Study Finds that Use of Hospitalists Shifts Costs from Inpatient Care to Post-Discharge Setting

Hospitalists are defined as physicians who are based full-time in acute care hospitals and who provide care to hospitalized patients.  The past decade has witnessed a rapid growth in hospitals’ use of hospitalists, who have been shown to lead to reduced lengths of inpatient hospital stays.  A new study, however, finds that decreased inpatient costs associated with the use of hospitalists to provide care to patients are offset by higher costs in the 30 days following the patient’s discharge.

The Cost of Hospitalists

The researchers calculate that the increased post-discharge cost of $332 per patient “represents more than $1.1 billion in additional Medicare costs annually.”  Moreover, since post-discharge non-Medicare spending (including other payers’ payments and patients’ out-of-pocket costs and copayments) was not considered in the study, the researchers suggest that the cost shift they estimate was actually conservative.[1]

The Study

The study looked at “hospital admissions with a medical diagnosis-related group (DRG) from January 2001 to November 2006 in a 5% representative national sample of Medicare beneficiaries” with traditional Medicare coverage.  It compared patients who were treated by their primary care physicians while they were hospitalized with patients who were treated by hospitalists during their hospitalization.  The final study cohort included a large sample of 58,125 admissions at 454 hospitals, each of which had at least 20 patients cared for by hospitalists and at least 20 patients cared for by primary care physicians during the nearly six-year study period.

The study found that “patients cared for by hospitalists were slightly younger, were more likely to be white, had slightly more comorbid conditions, and were more likely to be admitted on the weekends and from nursing homes.”  The 454 hospitals in the study “were larger, were more likely to be teaching and nonprofit hospitals, and were located in larger metropolitan areas.”

The adjusted length of stay for patients treated in the hospital by hospitalists was 0.64 days shorter than the lengths of stay for patients treated in the hospital by their primary care physician.  But while hospital charges for patients treated by hospitalists were $282 lower than for those treated by primary care physicians, the total Medicare spending in the 30 days following their discharge was $332 higher.

In the 30 days following their discharge from the hospital, patients treated by hospitalists were:

  • Less likely to be discharged home;
  • More likely to have emergency department visits; and
  • More likely to be readmitted to the hospital

In contrast, patients treated by their primary care physicians had:

  • More visits to their primary care physician;
  • Fewer visits to other outpatient providers;
  • Fewer provider visits to emergency departments and nursing facilities.

In the unadjusted analysis, 5.5% more patients were discharged to home when they were cared for by their primary care physicians while hospitalized.  The “adjusted difference translates to a reduction of 120,000 patients discharged to home per year” when treated by hospitalists.

The same researchers found “a higher rate of readmissions after hospitalist care in patients with stroke.”  The researchers also cite “a recent prospective analysis of hospitalist care for patients with upper gastrointestinal hemorrhage at six academic hospitals,” which “also found higher readmission rates in the patients assigned to hospitalists.”

Questions and Concerns

A significant consequence of the United States’ fragmented health care system is that health care providers are able to shift costs from themselves to other providers.  This study suggests that hospitals’ use of hospitalists may be another example of cost-shifting.

The Affordable Care Act, the health care reform law, improves coordination of care for patients and includes provisions to reduce cost-shifting through such mechanisms as Accountable Care Organizations and the post-acute bundling demonstrations.

The Center for Medicare Advocacy is interested in hearing beneficiaries’ and advocates’ experiences with hospitalists.  Do hospitalists provide care to certain groups of patients, such as Medicaid patients or nursing home residents?  Are they more or less likely to admit their patients to in-patient status in the hospital?  Are they more or less likely to consider their patients to be on observation status?  How do hospitalists assure continuity of care for patients after they leave the hospital? Are the hospitalists in your community more likely to be salaried staff of a particular hospital, independent physicians (or physician groups) under contract for services at a particular hospital, or physicians working in hospitals under some other kind of arrangement?


[1] Yong-Fang Kuo and James S. Goodwin, “Association of Hospitalist Care With Medical Utilization After Discharge: Evidence of Cost Shift From a Cohort Study,” Ann Intern Med. 2011; 155:152-159.