal study (2007- 2010) consisted of a national sample of U.S. acute care hospitals. A panel design with facility and year fixed effects regression was performed to assess this relationship. We found that an increase in the use of hospitalists is associated with higher costs and revenue. Our study also showed that an increase in the use of a low proportion of hospitalists is associated with both low costs and revenues while an increase in the use of a high proportion of hospitalists is associated with both high costs and revenues. This increased/decreased costs and revenues offset one another and does not translate into increased profitability. As stakeholders in the health care industry explore strategies to reduce costs, the adoption of hospitalists is a staffing strategy which may necessitate further exploration to determine if this staffing strategy holds its potential promises.