ACC: Shrinking salaries may portend the future

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NEW ORLEANS—While practice integration is a top of mind issue for cardiologists, it is not occurring in a vacuum. Cardiologists need to consider other marketplace trends as they approach negotiations with hospitals and integrated delivery sessions, according to presenters at the Managing Your Practice in a Transforming Health System: Part 1 session, held Sunday at the annual meeting of the American College of Cardiology.

Patrick J. White, of MedAxiom in South Lyon, Mich., confirmed, “Integration is on the top of everyone’s mind.” MedAxiom surveys indicate that about 80 percent of cardiology practices are integrated or are considering integration.

The surveys also reveal that that most practices have decreasing income prior to integration. In fact, financial and regulatory pressures are the top forces driving practices to integrate. Risk also has entered the equation. “Ten to 15 years ago, there was not much risk as a shareholder in private practice,” offered White. However, the macro climate, including declining reimbursement, has increased risk. It also has become more difficult for private practices to recruit new physicians.

The devil in the details

White shared the basics about integration. “Most deals are structured to be work RVU-based. Ninety percent are between $46 to $60 per work RVU, with additional incentives paid for quality.” Given the uncertain and evolving nature of payment reform, most contracts are flexible.

Those who have made the leap to an integrated arrangement continue to report high satisfaction, although the level is declining a bit. “Most groups would recommend integration to a colleague,” said White.

The ups and downs of cardiology practices

White reported on multiple trends, including:

  • Fewer stress studies overall and on a per patient basis
  • Declining cardiac catheterization ratio in patients new to the practice
  • Flat ablations and ICDs
  • Work RVU per physician FTE continues to climb a bi.

His interpretation? Physicians are learning to be more efficient.

David Gans, vice president of research for the Medical Group Management Association (MGMA) in Denver, continued with the salary analysis and presented results of the July 2010 MGMA Physician Compensation and Production Survey Report.

Overall compensation was on the rise from 1997 to 2008. He opined, “The overall decline in compensation in the last year may be a precursor of a larger trend.”

Gans also noted increasing hospital employment and shared some data about the impact of hospital ownership on compensation. The salaries of physicians in hospital-owned practices continue to increase.

Gans suggested that compensation in a hospital-owned practice is not the zero sum game that it is in private practice, where collections equal salary. However, compensation will be transformed by the Patient Protection and Affordable Care Act (PPACA), offered Gans, as providers are reorganized into medical homes. In addition, changes in Medicare payment policy will affect reimbursement directly and compensation indirectly.

The upshot, said Gans, is that cardiologists are no longer masters of their own ships.