The intersection of a growing elderly population, the high rate of uninsured Americans, a weakened economy, healthcare reform and ongoing cuts to Medicare reimbursement has created a perfect storm that is testing the limits of the U.S. healthcare system and, specifically, independent physician practice models.
A new survey of 2,413 practices from 49 states and Puerto Rico revealed that over the last year more than half of all practices have taken some form of cost-cutting action as a direct result of reimbursement cuts for cardiovascular services included in the 2010 Medicare Physician Fee Schedule. (The ACC’s 2010 Practice Census was conducted from May 5 through Aug. 9, with a response rate of 31 percent.)
The first line of defensive action is occurring at the staff level, with half of cardiovascular group practices reporting a reduction in staff to save expenses. In addition, 40 percent of cardiovascular practices said they have reduced employee benefits, while 49 percent have reduced salaries for physicians and clinical staff. A small percentage (3 percent) of survey respondents have chosen to retire or close the practice all together. While some survey respondents indicated an increase in non-physician clinical support staff (10 percent), the total number of new staff fails to compensate for the more than 2,600 nurses, nurse practitioners, techs and pharmacists that practices reported needing to lay off.
The second line of defensive maneuvers more directly impacts patients. Survey participants reported limiting services (18 percent), reducing hours and availability (10 percent) and limiting the number of new Medicare patients (9 percent). Among the services eliminated: free blood pressure checks, in-office blood work, warfarin (Coumadin) management, urgent-care appointments, outpatient clinic availability and charity care. Survey respondents estimated that more than 12,000 patients will be affected by limitations on the number of new Medicare patients.
Private practices also have been forced to re-evaluate their business models and investigate options that improve the quality and efficiency of their practices, while also providing additional revenue. This has resulted in a trend toward hospital integration or practice mergers. According to the survey, nearly 40 percent of private group practices are currently integrating with hospitals or merging with other practices.
Meanwhile, 13 percent of all cardiovascular practices are considering hospital integration or a merger in the next three years to help avert the financial burden. The good news, to date, is that the majority of practices having merged with another practice or integrated into a hospital system say their practice setting is about the same (50 percent) or better (37 percent) than it was before integration or the merger.
Obviously, the changing practice structure has the potential to profoundly affect both patient care and costs. The loss of services in the private practice setting inevitably means that patients will have higher co-pays and potentially longer wait times. There also will be higher costs to Medicare as a result of more patients going to the hospital for services they used to receive in the office setting.
These challenges demand that cardiovascular professionals, as well as organizations like the ACC, develop creative and workable solutions to meet the needs of new practice models, as well as help current private practices maintain their viability. This includes assessing new payment models, outside of the current fee-for-service system; continuing with education for evolving models of cardiovascular care; developing and/or using quality tools to improve upon and/or ensure appropriate care; and helping patients take a more active role in their care.
The key to success lies with physician leadership. With the right leadership, we can design future payment models, quality tools and educational resources that benefit physicians, while promoting high-quality patient care. Working together, we have the ability to not just weather this storm, but actually have a say in shaping the landscape once it’s over.
Dr. Bove is the immediate past president of the American College of Cardiology.