The reasons that a hospital or healthcare system starts OB/GYN hospitalist programs generally fall into eight categories:

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  It has experienced a series of bad outcomes, with subsequent high malpractice costs and payment amounts.

  
  
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  There is a shortage of private-practice OB/GYNs because of retirement, loss of privileges, or an increased number of patients creating demand. The small number of OB/GYN practitioners causes the institution stress because nobody wants to take calls or respond to consultation requests from family doctors and midwives.

  
  
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  There is high turnover among the nurses because a lack of timely response from the overworked staff of OB/GYNs results in the nurses performing deliveries unattended by physicians, caring for high-risk patients with no physician in the hospital, and dealing with dissatisfied patients waiting for evaluation in OB triage.

  
  
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  The administration is dissatisfied with paying for call coverage but receiving no financial return, as well as unhappy OB/GYNs forced to be on call. The money spent by hospital administration does not result in improved quality and safety.

  
  
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  The hospital or healthcare system is losing obstetrical patient volume.

  
  
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  The neonatal intensive care unit (NICU) has excess beds, but there is a lack of high-risk maternal transports with premature infants.

  
  
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  Academic programs lack high-quality experienced OB/GYNs for teaching residents, especially in Family Practice–only settings.

  
  
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  Local Maternal Fetal Medicine (MFM) physicians need support.

(Table 3-1)

The drivers for change generally include one champion who recognizes the problem or problems and realizes that an OB/GYN hospitalist program is the solution. If it is the Chief Executive Officer (CEO), he or she appoints a committee to study the problem and solution. If it is a private OB/GYN, the director of maternal-fetal health, or risk management, they convince the CEO first. The committee will then begin to formulate a plan using local resources, engage a consultant, or issue a request for proposal (RFP) to the various national staffing companies. (See Table 2-2 for a list of staffing companies and their contact information.)

The timeline from initial consideration to opening a full-time OB/GYN hospitalist program can range from 3 to 6 months to as long as 12 to 18 months, depending on the following:

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  Whether staffing is done with local doctors or out-of-state physicians are recruited

  
  
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  The geographical location and desirability of living conditions

  
  
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  The reputation of the hospital, morale of the nurses, and availability of support from anesthesia, pediatrics, neonatology, lab, and blood banking

  
  
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  The pay and benefits offered

  
  
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  The state licensing requirements and the hospital credentialing timeline

(Table 3-2)

BUDGET

Introduction

Prior to the start of the program, the pro forma (financial projection) will estimate the annual costs (including salaries, benefits, malpractice, and administrative costs), as well as the annual projected earnings (net revenues generated by billing). The difference, or gap, will represent what the hospital will have to pay to maintain the program. The program will have financial stability so long as the hospital is willing to pay the gap, which is also called the subsidy.

The cost of the program depends on several factors. First, it depends on the delivery volume at the facility and anticipated delivery and OB triage volume for the hospitalist program. The proportion of deliveries with commercial insurance vs. Medicaid vs. uninsured is a critical factor. Even among commercial insurances, there is a wide variation in OB global delivery fees, ranging from $1500 to $2700 in many areas. It is also critical to know if there is good system in place to apply for Medicaid for uninsured patients. Under the Affordable Care Act (ACA), all deliveries should be paid in at least the $850 range. Therefore, it is critical to know how efficient the system is in converting the uninsured to Medicaid coverage.

If the hospitalist group is part of an existing OB/GYN group with practice locations close to the hospital, the costs are lower, in the $1 million to $1.5 million range. This is because the total expense includes only the salaries of OB/GYN hospitalists. Covering insured patient deliveries from existing practices in addition to the unassigned patients drives the volume and revenues higher. If a perinatologist is also part of the group, there is incremental revenue from high-risk consultations and ultrasounds.

If you are starting a brand new, stand-alone program with no preexisting practices nearby, costs are higher. In general, programs cost around $2 million and generate between $800,000 and $1 million in the first year, which leaves a substantial gap. Hospitals that deliver 2000 babies or more per year can have a reasonable expectation of financial stability because the gap is low enough that the benefits of the program are worth the cost, especially if the OB triage can be converted to an OBED.

Typical hourly rates for in-house OB/GYN hospitalists are estimated to be $110 ($100–$145) per hour, while GYN backup is voluntary or paid at half that rate. MFM coverage for hospitalist programs, including their time for developing policies and procedures and participation in committees, is estimated to be upward of $200,000 annually. An MFM can bring substantial downstream revenue through neonatal ICU (NICU) occupancy. Participation in maternal transports brings additional revenue to the hospital, again through NICU volume.

Mid-level Providers

Budget estimates should take into account salary support for potential mid-level practitioners to help with triage and sonographers to perform ultrasounds. It is very important to know whether there are triage protocols in place for the discharge of low-risk patients and labor checks. ACOG guidelines on managing OB triage are a good resource for developing protocols. Triage management affects staffing, and therefore the cost of the program. Another factor to consider is whether private practitioners in the community want hospitalists to handle triage visits and bill for them. Mid-level providers will be necessary if triage volume is in excess of 30 visits in 24 hours. It is practical to start a mid-level provider Monday through Friday for 8 hours and assess the situation. This person can start the day early with postpartum discharges, and then help in triage for 5 to 6 hours daily. How to manage anatomy scans on uninsured patients dropping into triage needs consideration. It may require a sonographer to come to the hospital for 2 to 3 hours daily. This is another cost that should go into the financial pro forma.

Gynecologic Costs

Arrangements for GYN consults, both in the emergency room (ER) and inpatient, and for emergency GYN cases depend on the size of the facility, ER volume, and delivery volume. In a high-volume setting, covering these GYN services 24/7 will require an additional 4.25 full-time equivalent (FTE) OB/GYNs that are available to come to the hospital within 20 to 30 minutes. This backup system is expensive, however, because there is generally not enough gynecologic revenue. A combination of mid-level providers with OB/GYN backup may be a better fiscal arrangement. Alternatively, in an academic setting, residents can evaluate consults and participate with in-house attendings, with backup required to come in for GYN cases. Some hospitals have designated private OB/GYNs for backup, with or without compensation.

Typically, when there is an adjacent office with generalist OB/GYN doctors seeing patients, GYN consults in the daytime are handled by these private practitioners. If the volume is higher, a mid-level provider or resident can be assigned during the daytime. This is a valuable learning experience for trainees. Night shifts and weekends are less busy, and in-house hospitalists may be able to cover GYN cases, with backup call arrangements when necessary.

The most critical factor in the success of the program is coordination between the in-house hospitalist, backup attending, and office doctors and other staff. If everyone can function well together as a group, the program will run well.

Administrative Costs

It is important to include administrative costs in the budget. There should be a stipend for the OB/GYN hospitalist medical director in the range of $20,000 to $25,000 annually. Clerical help is needed to manage schedules, coordinate vacation times, and complete accounting and payroll management. This will cost about $35,000 to $40,000 per year. There will be upfront costs for credentialing, onboarding, and staff time to coordinate paperwork that will cost about $5000 per physician. There will be yearly costs for state licenses, Drug Enforcement Administration (DEA) licenses, continuing medical education (CME) meetings, recertifications, and other professional expenses, costing another $5000 per FTE. You also need to take into account that billing companies typically charge 5% to 7.5% of the revenue.