Medical Staff

The business side of pediatric hospitalist programs

Medical Staff Briefing, September 1, 2009

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Are pediatric hospitalist programs profitable?

It depends on how you look at it. Physician reimbursement alone usually does not cover the cost of a pediatric hospitalist program, which is why the majority of hospitals subsidize them by up to 50%, according to University of Michigan researchers in the study, Assessing the Value of Pediatric Hospitalist Programs: The Perspective of Hospital Leaders, published in the May–June Academic Pediatrics. Nevertheless, hospitalists are known for reducing length of stay and readmissions, increasing throughput, and creating efficiencies.

The money they save the hospital can contribute to the profitability of the program. For example, let’s say a hospitalist program costs $1 million to operate, and the hospital subsidizes $500,000. If the hospitalist program generates $3 million in revenue, that’s a net revenue gain of $2.5 million.

“The other way to look at

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