The reduction in hospital charges associated with hospitalist care in this national study of Medicare patients is smaller than the cost savings reported in the prospective trials (3
) but is similar to that in an observational study of hospitalist care in 45 hospitals (32
). It could be argued that the randomized trials, unblinded by necessity, were conducted by early adopters of the hospitalist model, and their results might not translate nationally. Our finding of $332 more Medicare spending associated with hospitalist care in the 30 days after discharge means that all of the reduction in hospital costs shifted to costs after discharge. The cost shift might be considered modest. However, if applied to the approximate 25% of Medicare admissions cared for by hospitalists (1
), this represents more than $1.1 billion in additional Medicare costs annually (33
The prospective trials and several observational studies found no significant increase in postdischarge visits to emergency departments or readmissions associated with hospitalist care (3
). Most prior studies were from single institutions and lacked the statistical power to detect the differences we found. As the hospitalist model has rapidly disseminated nationally, the outcomes may also have changed. A recent prospective analysis of hospitalist care for patients with upper gastrointestinal hemorrhage at 6 academic hospitals also found higher readmission rates in the patients assigned to hospitalists (34
). We also found a higher rate of readmissions after hospitalist care in patients with stroke (35
In the unadjusted analysis, 5.5% more patients who were cared for by their PCPs were discharged to home compared with patients cared for by hospitalists. The differences remained significant in multivariate, propensity, and sensitivity analyses. The adjusted difference translates to a reduction of 120 000 patients discharged to home per year, suggesting that the decrease in length of stay by hospitalists may be obtained at a cost of increased discharges to other health care facilities, such as skilled-nursing facilities.
Our study has limitations. We limited the patient cohort to those who had an identified PCP, and we compared patients cared for by their PCP in the hospital with those cared for by hospitalists. Thus, our results may not be applicable to patients without an identified PCP. In addition, the study included only patients admitted with medical diagnoses. Hospitalists have a smaller effect on length of stay with surgical patients (18
), so the results may differ. Also, we did not include patients cared for by medical subspecialists who were hospitalists.
Another limitation is that we studied patients with fee-for-service Medicare coverage. The results may not be applicable to younger patients and patients in HMOs. Our study period is 2001 to 2006; results might differ in later years. However, within our study period, we did not find a significant interaction between hospitalist care and year of hospitalization. We did not directly assess costs of hospitalization or costs after discharge. We used total charges as an indicator of hospital costs during hospitalization and calculated total Medicare spending in the 30 days after discharge. Charges reflect price setting rather than resource consumption and, as a result, overestimate costs. Medicare reimbursement does not include other payers’ payments, out-of-pocket expenses, and copayments; therefore, it underestimates costs. Thus, the estimated cost shift in our study is conservative.
The hospitals in the study cohort were limited to those with at least 20 patients in each group (hospitalist and PCP) to allow for propensity adjustment at the hospital level. However, analyses without propensity adjustment for the entire cohort produced similar results ( and ).
The estimates from the unadjusted, multivariate-adjusted, and propensity score–adjusted analyses were remarkably similar, which reflects the fact that the patients cared for by hospitalists versus those cared for by their PCPs differed only slightly in key characteristics (). In observational trials, it is always possible that an unmeasured confounder is responsible for the results. The fact that the measured potential confounders differed very little in prevalence even before statistical adjustment allays that concern somewhat.
In conclusion, in this national study, patients cared for by hospitalists versus their PCPs had a shorter length of stay but were less likely to be discharged to home; were less likely to see their PCP after discharge; and had more readmissions, emergency department visits, and nursing home visits after discharge. Hospital cost savings associated with hospitalists were offset by increased medical utilization and costs after discharge. Many incentives and opportunities for cost shifting are in the present Medicare system (36
). In the current example, the cost shift is from a fixed prospective payment (DRG) to post-discharge services in a fee-for-service system, thus lowering hospital costs while increasing overall Medicare cost. Hospitalists, who typically are employed or subsidized by hospitals (2
), may be more susceptible to behaviors that promote cost shifting. Current efforts to increase bundling of payments based on episodes of care should reduce these incentives and clarify the effect of different models of hospital care on overall medical costs.