The Productivity Trap

By  |  September 20, 2011 | 

Are your hospitalists so busy that they’re hurting the bottom line?

It’s been a crazy summer!  Our census has nearly doubled over the past six months, but we’ve sustained that growth with no increase in personnel.

I’ve faced days with twenty patients to start the day and much more to do before.  But my perspective is decidedly different than it was a mere five years ago.  I used to see the high census as a long day ahead, but one that would ultimately benefit the hospital and hospitalist alike.  Sure, I was happy to make the extra money!

Things have changed… I’m now convinced that overburdening your hospitalists costs the hospital far more in prestige, reputation, and yes, overall receipts than it brings in.  I’m hoping that Program Directors and Financial Officers see the same writing on the wall that I see…  We LOSE money when we’re overly busy.  Do you understand?

Let’s say, for argument sake, that I bring in $100, on average, for every patient I see.  If I see 10 patients per day, I bring in $1000 per day.  Meanwhile, I bring in $2000 per day if I see twenty each day.  Let say I cost $300,000 per year to have around.  So, if I work 200 days per year, then I bring in only $200,000 at 10 patients per day while 20 patients per day makes $400,000.  Based on provider receipts, the CFO wants me to be busier so she can make some money off of me.  Right!

Wrong!  I’m sorry Ma’am, but you’ve got your eye on the wrong number.  You should be concerned about what happens to your CMI, LOS, OR cancelations, transfer rate, Meaningful Use, Value Based Purchasing, etc.  All of these areas are directly impacted by hospitalist operations at your institution.  And they dwarf the productivity gains from provider billing seen in my example above.

How much is a surgery worth to the hospital?  Is it $10,000?  Is it more?  If I can’t get to that case early enough to treat the UTI or reverse the INR, do you lose an OR case for the day?  How much of the $10,000 did you lose due to the delay?

What about your Case Mix Index?  How much is a 0.01 change in your CMI worth?  Is it $100K?  Oh that must be a small hospital.  How about $1 million or more.  Now we’re talking.  Is it worth gaining an extra $100,000 in provider billing from me while I cut back on documentation to see all of those cases if it costs you 0.01 of your CMI for the year at $1 million plus?!?  Of course not.

I’m willing to work as hard as the next guy or gal.  I like taking care of your patients, Madam Hospital CFO.  But, please, take a closer look.  We’ll all be happier with a balanced approach to patient care where I can see the right number of patients per day, do a great job, and make sure that the quality, satisfaction, and, yes, even the financials all go up together.


  1. Charles September 20, 2011 at 12:58 pm - Reply

    Agree, Nice review, but still not going to hold my breath…….maybe when the payment formula takes a radical shift as it might in the near future.

    • Troy Ahlstrom September 20, 2011 at 1:13 pm - Reply

      I’m not holding my breath either. But it makes no sense to avoid optimizing what we’re doing right NOW, just because there is uncertainty on the horizon. I’ve heard that over and over again in multiple C-Suites. It’s like the squirrel that runs to the middle of the road then darts back and forth in front of my car when he realizes he could get squished. It’s the fear and lack of direction that will kill us! There’s lots that we can optimize today as we wait for the problems of the future.

      Change is never ending, and so are the adjustments that we must make. (And, by the way, Go Blue!)

  2. rachel September 20, 2011 at 1:13 pm - Reply

    YES! Plus, and more importantly I think, when we’re too busy we make mistakes. Patient care has to come first.

  3. Mike September 20, 2011 at 11:01 pm - Reply

    Spot on Troy as usual.
    It all comes down to Malthusian economics and the marginal productivity of labor!
    Now that Patient Satisfaction, Readmission Rates and core processes = Revenue, a 20 encounter day putting out fires will not cut the mustard.
    See 12 patients per day and deliver extraordinary care to each.
    It will pay dividends.
    Heck if I’d want my mom to be the 20th encounter on that list.

    • Troy Ahlstrom September 21, 2011 at 11:41 am - Reply

      Mike and Rachel,

      I agree with both of you. Specifically, when I’m seeing your mom as the 20th patient, I’m not getting there until at least 7-9PM. I’ll still talk with her and answer questions, but there’s not much I can do to advance her care that day. How does that really help?

      I’d love to turn this on its head like Rachel. What if the C-suite actually drives what it really needs? It really needs high quality care and high patient satisfaction. Everything else falls apart without those things. They assume we provide that FOR FREE, or they wouldn’t even be talking to us at all. Then they try to drive the numbers we all hear about in meetings ad nauseum.

      I’d rather see the opposite. Assume that we’ll work on the CMI, LOS, VBP, Core Measures, etc. Make that the assumption of what we include “for free”. Then drive the quality of care and patient satisfaction with contractual/financial measures. That’s what hospitals and patients really need from us!

      The problem then is the basis for a hospitalist’s workload has huge numbers driving it, a large positive return on investment, and a hospital administrator who assumes they won’t be able to negotiate a reasonable cost because of it. I think that’s an incorrect assumption, but I don’t know how to change it. We need to move away from the power negotiation, and competition inherent in it, to a collaborative model. Some hospitals and hospitalist groups can do that, but a lot of them just… can’t… walk… away… from the old model they secretly love.

  4. David Friar September 21, 2011 at 11:06 am - Reply

    You need to be blogging on the AHA or ACHE website where the “squirrels” might stop darting back and forth long enough to do the math.

    Thanks, I hope a lot of folks will print this off and post it on their hospital CFO’s door.

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