Canada needs a sustainable strategy to fund hospitalists

If you or one of your family members come down with an illness (such as pneumonia) and require hospitalization, you are likely to encounter two issues. First, you will more likely than not be looked after by a “hospitalist”, and second you will likely notice a need for more efficiency as a result of significant congestion in your hospital and a real pressure to discharge patients to open beds for countless more. These two realities are closely related, and have the potential to significantly impact your experience while in hospital.

Hospitalists are physicians who primarily work in the hospital setting, looking after complex patients who require general medical care (in other words they do not need surgery or other sub-specialty level care such as cardiac monitoring). Hospitalists come from all walks of medicine, but predominantly have training backgrounds in family practice or internal medicine. In an increasing number of hospitals across Canada, hospitalists have largely replaced community-based family physicians as the Most Responsible Physicians (MRPs). In Canada, hospitalists have to work in organizations that by all accounts are constantly bursting at the seams, with the fourth highest bed occupancy rate amongst all the OECD countries and one of the lowest bed-to-population ratios.

There is an urgent need to improve care processes within acute care settings in order to reduce waste, improve safety, optimize quality and enhance patient experience. Improving value (by improving quality and/or reducing costs) can only be realized if all stakeholders, particularly physicians, participate in transformational change efforts. Indeed, the cry for “physician engagement” (or lack thereof) appears to be a standing item on the agenda of many policy makers and health administrators. Along with other site-based physicians (Emergency Physicians and Critical Care doctors), hospitalists are the main targets for physician engagement activities, as their participation in process improvement initiatives is critical to the success of such efforts. Hospitalists “live” in hospitals, and what goes on within these institutions directly affects how they can perform their obligations to patients, and the quality of their work-life balance.

At the same time, hospitalists appear to bring value to the healthcare system. Increasing evidence points to better resource utilization and quality when hospitalists are available. Indeed, the Drummond Report in Ontario acknowledged the contribution of hospitalists to cost savings and recommended that more hospitals adopt such programs. Hospitalists have been shown to improve staff satisfaction by improving collaboration between providers and enhancing team-based care, and an increasing number of hospitalists are taking a leading role in quality improvement and patient safety efforts. They are natural allies for healthcare institutions as they embark on improving patient flow, reduce costs, and improve the care experience of patients.

Yet, despite the apparent benefits of the hospitalist model, and the urgent need for physician participation in system improvement initiatives, governments (and medical associations) in almost all jurisdictions in Canada have largely ignored hospitalists when it comes to developing sustainable funding mechanisms. This is evidenced by the fact that apart from Alberta (where an Alternative Relationship Plan has been implemented) in all other provinces hospitalists rely on their “host” organizations for all or part of their program funding. While the details vary, these organizations (individual hospitals or health authorities) essentially provide “top-ups” to hospitalists to supplement the income they generate through fee-for-service billings. In my experience, given that the hospitalist programs in most hospitals are large, the amount of the financial salary support that must be provided by institutions to bridge the fee-for-service shortfall can reach millions of Dollars annually.

In most provinces, the fee-for-service schedule significantly undervalues hospital-based work for general medicine patients. This is compounded by the fact that hospitalists spend the majority of their time on non-clinical, indirect patient care, performing tasks for which there are simply no fee codes in the provincial schedules (for example care coordination with primary care physicians, liaising with specialists and receiving telephone advice). In some cases, hospitalists are not eligible for accessing some fee codes (for example in British Columbia hospitalists are not allowed to use enhanced inpatient fee codes developed for family physicians, despite the fact that the majority are credentialed as family physicians or general practitioners).

The result of the current formula is a situation where hospitalists and hospital medicine programs are simply a “cost” item on the organization’s balance sheets. Instead of seeing them as their allies in improving hospital efficiencies, in some organizations managers see hospitalists as a drain on their global budgets that siphon off precious dollars away from services and capital redevelopment. And as local contracts come to an end, more often than not negotiations between hospitalists and their host organizations result in a negative environment that leads to further physician disengagement and animosity between providers and managers.

The constant battle between hospitalists and their organizations for adequate funding is one that needs to end! It is distracting all those involved from the issues that really matter: delivering high quality and safe care to patients and their families, ensuring the overall system’s sustainability by limiting costs and improving efficiencies, and allowing physicians and managers to collaborate effectively and foster innovations.

The current negotiations for a Physician Master Agreement in British Columbia and Ontario offer a real opportunity for the development of Alternative Funding Plans that take into account the complexity of care delivered by hospitalists and the value they bring to the healthcare system, and where accountability measures and innovative formulas (such as well-thought and smart pay for performance schemes, as well as dedicated funding for participation in system improvement initiatives) can provide incentives to help improve the quality of care while ensuring cost efficiencies.

Hospitalists are here to stay. It is only after we have a sustainable funding mechanism that we can once and for all move past the question of “do we need hospitalists?” and start talking about “how best can we engage our hospitalists to improve our healthcare system?”

The comments section is closed.

  • Ihor Mota says:

    Great article, Vandad, thank you.
    Unfortunately, your last statement “hospitalists here to stay” did not work fo us.
    FHA recently announced to “collapse hospitalist program at Langley Memorial Hospital”. It IS funding matter, and they are looking for cheaper alternatives, I guess. We are not sure who will be looking after our patients afterall, but this may be a sign of shrinking but not expanding the hospitalist’ program in BC.


    Dr Ihor R Mota
    Hospitalist, LMH, Langley, BC

  • Oveis Adl Golchin says:

    Very impressive, Vandad.

    Keep up the good work!

    If there is anything we can do to support, don’t hesitate.

    Keep in touch,

    Oveis Adl Golchin, MD, CCFP
    Hospitalist lead
    St Anthony General Hospital

  • Dr Jessica Otte says:

    Well said, Vandad.

    Like many physicians I’m a little leery of the pay-for-performance model, having seen this negatively impact the care of patients in the ER. However, I agree that a new funding model is needed. I like the idea of hospitalists being leads on QI initiatives, devoting time to improving the system of care rather than to constantly battling for funding.

    • Vandad Yousefi says:

      Thanks Jessica. I appreciate your insightful comments.

      I agree that the jury is still out there about P4P. But I also think that like most other things in healthcare, we don’s spend enough time really thinking about how we develop P4P schemes and anticipate the unintended consequences, and I wonder if the lack of evidence for their effectiveness is perhaps because we do not design them properly. I also agree that a big part of what hospitalists do is help patients/caregivers and even other healthcare staff navigate the system, and other aspects of system improvement (like QI and patient safety). And this “value add” aspect needs to be taken into account in the payment models. Finally, I have done some work on understanding the differences between various types of HM programs (basically developing a typology that we have subsequently validated) and it is clear that a “one size fits all” model of payment will simply not work for hospitalists. I think ultimately this will be the achilles heel of any alternative payment model that may emerge from negotiations in Ontario and possibly BC.


Vandad Yousefi


Vandad Yousefi is a hospitalist at Vancouver General Hospital and the co-founder and CEO of Hospitalist Consulting Solutions.

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