Outsourcing Your Hospital & Emergency Medicine Departments. Is it Worth It or a Bigger Problem?

It seems in the last three years, hospitals that had a local private hospitalist group or emergency medicine group have outsourced to a national company. Why? There are many reasons, but the main one is “offloading the headache.” The national contract groups are perceived as having greater expertise in areas such as recruiting, managing patients through the continuum of care, better IT systems, etc. Also, hospitals may realize some cost savings by outsourcing. MGMA data indicates a 15% less subsidy for outsourced FTE hospitalist than hospital-employed.
With a busy service in a busy hospital, many times it requires more than 1 or in some instances up to 3 to 5 physicians per shift. The hospital is forced to leverage resources to keep the program adequately staffed.  As hospitalists turnover or census fluctuate upward, the hospital runs the risk of “burning out” its employed physicians by increasing their patient loads per shift or the monthly number of shifts per physician.  If the hospital happens to be located in a non-metropolitan area where there are not large numbers of physicians or residency training programs nearby, the staffing problems are worse.  It then becomes necessary to have a recruiting and staffing plan that is national in scope to meet the physician staffing needs of the program. This usually means contracting out a specified number of shifts on a monthly basis to a one or more locum tenens agencies.

So, does a national physician staffing group solve this problem?  Yes and no. Some of the original physicians from the previous group will likely stay on board for a while (at least the first 90-120 days to get a feel for the lay of the land) and the company will bring in as many additional physicians as they need to get the program staffed.  Several of the large national groups report having as many as 1,000 physicians on their rosters working in their client hospitals across the country. Many also have their own in-house locum tenens divisions and have the capability to license and credential large numbers of physicians in short order to meet the demands of their client hospital programs wherever they may be located.  During the start-up phase of transitioning to an outsourced national group, the medical staff office will experience a large influx of new physician applications. The stress on the medical staff office will be greatly increased as they find themselves pushing credentials through quickly to get shifts covered.  Physicians will be coming and going who may or may not work out but the medical staff office will still have to do all the work to get them credentialed and oriented. Over the course of the first 6-9 months, the hospital will see some of the original group members leave and one or two new permanent hires made by the company.  Sometimes the staffing never completely stabilizes-it’s the nature of the specialty. The laws of supply and demand at work.

For the most part, national physician staffing groups fulfill a role that a hospital can’t reproduce on their own due to a lack of expertise and resources. The national group should at least be able to recruit a hospitalist medical director who will provide clinical leadership to all hospitalist assigned to the program, participate in medical staff committees, manage the scheduling, and make a positive impact on recruiting a full complement of physicians. They may or may not get to where the hospital needs them to be, but the clinical outsourcing trend is real and here to stay.

By The Numbers

  • Forty-Eight(48%) of full-time hospitalists are employed by the hospital
  • Fifteen(15%) of full-time hospitalist work for a national hospitalist management company
  • Sixty(60%) of hospitals utilize hospitalists
  • More than 30,000 hospitalists practice in 3300 large hospitals and half of all community hospitals

Source: Today’s Hospitalist, MGMA & SHM