Cardiovascular medicine is currently grappling with a dual challenge: an increasing Medicare population and a shortage of cardiologists. These challenges are further exacerbated by budget challenges and decreasing physician reimbursement rates, as well as increasing workplace challenges fueled by early retirements, burnout and physician unionization.

On the Medicare front, projections indicate a 25% increase in the Medicare population over the next decade, exacerbating concerns regarding the solvency of the Medicare trust fund. An analysis by the American Medical Association (AMA) highlights that inflation-adjusted hospital payments have risen relative to the consumer price index (CPI), contributing significantly to fund depletion.^1,2

The same AMA analysis of Medicare data demonstrated that while payments to hospitals continue to increase relative to CPI, payments to clinicians have declined 22% from 2001 to 2021.^1,2 Although both the Inpatient Prospective Payment System (IPPS) and Hospital Outpatient Prospective Payment System (OPPS) have consistently received annual increases, the Physician Fee Schedule (PFS) has not followed suit.

Given this dual challenge, there is a pressing need to shift from fee-for-service care to effective value-based care models. Understanding the risks and benefits of emerging trends like private equity and physician unionization is also imperative, as the quest for effective solutions continues.

Value-Based Specialty Care

True value-based care should benefit patients by incentivizing better care without unnecessary services, clinicians through adequate payment for high-value services and payers by reducing spending. It is crucial to define high-value care, determine its actual costs and ensure adequate payment for delivering it. Additionally, there must be accountability for evidence-based care rather than solely focusing on cost savings.

Speakers at the ACC's Cardiovascular Summit earlier this year cited the ability of Medicare beneficiaries to choose to enroll in Medicare Advantage (MA) instead of the traditional Medicare Part A (inpatient) and B (outpatient) programs as an example of value-based care. MA incorporates Parts A, B, D (drug) and Medigap instead of separate plans with separate premiums, deductibles, etc. MA plans are run by commercial insurers and typically have more benefits such as dental care, enhanced drug coverage and gym memberships; however, they often employ more utilization management tactics.³

Over the past few years, there has been substantial MA growth, and enrollment is now nearly one-to-one compared to traditional Medicare.³ Additionally, the payment structure has made MA plans attractive to the insurance industry, private investors and beneficiaries.^3,4 By 2030, the Center for Medicare and Medicaid Innovation has determined that all Medicare beneficiaries should be in value-based care, with the MA program likely playing a significant role in this shift.

However, despite the intention of lowering costs, MA plans have not yet demonstrated clear improvements in the quality of care.^3,5,6 Furthermore, there is the potential that care is delivered at a higher societal cost through higher per-capita spending.⁷

This inefficiency in value creation is evident in the eagerness of insurance companies and private equity to enter the MA market due to their financial profitability, achieved through generous government payment arrangements and optimized coding for maximum reimbursement.³ The net societal value of MA, as currently funded, remains unclear.

Private Equity and Physician Unionization

Physician unionization is another major trend. As of 2023, approximately three-quarters of physicians are employees, with many indicating a loss of autonomy, increased burnout and a movement away from what was once a calling to corporatized medicine.⁸ As a result, more and more clinicians are moving toward collective bargaining and unionization. This trend is observed across community networks and large academic medical centers.

Private equity investment in health care is also gaining prominence, especially among smaller practices that are feeling the pressures of decreased reimbursement and increasing administrative burden.^9,10 Despite a delayed entry into cardiology, private equity investment is now growing in this field with expectations for profitability driven by an aging population, rising obesity and diabetes rates, and increased Medicare-approved outpatient procedures (i.e., a new revenue stream).

Both the Cardiovascular Summit and the ACC.24 Business of Cardiology Intensive dedicated time for discussions on the benefits and risks posed by private equity. On one hand, the private equity business model involves covering upfront acquisition costs by implementing more efficient operational practices.

However, potential risks associated with this approach include the short-term nature of private equity business models, which often involve extracting management fees and quick flips within a few years. Another consideration is the potential burden of debt placed on companies, leading to the prioritization of excessive cost-cutting measures. Furthermore, private equity ownership grants the investor operational control while providing insulation from liability or consequences.

The full impact of private equity investment on cardiology practices and broader macroeconomic trends, such as salary dynamics and workforce stability, remains uncertain. There is a potential for downward pressure on salaries and unclear effects on both access and outcomes for patients. Further research and analysis are needed to fully understand the effects of these investments on the field of cardiology.

Finding Solutions

When it comes to implementing effective cardiovascular management solutions, team-based care is essential. Advanced practice providers (APPs) and other medical professionals must play a pivotal role in expanding the capacity and scope of care delivery. This will require aligning their roles with appropriate scope of practice guidelines – considering cultural, governance and financial implications. Establishing minimal standards while allowing delegated autonomy, will also be critical to ensuring each individual functions at the top of their license and maximally contributes to the overall care team.

Recognizing and supporting the leadership potential of early-career professionals is also paramount to the future of the health care system. The leadership journey in health care faces unique challenges, including a generational divide and fewer opportunities for early-career individuals. It is necessary to recognize this need, create opportunities, and ensure that a diverse range of individuals have opportunities for both professional growth and leadership.

At the end of the day, it is imperative that the entire cardiovascular workforce work together to drive positive change within the profession and effectively address the challenges posed by the continuously evolving health care landscape.

References

1. Centers for Medicare and Medicaid Servies. 2022 Annual Report of The Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds. Available here.
2. Resneck J Jr. Medicare Physician Payment Reform is Long Overdue. American Medical Association. Oct. 3, 2022. Available here.
3. Jacobson G, Blumenthal D. The predominance of medicare advantage. N Engl J Med 2023;389:2291-8.
4. Thomas L, Mathews AW, Cooper L. Cigna, Humana in Talks for Blockbuster Merger. The Wall Street Journal. Nov. 29, 2023. Available here.
5. Figueroa JF, Blumenthal DM, Feyman Y, et al. Differences in management of coronary artery disease in patients with medicare advantage vs traditional fee-for-service medicare among cardiology practices. JAMA Cardiol 2019;4:265-71.
6. Figueroa JF, Wadhera RK, Frakt AB, et al. Quality of care and outcomes among medicare advantage vs fee-for-service medicare patients hospitalized with heart failure. JAMA Cardiol 2020;5:1349-57.
7. Gilfillan R, Berwick DM. Medicare Advantage, Direct Contracting, and The Medicare 'Money Machine', Part 1: The Risk-Score Game. Health Affairs. Sept. 29, 2021. Available here.
8. Rosenbaum L. On calling - from privileged professionals to cogs of capitalism? N Engl J Med 2024;390:471-5.
9. Jacobs R. Is Health-Care M&A Hurting Patients? Chicago Booth Review. Aug. 15, 2022. Available here.
10. Cerullo M, Yang KK, McDevitt RC, et al. Research: What Happens When Private Equity Firms Buy Hospitals? Harvard Business Review. March 20, 2023. Available here.

Clinical Topics: Cardiovascular Care Team, Prevention, Stress

Keywords: Cardiology Magazine, ACC Publications, Health Policy, Medicare, Cost Savings, Workforce, Risk Assessment, Burnout, Psychological