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Predictions for cardiologists in the changing health care landscape
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Three years after its rancorous birth, the Affordable Care Act, also known as Obamacare, rolled out one of its signature programs Oct. 1, the state-based health insurance exchanges. Some states will operate their own exchanges, whereas the federal government will operate exchanges in states that have decided not to operate their own. Similarly, some states have chosen to voluntarily participate in Medicaid expansion, whereas others have taken advantage of the Supreme Court ruling to opt out of the expansion.
L. Samuel Wann
Opinions aside, what this all means to the average patient and the average cardiologist remains to be seen. Reducing the number of uninsured and eliminating restrictions for those with pre-existing conditions seem to be fundamentally good ideas, but the devil is always in the details, especially in the cost to an average taxpayer.
The American health care enterprise is exceedingly complex, as is Obamacare and our economic and political system. No one believes the roll out of the biggest change in the American system of health care delivery since the inception of Medicare will be smooth or will satisfy anyone completely. But, the changes are inevitable and big.
Intrepid predictions
More patients will have insurance and will present themselves to our offices and hospitals expecting services. We will be busier than ever. More money will enter the health care system, even as payments for individual services are reduced. The cynic might conclude that cardiologists will be paid less to do more, but the optimist might conclude that providers of efficient and appropriate care will thrive, and underserved, previously uninsured patients will receive better care, particularly for chronic conditions and prevention. Elements of both arguments are probably correct.
The indirect consequences of Obama-care may be bigger than the direct consequences. Employers, long involved in providing tax-advantaged health care to their employees, may get out of the business. IBM and other large companies are setting up private insurance exchanges for their retired employees rather than providing insurance, with hopes that competition will drive prices lower, just as is the hope for federal exchanges. How employers of all sizes will deal with new insurance markets and what will happen to insurance premiums is impossible to predict. The success of the new insurance exchanges in attracting healthy, young customers to balance the costs incurred in caring for older, sicker customers paying the same premium is also unpredictable.
None of the above considerations predicts a windfall for cardiologists. Consolidation of cardiology practices and employment of cardiologists by hospitals will continue, but at a reduced pace, as many “vulnerable” practices have already been acquired by hospitals. Hospitals themselves are now in consolidation mode, many smaller and less-efficient hospitals having already been acquired by larger systems, giving these bigger systems a survival advantage via their enhanced efficiency, bargaining power with payers to increase rates, reduce costs with suppliers and control of compensation for employed physicians.
The metrics of ‘pay-for-performance’
How to pay doctors is an ongoing conundrum. Although fee-for-service is easy to understand, no one really knows what “pay-for-performance” really means at the level of individual cardiology practitioners. The metrics for compensating an entire accountable care organization (ACO) based on measures of quality, performance and value are attractive, but methods for fairly compensating individual cardiologists within such systems without resorting to an element of fee-for-service are more difficult to construct. Thus, many accountable care and group practice models may collect consolidated fees based on performance-based contracts, but still compensate individual physicians on a relative value unit (RVU) model, a derivative of fee-for-service, with modest bonuses for patient satisfaction and compliance with quality measures.
Payment models for individual cardiologists, as well as for health care systems and ACOs, will continue to evolve. Despite fiery rhetoric, very few cardiologists have opted out of Medicare, which is now often one of our more generous payers. Health care exchanges, which are intended to foster competition and lead to lower costs, are spreading in the private sector and likely to reduce hospital profit margins, as well as physician payments. Cardiac imaging, including echocardiography and nuclear cardiology, are especially vulnerable to continued payment reductions and bundling for hospital-based and office-based services. Imaging is rapidly becoming a cost center rather than a profit center. There will be increased scrutiny of the costs of expensive technology, such as ventricular assist devices, implanted defibrillators and all highly compensated interventional services.
Awareness drives change
I believe that most cardiologists are well aware of these trends. Total health care expenditures have been relatively stable for the past few years, due in part to the poor economy, residual effects of the managed care movement of the 1990s, awareness of past overuse and altruistic desire to practice evidence-based medicine, and perhaps anticipation of things to come.
Academic health centers and cardiac centers in metropolitan areas are particularly vulnerable to these changes because the economics of delivering tertiary and quaternary care will be increasingly difficult in a climate of a flat health care budget and an emphasis on primary care. Funds to support cardiology training programs are in short supply, as hospital and clinical budgets shrink. The budget sequester has been especially damaging to the CV research enterprise.
Need for adaptation
The ever-present geographic maldistribution of physicians is especially evident. Cardiology fellows finishing their training in advanced technical specialties such as interventional cardiology, structural heart disease and electrophysiology have difficulty finding jobs in urban centers, whereas a shortage persists in less populous, rural and underserved areas. The spread of expensive, high-technology cardiology services to these smaller markets may not be economically sustainable and also can lead to smaller volumes of patients seeking care at larger tertiary care centers.
As the health care landscape changes, because of or despite Obamacare, cardiologists will adapt. We will rise to the challenge of delivering better care to more people.
There are bright spots. The electronic health record will improve the efficiency and quality of care — eventually. Team-based care, expanding the roles of nonphysicians, will allow cardiologists to concentrate on strategic planning and direction of appropriate care to more patients, not just in the hospital setting but also in the rapidly expanding realm of outpatient care, home care and extended-care facilities. Control of health care costs must include efficient and effective care of chronic conditions outside the hospital and, best of all, prevention of disease. Cardiologists will lead this effort.
Disclosure: Wann reports no relevant financial disclosures.