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BACKGROUND: The use of pediatric hospitalists in community hospitals has increased over the past decade in response to the desire to provide high-quality pediatric care. Many hospitals are challenged to create financially independent and productive programs. OBJECTIVE: To evaluate an alternative approach to traditional community hospital pediatric care of having pediatricians work in a combined pediatric Emergency Department (PED)/inpatient unit. DESIGN/METHODS: Franklin Square Hospital Center converted its pediatric hospitalist program from a traditional inpatient with partial Emergency Department (ED) coverage program to one that covers a combined PED/inpatient unit. Outcome categories were compared between the year before opening, 2003, to the year after, 2004. Measures included total part B billing, overall patient satisfaction scores for the PED and inpatient unit from the Press Ganey patient satisfaction survey, perception of wait times and time to admission, and risk-adjusted inpatient length of stay (ALOS). RESULTS: Part B billings from the 5.5 Full Time Equivalent (FTE) pediatric hospitalists increased 82% from increased 61% from 2003 to 2004, from 1,631,583 dollars in 2003 to 2,967,715 dollars in 2004 as a result of increased volume of ED patients seen by pediatricians. The mean inpatient satisfaction score did not significantly change, 75.7 in 2003 and 79.0 in 2004 (P = 0.432), but the mean PED score significantly increased from 75.8 to 83.4 (P = 0.0001). Mean scores of the efficiency measures on the survey increased for PED patients, with the mean score for wait time to treatment increasing from 62.0 to 75.3 (P < 0.0001). Total throughput time through the ED improved significantly as well from 143 minutes to 122 minutes (P = 0.0003). Risk-adjusted length of stay performance did not change; for calendar year 2003, the mean monthly ALOS was 1.883 (95% range 1.503, 2.263), compared with a 2004 mean monthly ALOS of 1.869 (95% range 1.523, 2.216). CONCLUSIONS: Implementation of a combined PED/inpatient unit was associated with increased billing by hospitalists, increased satisfaction scores of ED patients, and decreased ED throughput times. Pediatric hospitalist programs that want to improve financial and patient outcomes in a community setting could consider adopting the combined unit approach.