You Are Defined By Your DRG

My hospital just changed the rules. And all I have to say is, it's about friggen time. The explosion of physician owned specialty hospitals is the direct result of the skewed profit gradients built into the payment schemes of the Medicare National Bank. Procedural medicine has an inherent built in profit stream that makes it a lucrative venture. Owning the equipment allows you to collect facility fees, DRG fees and all the other fees that drive procedural medicine. The explosion of specialty hospitals is a direct result of that profit gradient. There's a reason you don't see cellulitis hospitals springing up everywhere. You can't stick a needle, catheter, camera or scalpel into cellulitis.

Let me tell you how the real world works. Procedural medicine subsidizes internal medicine and psychiatric services. Before hospitalists came along, medical patients were often (and can still be ) money losers for hospitals. Hospitalists help hospitals lose less money on medical patients. They make up the difference by collecting their procedural gravy train. When specialty hospitals opened up, they started siphoning off the gravy train. What full service hospitals were left with was the low paying, money losing services.

To make matters worse, specialty hospitals would divert no pay or low pay (general assistance/Medicaid) to the full service hospital so as not to take up a bed for their good insurance paying patients. What you have left is a process in place that not only takes all the subsidizing good paying procedural admissions and diverts them to the physician owned hospital, but you also have a full service hospital that is used as a, pardon the expression, a dumping ground for the no and low paying insurance folks.

My hospital changed rules. Finally. And I applaud them for standing up for themselves. They have created an exclusive contract to provide procedural cardiac services with one aligned group of cardiologists. They have not revoked admitting privileges to the specialty hospital docs. Physician credentialing software will prevent them from doing their procedures.  They will simply not credential them for procedures. This is a fantastic move as it has removed the back up plan for the no and low insurance patients. No longer will my hospital be bullied by the financial incentives that drive self referrals. It's all or nothing.

I see this referral pattern, not infrequently as a hospitalist. Some primary care docs still use our group intermittently. For most it's all or none. But there are some who use us for their uninsured folks. Their Medicaid folks. Their difficult patients with difficult families. At some point that needs to change. As professionals, we should not subject ourselves to the use and abuse by others. Respect says so.

With the new policy, my hospital may lose some good insurance paying procedures, but the vast majority of them were already being diverted to the physician owned hospital. At least now, our hospital won't be there to pick up the scraps. The low paying, no paying diverts. Congratulations for finally taking a stand.

Now, I wait for the games to begin. The egos. The lawsuits. The hard feelings.

It's all about money. None of this would ever happen if all illness were created equal. I have blogged about this extensively in the past. If you are a pneumonia patient, you should be pissed that the hospital values the bypass surgery patient far more economically than they do you. You are simply a financial headache for them. A loss leader. But, they want your experience to be a good one, so when you must come back for your 4 vessel bypass, you will want them as much as my hospital will then want you.

The take home message? All illness is not created equal. You, as a patient, are defined as a money loser or profit center based on your DRG. It's really quite sad, but we get exactly what the system says we should.

Welcome to hospital medicine in America.