No issue has been of greater concern to the majority of cardiologists than that of U.S health care changes and reform. In February, we focused our lens on understanding the impact that the changes to the CMS Fee Schedule would have on cardiovascular care and found that the private practice model is, in fact, struggling to survive.
This decay in private practice cardiology is largely the result of a financial burden that is more easily absorbed in other practice models. When asked to rate their financial health, cardiologists working at private practices were less likely to be optimistic about it. Only 29% of private practitioners rated the financial health of their organization as good while almost half (48%) of cardiologists from non-private models reported the health of their practice as good or better.
This bleak financial outlook has forced private practices to take drastic actions to support their viability. Private practices are 2.5 times more likely to have taken some form of cost-cutting action in the past 30 days compared to other practices. The first line of defensive actions that private practices are taking are aimed at the staff level – more than half (57%) have reduced the number of staff or staff salaries to save expenses and a small portion (4%) have decided to retire or close the practice (1%). The second line of defensive maneuvers more directly affect patients include limiting services, reducing hours and availability, and limiting the number of new Medicare patients.
“The death of private practice in this area is imminent. It is impossible to provide appropriate patient services facing markedly reduced reimbursements and 60% overhead.” — Cardiologist in San Francisco, Calif.
Private practices have also been forced to re-evaluate their business model which has resulted in a growing trend toward hospital integration. Hospital integration is the solution of choice for private practices at a rate of three to one with nearly one-third (30%) of migration plans focusing on hospital systems while significantly fewer (8%) are looking to merge with another practice to help stem the financial burden. An additional 25% are in the consideration phase of hospital integration or practice merging and have not yet been moved to action.
Clearly the migration by private practices to hospital systems represents a significant change in the cardiovascular practice landscape. According to the membership records at the American College of Cardiology, the vast majority of practices are private; with approximately 59% of all domestic cardiologists – about 15,700 – working in a private practice setting which is defined as solo practitioner, cardiology group or multi-specialty group. The changing practice structure has the potential to profoundly affect both patient care and costs.