Cardiologist Employment: What Does it Mean?

About 18 months ago, the Centers for Medicare and Medicaid Services cut cardiologists' reimbursement by approximately 40 percent, which drove many cardiologists out of private practice and into hospitals. Recently, health systems such as Denver-based Centura Health, Camden, N.J.-based Lourdes Health System and Westchester Medical Center in Valhalla, N.Y., have made services agreements with both individual cardiologists and cardiology group practices. Furthermore, an SK&A Hospital Providers on the Move report found that of the 20 fastest growing positions in hospitals and health systems from March 2010-March 2011, Director of Cardiology Services was 19th at 23.8 percent. Jay Alexander, MD, a cardiologist affiliated with the NorthShore Medical Group of Evanston, Ill.-based NorthShore University HealthSystem, gives some insight into this trend and where it might lead.

Integration

CMS' cut of about 40 percent of cardiologists' reimbursement was based on data from the American Medical Association's Physician Practice Information Survey. The American College of Cardiology alleged the survey's data was flawed, partly due to an alleged limited and unrepresentative sample. In contrast to the PPIS data, the ACC found cardiologists had a 2 percent increase in overhead in 2009. Compounding the CMS cut was bundled payments for some cardiovascular services. "We saw over a very short period of time almost 50 percent of cardiology groups in private practice integrate or merge with other cardiology groups or health systems," Dr. Alexander says.

Most of the cardiologists who aligned with hospitals are doing so under an employed and/or service line management agreement. The kind of integration chosen partly depends on the competitiveness of the local market, according to Dr. Alexander. Places that do not have a great deal of competition may allow cardiologists to clinically integrate with hospitals without financial integration. More competitive markets, on the other hand, may find alignment through employment more appropriate or necessary.

One of the benefits to cardiologists who manage service lines is the ability to improve quality and cost efficiency. This arrangement benefits hospitals as well because of the potentially improved bottom line. Service line management also offers cardiologists opportunities for leadership. "Cardiologists are more involved in the day-to-day management of service lines. They are much more involved in administrative issues of quality and documentation and electronic medical records," Dr. Alexander says.

Looking ahead

Dr. Alexander predicts a continuation of alignment and integration of cardiologists and health systems. "I think what's going to happen is [this alignment] is going to facilitate the concept of a more vertically integrated health system. I think the cottage industry of private practice is dying over time. I believe what's going to happen is we're going to see a more organized health system that includes primary care and multispecialties under a single [system] essentially held together by a system-wide electronic medical record," he says. "The key to what's going to happen is the ability to have a single medical record across practice barriers."

While cardiologists' movement toward integrating with health systems was caused by a negative event — the rapid decline of reimbursement — the end result may be positive for both parties. "The prediction would have been that cardiologists would be less happy in an integrated environment because of the loss of a certain degree of autonomy, but actually the satisfaction rating of those who have integrated is surprisingly good. It turned out to be an advantageous situation for both cardiologists and I hope for health systems," Dr. Alexander says.

Learn more about NorthShore University HealthSystem.


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