4 Common Questions About Hospitalization Charges

We get a lot of follow-up questions about our thoughts on hospitalization. Think of this Q&A as the advanced course on hospitalization charging in modern veterinary practices!

Read our full guide to charging for hospitalization here.

💁‍♀️ How do you explain hospitalization charges to clients when patients are hospitalized for a short time (eg, 4 hours)?

I like the hotel example, which makes sense to clients.

We usually explain that the majority of hotels are booked by the night. Whether you check in at 4 pm or at midnight, you still get the same charge.

Combine that with the appropriate naming convention we previously described such as “Hospitalization Level 2 (1 to 12 hours)” and this concern vanishes.

➗ What about fractionating hospitalization quantities?

We see this a lot. Patients exit the hospital at 2 pm and the q12h hospitalization charge due at 8 pm is charged at a quantity of half on the invoice.

Ouch.

Not only is that exceptionally complex, it sets doctors up for failure when estimating, discourages thorough care, and unnecessarily devalues your top-notch service.

🤦‍♂️ Why not just charge for hospitalization every one or two hours?

Why not just prorate everything as frequently as possible! This seems like a good idea on the surface and some hospitals use this method.

But it has a broad—and most likely unintended—impact on your hospital and team. Prorating can undervalue the care your team provides, set your doctors up for failure (estimating takes that much longer), and arguably lower the bar for patient care.

With this charging scheme, you unintentionally encourage clients to nickel and dime every hour you spend caring for their animal. They’re incentivized to think about that extra hour instead of what’s right for the patient.

And don’t forget about your team. Now they are unnecessarily stressed by artificial one- or two-hour constraints to get discharges ready or update clients. Intentional missed charges (aka discounts) soar under this method. “I wasn’t able to update Fluffy’s owner until 11 am because we got busy, so I comped the three hours of charges.”

The list of reasons you’ll regret this direction is never-ending.

🌃 How do you split production between shifts, when cases transfer, and for overnight doctors?

There are two schools of thought on this one: You can take the rigid approach or the collegial approach.

The rigid approach 🔃 means that you adjust the hospitalization charge to the doctor most involved in care for the case.

A patient transfers to a specialty or overnight service and the new doctor gets the current hospitalization charge. But what happens if the original doctor is the one answering the questions, just did all the work to set things up, stays late into the night anyway, or is the decision-maker behind the scenes?

Charging this way will likely undermine your culture more than anything you do. This sets the tone for working at your center. It leaves things open to interpretation, encourages rules on rules on rules, creates disputes and cultural divides between services, and is generally complex.

You may not realize it, but it’s also feeding a culture of “never off” because it incentivizes doctors to stay late, work from home, and distrust their colleagues.

The best hospitals I’ve seen where employees actually want to work take the “what goes around comes around” (ie, the collegial 🙌) approach.

Here’s how this works: If a doctor admits a case, does the work to set up the plan, and keeps the case the next day, all charges (hospitalization or otherwise) stay under that doctor.

Overnight doctor cases work the same way (they keep their cases if they are back). And the doctor who takes rounds still cares for the case while you’re not in the building. What goes around comes around.

If you admit a case and aren’t on shift tomorrow or the case is getting transferred, you simply get all charges until the new doctor takes over the next morning.

Don’t think it’s that easy? It is.

And newer graduates care about this culture more than past generations when seeking jobs. If you have doctors who care about finances so much that you know they will fight this, I’d argue that you may have found a culture problem.

Looking for a good book on culture thoughts like this and more?

Check out What You Do Is Who You Are, a great read from Ben Horowitz (cofounder of a Silicon Valley venture capital firm) on creating work culture that weathers both the good times and the bad.

With novel ideas and some thoughtful redesign, you too can modernize your current hospitalization charging and take advantage of newer automation tools. Take the leap and you’ll boost your practice’s cash flow immediately, and improve your culture and efficiency while you’re at it!

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