Hospitals' use of hospitalists: Implications for financial performance

Background: Hospitalists, or physicians specializing in hospital-based practice, have grown significantly since they were first introduced in the United States in the mid-1990s. Prior studies on the impact of hospitalists have focused on costs and length of stay. However, there is dearth of research exploring the relationship between hospitals' use of hospitalists and organizational performance. Purpose: Using a national longitudinal sample of acute care hospitals operating in the United States between 2007 and 2014, this study explores the impact of hospitalists staffing intensity on hospitals' financial performance. Methodology: Data sources for this study included the American Hospital Association Annual Survey, the Area Health Resources File, and the Centers for Medicare & Medicaid Services' costs reports and Case Mix Index files. Data were analyzed using a panel design with facility and year fixed effects regression. Results: Results showed that hospitals that switched from not using hospitalists to using a high hospitalist staffing intensity had both increased patient revenues and higher operating costs per adjusted patient day. However, the higher operating costs from high hospitalist staffing intensity were offset by increased patient revenues, resulting in a marginally significant increase in operating profitability (p < .1). Practice Implications: These findings suggest that the rise in the use of hospitalists may be fueled by financial incentives such as increased revenues and profitability in addition to other drivers of adoption.