July 01, 2010
5 min read

Health Care Reform and the Community Cardiologist: 2010 and Beyond

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The community practice of cardiology has undergone massive reorganization over the past 5 years. Much of the change predates Public Law 111-148, the Health Care Reform Act passed by Congress in early 2010. This sea change in the private practice of cardiology is related both to the increasingly unfavorable economics of independent practice and reaction to big-picture health care reform.

The trend toward hospital employment became a stampede on Jan. 1, when CMS enacted drastically reduced payments for in-office echocardiograms and nuclear stress tests, and eliminated codes for consultations. Even worse, MedPac, an influential panel advising Congress on Medicare, has recommended complete elimination of the in-office exemption for physician-owned imaging services. Payment for the technical as well as the professional component of echocardiograms and nuclear cardiology procedures performed in their offices has been a major source of revenue for independent cardiologists, who are faced with ever increasing overhead to pay for complex billing services, malpractice insurance and an electronic health record.

Samuel Wann, MD
Samuel Wann
Suzette Jaskie, MBA
Suzette Jaskie

As expenses continue to increase and revenues decline, it is little wonder than an estimated 50% to 75% of all cardiologists in the country will be hospital employees by the end of 2010, up from less than 25% just 5 years ago. According to MedAxiom, which recently surveyed 5,400 cardiologists in 300 practices, cardiologists who have become hospital employees have seen their incomes stabilize, or even increase slightly, while independent practitioners continue to experience a steady decline in income.

Economics aside, the transformation from independent practice to hospital employment can offer real advantages to both cardiologists and hospitals when both parties have developed a joint vision of care models and global care delivery paradigms, truly sharing responsibility for decision-making based both on what is best for individual patients and for the health care system as a whole. A continuing challenge in virtually all integrated practices is the fusion of a facility-centric model with a physician-centric model, sharing not just governance, but control of everyday activities.

Nearly everyone agrees that the quality of health care benefits from a team approach, with seamless exchange of electronic data, systematic monitoring of appropriate resource utilization and realistic measurement of the quality of care delivered using clinical rather than billing data. The current legislative, legal and regulatory environment favors initiatives from integrated systems of hospitals and employed physicians. It is more difficult for hospitals and non-employed physicians to collaborate in order to meet ongoing demands for increased quality and decreased costs of health care.

Cardiologists who have already become hospital employees report that it can be challenging to maintain intimate, personal relationships with long-term patients and their families in an institutional setting. Referral patterns and office operations are often disrupted. It is not easy to integrate the wide breadth of preventive, primary and specialty services that mark a truly efficient and effective health care system and retain high service standards. Cardiologists and hospital administrators alike are struggling to adapt to the changing realities of health care delivery, with emphasis on accountable care and alternative compensation models that may replace fee-for-service and payment based on the volume of services provided. Practices with a long history of working closely with administration report that it is easier to integrate and share responsibility and authority between clinicians and administration than with those who have previously had a more adversarial relationship.

Due to various local environmental and personal factors, a substantial minority of cardiologists do not anticipate hospital employment. Smaller groups and solo cardiologists are less likely to become hospital employees. California has a physician-supported law that prohibits the corporate practice of medicine, impeding the formation of direct financial relationships between physicians and hospitals.

Cardiologists in a few affluent urban communities now refuse to accept Medicare, which prohibits billing patients directly for more than the 20% co-pay of the Medicare fee schedule charges. Richard Wright, MD, and colleagues at the Pacific Heart Institute in Santa Monica, Calif., continue to accept the Medicare fee schedule, but recently instituted a modified form of “concierge” medicine. To make up for continually declining practice revenue, patients in his practice are charged a yearly fee of $500 to $7,500 for priority access to non-covered services such as coumadin clinic, screening and wellness counseling, same day office appointments, night and weekend ER availability, 24/7 telephone access and other services not covered by Medicare.

Few community cardiologists are prepared to opt out of Medicare, but many do restrict the number of new Medicare and Medicaid patients they see. It is increasingly difficult to make up for losses incurred in caring for Medicare and Medicaid patients by charging more for privately insured patients.

Perhaps of more immediate importance to cardiologists than Public Law 111-148 is the failure of Congress to permanently resolve the sustainable growth rate problem, which is now potentially a $300 billion obligation. Congress has excused physicians every year from provisions of the law, which limits increases in physician payments to no more than the yearly increase in the nation’s GDP. Hospitals and the rest of the federal budget are not subject to this restriction. A permanent erasure of this hypothetical “bill” is now a priority for Congress. Physicians could face another 20% to 30% reduction in their payments from Medicare if the sustainable growth rate is allowed to take effect.

All these factors contribute to uncertainty in the job market. Some cardiology fellows who are finishing their training in the summer of 2010, are finding previously “firm” job offers have been withdrawn by economically stressed practice groups. Longer-term demographics lead to predictions of a work force shortage, as older cardiologists retire, employed cardiologists choose to work fewer, more regular hours, and the population ages, needing more cardiac care. However, the frequency of percutaneous interventions and coronary bypass surgery continues to decline. Even the number of patients admitted to hospitals for acute MI has declined dramatically in the last 5 years. Our success in reducing CV morbidity and mortality is largely attributed to primary prevention, not complex cardiac procedures. Hospital-employed hospitalists and physician extenders may also lessen the demand for cardiologists.

Other major news affecting cardiologists is the pending appointment of Donald M. Berwick, MD, as administrator for CMS. Berwick is president of the Institute for Healthcare Improvement and an accomplished activist in reducing medical errors. A pediatrician, he was the first independent member of the board of trustees of the American Hospital Association. At his institute’s annual conference in December, Berwick issued a challenge to health care providers: “Over the next 3 years, reduce the total resource consumption of your health care system, no matter where you start, by 10%. Do that without a single instance of harm, without rationing effective care, without excluding needed services for any population you serve.”

Writing about the British health care system, Berwick has said, “At last a nation where health care is a right and carrying a semi-automatic machine gun is a privilege, and not the other way around.” We are in for an interesting ride.

Samuel Wann, MD, is a cardiologist with the Wheaton Franciscan Medical Group in Milwaukee and is the section editor of the Practice Manage and Quality Care section of the Cardiology Today Editorial Board. Suzette Jaskie, MBA, is the CEO of West Michigan Heart in Grand Rapids.