Threatened by lower reimbursements and increasing regulations, cardiologists are migrating to hospital employment in droves, in a trend that is even affecting the cardiology megagroups formed in the past decade or two.
In Indianapolis earlier this year, the Care Group, the largest cardiology practice in the nation, with 135 physicians, joined St. Vincent Health. And in Chicago now, Midwest Heart Specialists, Illinois' biggest cardiology practice, with 50 physicians, is in sale talks with Advocate Health Care and possibly other hospitals, according to Crain's Chicago Business.
Midwest instituted its first layoffs this year, a sign that even the megapractices are hurting. In addition to a decline in cardiologists' reimbursements every year since 2000, a tightening of federal regulations has made it more difficult for independent cardiology groups to joint-venture with hospitals in critical projects such as catheterization labs, according to Suzette Jaskie, CEO of 27-physicians West Michigan Heart in Grand Rapids.
Hospitals offer "economic safety"
Ms. Jaskie, a nationally recognized speaker on cardiology practice issues, who counts at least 70 cardiology practices across the country integrating with hospitals in the past few years, is now seeing her own practice swept up in the trend. Seeking "economic safety," she says, West Michigan Heart joined Spectrum Health this January. Looking to the future, she points to growing demands for physicians and hospitals to collaborate in arrangements such as value-based purchasing, readmissions, bundled payments and accountable care organizations. "It is very, very difficult for independent practices to do these things within the current legal restraints," she says, citing Stark and anti-kickback laws.
Hospitals are happy to take cardiologists in. While Medicare cut reimbursements for diagnostic services within the practice this January, these services are one of the biggest profit centers for the hospital. Non-invasive diagnostic cardiology studies are a way for the hospital can see a quick return on its investment, Patrick White, president of MedAxiom, a cardiology service and information provider, recently told Becker's Hospital Review.
MedAxiom reported 100 percent of all surveyed physician groups that integrated with hospitals would recommend integration to their colleagues. Ms. Jaskie accepts those findings, but predicts hospitals will face an increasingly challenges keeping cardiologists happy. "Economic safety is a very, very short-term reward," she says.
Hospitals need to keep cardiologists happy
"Cardiologists have to maintain some level of autonomy," says Bob Cimasi, president of Health Capital Consultants in St. Louis, which is involved in two-dozen hospital acquisitions of cardiac practices. "There should not be the perception that they're sharecroppers or hired help." Mr. Cimasi recommends instilling "a high degree of collegiality." For example, physicians need input into research efforts.
Mr. Cimasi says hospitals are focused on acquiring specialists because the procedures they do have come to dominate the hospital revenue stream. "Procedure-oriented specialists and surgeons are the hospital's real clients," he says. "They utilize the equipment and they put most of the patients to bed there."
Making sure cardiologists stay happy involves strong leadership and a contract that recognizes the various exigencies that can crop up, he says. Cardiologists joining a hospital often still have relationships with rival hospitals. "It's a good idea to allow for transition periods when the cardiologists wind down work at other hospitals," Mr. Cimasi says. In addition, contracts need to have a mechanism for dispute resolution and a good exit strategy in case the arrangement does not work, he says.
In Indianapolis earlier this year, the Care Group, the largest cardiology practice in the nation, with 135 physicians, joined St. Vincent Health. And in Chicago now, Midwest Heart Specialists, Illinois' biggest cardiology practice, with 50 physicians, is in sale talks with Advocate Health Care and possibly other hospitals, according to Crain's Chicago Business.
Midwest instituted its first layoffs this year, a sign that even the megapractices are hurting. In addition to a decline in cardiologists' reimbursements every year since 2000, a tightening of federal regulations has made it more difficult for independent cardiology groups to joint-venture with hospitals in critical projects such as catheterization labs, according to Suzette Jaskie, CEO of 27-physicians West Michigan Heart in Grand Rapids.
Hospitals offer "economic safety"
Ms. Jaskie, a nationally recognized speaker on cardiology practice issues, who counts at least 70 cardiology practices across the country integrating with hospitals in the past few years, is now seeing her own practice swept up in the trend. Seeking "economic safety," she says, West Michigan Heart joined Spectrum Health this January. Looking to the future, she points to growing demands for physicians and hospitals to collaborate in arrangements such as value-based purchasing, readmissions, bundled payments and accountable care organizations. "It is very, very difficult for independent practices to do these things within the current legal restraints," she says, citing Stark and anti-kickback laws.
Hospitals are happy to take cardiologists in. While Medicare cut reimbursements for diagnostic services within the practice this January, these services are one of the biggest profit centers for the hospital. Non-invasive diagnostic cardiology studies are a way for the hospital can see a quick return on its investment, Patrick White, president of MedAxiom, a cardiology service and information provider, recently told Becker's Hospital Review.
MedAxiom reported 100 percent of all surveyed physician groups that integrated with hospitals would recommend integration to their colleagues. Ms. Jaskie accepts those findings, but predicts hospitals will face an increasingly challenges keeping cardiologists happy. "Economic safety is a very, very short-term reward," she says.
Hospitals need to keep cardiologists happy
"Cardiologists have to maintain some level of autonomy," says Bob Cimasi, president of Health Capital Consultants in St. Louis, which is involved in two-dozen hospital acquisitions of cardiac practices. "There should not be the perception that they're sharecroppers or hired help." Mr. Cimasi recommends instilling "a high degree of collegiality." For example, physicians need input into research efforts.
Mr. Cimasi says hospitals are focused on acquiring specialists because the procedures they do have come to dominate the hospital revenue stream. "Procedure-oriented specialists and surgeons are the hospital's real clients," he says. "They utilize the equipment and they put most of the patients to bed there."
Making sure cardiologists stay happy involves strong leadership and a contract that recognizes the various exigencies that can crop up, he says. Cardiologists joining a hospital often still have relationships with rival hospitals. "It's a good idea to allow for transition periods when the cardiologists wind down work at other hospitals," Mr. Cimasi says. In addition, contracts need to have a mechanism for dispute resolution and a good exit strategy in case the arrangement does not work, he says.