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Certain uncertainty in 2012
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In February, Congress passed a measure that included a reprieve from the disastrous 27.4% across-the-board cut in Medicare payments to physicians.
This relief from the sustainable growth rate (SGR) formula is only temporary, as cardiologists and other practicing physicians continue to face economic uncertainty, considerable trepidation and realistic fear that financial pressure on clinical cardiology practice will only worsen.
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Although Republicans and Democrats are paralyzed in partisan deadlock, they agree that the current rate of public spending on health care is unsustainable. Myriad proposals for reducing health care costs and increasing value by maintaining or improving quality have been made. None include a pay raise for cardiologists.
The current impasse will likely continue until the November elections — and probably beyond. But, health care reform will lurch forward anyway. Many provisions of the Accountable Care Act have already been implemented by the government and the private sector, and will likely survive in one form or another, even if the Supreme Court reverses some of its provisions.
Congress has overridden the automatic yearly cuts mandated by SGR almost every year since its inception, resulting in a more than $300 billion cumulative shortfall. The 2-month reprieve issued by Congress on Christmas Eve does not address the fundamental problem of runaway costs. MedPAC, the influential congressional advisory body, has suggested a long-term, permanent “fix” for SGR, which includes a 17% pay cut for specialists during the next 10 years and flat pay for the following 7 years. Primary care physicians would enjoy modest pay hikes during the next 10 years.
Reduced reimbursement for cardiologists is proposed while practice expenses and demand for services continue to rise. It is no surprise that as many as 70% of American cardiologists have now chosen hospital employment to stabilize their practices. Hospitals are also facing dramatic cuts in reimbursement in 2012, particularly for the Medicaid population and the uninsured. The mantra now being repeated across the land is that an integrated care model with electronic medical records binding disparate parts of the health care team together into a cohesive, cost-effective system is the key to delivering high-quality, appropriate care and better health for the American people while reducing costs.
Cardiologists who have fled for safety to the hospital employment or joint venture models are now dealing with a new reality — living within the confines of large, bureaucratic organizations. Lines are blurring between physician practice, hospitals, employers and health plans, with less and less independence for physicians.
Hospitals too are facing increasing financial pressures. Creating networks of PCPs to steer business to hospitals and cardiologists has shown to be an expensive model, especially in light of decreasing reimbursements and declining rates of acute MI, percutaneous coronary interventions and heart bypass surgery. On the brighter side, the cardiac patient population is rapidly aging, expanding the numbers of patients with HF and atrial fibrillation. Effective, new drugs and devices such as the percutaneous implanted aortic valve will continue to make cardiology an exciting field.
High-technology medicine is expensive. In obeying the laws of human nature, cardiologists and hospitals operating in a fee-for-service system have historically responded to reduced payment for individual units of care by providing more units of care, thwarting efforts to reduce costs by price controls alone. Payers have responded by requiring documentation and pre-authorization to ensure that the care delivered is appropriate and necessary, adding to the already burdensome administrative overhead facing practitioners and hospitals. Shifting more of the responsibility for payment for health care to individual patients can reduce insurance costs and decrease utilization of services, but also may deprive patients of needed care.
Effective management options to reduce costs in a fee-for-service system are limited and intrusive. Many believe that fundamental transformation of the payment system for health care will be required to stop runaway health care costs while preserving high-quality health care. These are complex problems. Cardiologists are right to be afraid of simple, one-size-fits-all solutions.
L. Samuel Wann, MD, is director of cardiology at Wisconsin Heart Hospital in Milwaukee. He is also Section Editor of the Practice Management and Quality Care section of the Cardiology Today Editorial Board.
Disclosure: Dr. Wann reports no relevant financial disclosures.