About Us

The History of HospitalMD

Our history is rooted in our commitment to increase revenue through market share in Community hospitals

Our history is rooted in our commitment to increase revenue through market share in Community hospitals in order to relieve their financial distress. Although we are now one of the leading providers of Emergency Medicine (EM), Hospital Medicine (HM) and rural Hybrid Medicine for Community hospitals, our origins began with our revolutionary rural Hybrid model. Our approach to integrating the business of medicine with clinical expertise was the driving force and foundation of our Hybrid model and has led to continued success with our growth into traditional standalone EM and HM services. In the late 1990s, the consensus of industry opinion was that declining reimbursement “rates” and the large number of uninsured were the fundamental causes of financial distress among rural hospitals. This made no sense to our founder. Rural hospitals are generally paid at approximately the same rates for the same services. Further, we found that among rural hospitals with service areas of similar population, demographics, and payer mixes; some made profits of $1 million, and some lost $1 million, year after year. There had to be a better explanation.

After owning and operating rural hospitals over several years, we found that these consensus beliefs were effectively myths. The causes of distress were not fundamentally reimbursement rates or the uninsured, but rather insufficient revenue due to outmigration of patient volume, especially of inpatients. We did find two fundamental causes for this outmigration that resulted in extraordinarily low market share. First, in order for a primary care physician (PCP) to admit and attend inpatients, the PCP had to round either during, before or after office hours. When the PCP rounded during office hours, he/she made less money (less efficient) than continuing to see patients in their office. Rounding before or after office hours made for long days. Most PCPs that lived and worked in rural areas valued their personal time with family and long work days were unattractive. They simply did not want a hospital practice. And traditional Hospitalist Medicine (HM) services were so costly that providing the service as an alternative for the medical staff was not financially viable. Second, traditional Emergency Medicine (EM) physicians did have plenty of time to attend inpatients because of low ED volumes. Attending inpatients required no more hours of availability than that required for providing EM services. But professional pay structures, regulations, and medical staff by-laws were hurdles to overcome. Overcoming these hurdles required a fresh and innovative look at silo patient care delivery that visually limits us seeing beyond the imposition of medical specialization and tradition.

We created a new model that solved the two causes for outmigration without the financial limitations of adding two separate services.

Our founder formed HospitalMD in 2004 to design and test solutions for rectifying the two causes of outmigration. These solutions required modifications to the traditional EM service and the addition of a HM service. These traditional practice models were much too costly. We created a new model that solved the two causes for outmigration without the financial limitations of adding two separate services. We called it a “Hybrid” model because it integrated the two traditional patient care models of EM and HM into a single practice with an entirely new structure. In this model, the physician provides both services during the same 24 hour period. Over the first six months, implementation of this model achieved a 66% increase in net revenue with a return on investment of over 400%. The hospital was profitable for the first time in 10 years. We realized then that our Hybrid model could revolutionize rural hospital’s healthcare, allowing them to not only survive, but to thrive financially. As we continued to grow over the years, we soon came to learn that the same principles that we employed to make our Hybrid model successful in rural hospitals was not unique. Many Community hospitals across the country where the stand alone practice model was feasible were desperately in need of those same principles. The same dedication and innovative approach HospitalMD started our Hybrid model with was used to design stand-alone EM and HM services to Community hospitals. Since our inception in 2004, the value to our clients of our practice models has improved significantly. In addition to maximizing revenue through capturing patient outmigration, we maximize revenue through the internal mastery of other complementary skill sets including physician recruiting and development, case management, improved medical decision making and clinical documentation, appropriate patient classification, stronger physician direction of patient care, continuity of care, and patient satisfaction. Community hospitals continue to need EM, HM and Hybrid medicine partners that can not only understand the clinical components of a successful hospital, but the financial components as well. HospitalMD integrates the business of medicine with clinical expertise, making us the preferred choice of Community hospitals!