Hospitalist Insights from the Baptist Hospital experience

September 1, 2004

Baptist Hospital in Pensacola, Fla., recipient of last year's Malcolm Baldrige National Quality Award, recently did an analysis to determine how much it would cost to duplicate internally the inpatient management services provided by Cogent Healthcare. It was found that the basic cost difference would be within $50,000 of what it was paying, but when Baptist looked at the long-term costs of hiring additional full-time employees and expanding its information management systems, the costs quickly grew beyond what it was willing to pay.

Baptist Hospital in Pensacola, Fla., recipient of last year's MalcolmBaldrige National Quality Award, recently did an analysis to determine howmuch it would cost to duplicate internally the inpatient management servicesprovided by Cogent Healthcare. It was found that the basic cost differencewould be within $50,000 of what it was paying, but when Baptist looked atthe long-term costs of hiring additional full-time employees and expandingits information management systems, the costs quickly grew beyond what itwas willing to pay.

Baptist decided to continue outsourcing their program because it wasmore cost-effective to have an existing management system in place ratherthan commit its resources to managing a program. It also took into considerationthe positive quality impact the hospitalists had on patient morbidity, mortality,readmissions, and payer mix improvement. With the hospitalists taking careof one-third of all admissions, Baptist noted a 4% decline in unfunded care,improved clinical documentation, and timely compliance with reducing incompletemedical records.

The annual investment of $800,000 in the Cogent program had a two-yearreturn of $2.5 million, and a 34% reduction in cost per case. The hospitalistsreduced length of stay by an average of 1.9 days compared with non-hospitalistpeers. The 30-day readmission rate was 40% less for patients treated byhospitalists, and patient and primary care satisfaction ratings were at99%.