Monday, November 17, 2008

Why Hospitals Like Robin Hood Economics

As specialists are threatened with declining revenue streams as our government Robin Hood compadres shift payments from specialists to primary care in the interest of "lowering costs," why aren't hospitals who have profitted handsomely from the high-tech procedures performed by specialists stepping up to stem the bloodletting?

I believe it's because the model for primary care medicine has changed dramatically over the last five to ten years. Primary care, as we know it now, isn't the all-encompassing primary care model that it once was in years gone by. No longer is it the norm for a primary care doctor to follow their patients in the hospital. Regretfully, the payments to doctors for the time spent have dwindled to the point where doctors have to stay in their offices to treat more and more patients in less and less time and resort to turning over their soon-to-be inpatients to "hospitalists" to manage them in the hospital.

They are turned over today to young, eager, relatively cheap hospitalists fresh out of their internal medicine residency. The same hospitalists who are often hired by hospitals because they order lots of tests and decrease the patient's length of stay. The same hospitalists whose salaries are typically subsidized by the hospitals. And the hospitals are eager to keep their hospitalists happy because they need even more consults and tests performed whose technical revenues exceed professional revenues by about ten to one.

Physician salaries are a relatively small piece of the health care cost pie.

So shifting payments might be a pretty good return on investment for hospitals: watch the specialists' salaries decline and shift funds to the hospitalists (your employees or employees in proxy) as you earn more for them and lots more for you.

I guess that's why they're in business and I'm in medicine and hospital leadership can gloat over a $2.25 million a year in a place with relatively low cost of living, justifying that income because "I'm a poor kid from a mill town. My father graduated from high school, and my mother didn't. And so it is a lot."




Andrew_M_Garland said...

It seems that the government looked at doctors and said "Doctors are making a lot of money and they have an ethic of helping people, sometimes at no cost. They should help even more, and we will even pay them a little."

Capital exists as savings in dollars and as plant and equipment. Capital also exists in the training and culture of a profession. The government makes a big mistake targeting the built-up knowledge and ethical capital resident in doctors. That capital can be "hollowed out", until the nature and ethic of the medical profession is forcibly changed. Your post reports some of those changes.

You aptly call this Robin Hood Economics, taking from the capital of doctors and giving it to the poor. This never works out as intended. It raises costs for everyone. The problem is that people adapt to any system, no matter how political or misguided.

See The Supply Side Robin Hood for an explanation of what really happens when one tries to take from the rich and give to the poor.

Robin said...

Hey, Dr. Wes... you know I deal with this as a patient where I live. I see my PCP who doesn't have time to do all that needs done, so I'm farmed out (I believe the word is "dumped" in medical-ese)to a specialist or specialistS. That specialist only deals with his/her area of expertise, so I'm farmed out again (dumped) to another specialist for another symptom, etc..etc...

Well, no one ties together all the symptoms. I end up in the ED or hospital and I get either a wonderful ED doctor or hospitalist who does just what you said above, and nobody has a clue what is really wrong. I have great insurance, but I still pay hundreds of dollars (or thousands, depending) with co-pays and the like. Not to mention I pay for my insurance.

What do I do? I go see someone who gives a damn on the other side of the continent. He doesn't take insurance. I pay out-of-pocket. He does give me a bill to submit to insurance which is reimbursed at a percentage. But I get great overall care. I can test at home. He and his office help coordinate all that but I'm the middle (wo)man. The problem with that? I can't afford the travel.

My point: It's bigger than shifting funds. It's bigger than paychecks and "Robin Hood" economics. It's my life. I don't mind paying what is due. I just want something from it. I hate piecemeal. I want a doctor who can put all the puzzle pieces together and then figures out what needs done.

So....what's the answer?

The Happy Hospitalist said...

Hy doc. I'm not sure how you can argue that hospitalists order more tests. That's not my experience. In fact, when you have a head of the ship instead of the poly consult seen with admission by a specialist or an outpatient doc, you get less tests, not more.

DrWes said...


Liked your post. Nice explanation of the Robin Hood mentality. I suppose this is why socialist societies not bound by religious beliefs or dictators have been uniformly unsuccessful thoughout history long term.


Nationwide healthcare records will be a disrupter to the current status quo of health care delivery. But government must insist on inter-hospital system transfer of a patient's EMR. Currently, even within Chicago, a patient transfered from one facility with EPIC to our system (that also uses EPIC) requires that the entire medical record be re-created manually. This is asinine, but because of competition between centers, it is the norm. Look for this barrier to be dissolved with upcoming healthcare reform - we simply can't afford to continuously repeat testing due to lack of information transfer.

As patients regain bargaining power by paying for more of their healthcare dollar, market forces will meet eventually your needs. Right now, I really like the fact that you have empowered yourself as the middle (wo)man rather than bowing to third-party payers. Best of luck to you.


By the very transfer of care from a primary care doctor to a doctor who knows nothing about the patient, inefficiencies of care are inevitable. While acute issues are well-managed by hospitalists, as you suggest, portions of one's past medical history are often lost during handoffs of care, resulting in repeat testing by those unfamiliar with past circumstances. Hospitalists, too, change usually weekly, resulting in further handoff communication lapses. Importantly, increased testing is not always the hospitalists' fault, as primary care doctors increasingly use the ER with their slew of tests (like mandatory CTs for minor headaches, stomach aches and the like) for urgent care visits that they cannot accommodate due lack of clinic availability.

All of these problems, as well as "auto-ordering" of tests through electronic clinical pathways, benefits the hospital who performs testing at every step of the process.