Cost-effectiveness of a hospitalist service in a public teaching hospital.
OBJECTIVE
The authors report implementing an academic hospitalist team as a cost-effective solution to the problem of an inpatient census that exceeds their public hospital's teaching service limits. Medi-Cal (California's Medicaid program) per diem reimbursement was the primary source of revenue, which rendered moot some traditional advantages of hospitalist services.


METHODS
The authors assessed cost-effectiveness by comparing average inpatient census, payment denial rate, and Medi-Cal reimbursement for internal medicine in 2008 and in 2007. They also focused on Medi-Cal patients admitted with low-risk chest pain in 2008, comparing the length-of-stay and denied-day rate data with data from 2005.


RESULTS
Overall Medi-Cal reimbursement was $2,310,000 higher in 2008 than in 2007. Overall payment denial rate fell from 29% to 27.4%, while yearly admissions increased from 8,069 to 8,643, and the average daily census increased from 97.7 to 107.1 patients. For low-risk chest pain admissions, length of stay decreased from 2.48 to 1.92 days, denial rate decreased from 43.8% to 31.8%, and average reimbursement per inpatient day increased from $787 to $955. Total salary outlay for the first year of the service was approximately $310,000.


CONCLUSIONS
By reducing payment denials and increasing the inpatient census, hospitalists were able to more than offset their compensation with a substantial increase in revenue under per diem reimbursement, which adds a new dimension to prior reports of cost-effectiveness of hospitalist services in diagnosis-based, capitated, or fee-for-service reimbursement systems. Hospitalists are a cost-effective solution to the problem of increasing inpatient workloads at public teaching hospitals.
Lundberg
Scott
S
David Geffen School of Medicine, University of California, Los Angeles, CA, USA. slundberg@dhs.lacounty.gov
Balingit
Peter
P
Wali
Soma
S
Cope
Dennis
D
D002637:Chest Pain / Q000175:diagnosis / Q000191:economics / Q000628:therapy; D003362:Cost-Benefit Analysis; D018588:Fee-for-Service Plans / Q000191:economics; D017721:Hospital Costs; D020445:Hospitalists / Q000191:economics*; D006779:Hospitals, Public / Q000191:economics*; D006784:Hospitals, Teaching / Q000191:economics*; D006801:Humans; D007297:Inpatients; D012051:Reimbursement Mechanisms / Q000191:economics; D012189:Retrospective Studies; D014481:United States