More cardiologists embrace working for hospitals

The percentage of cardiology practices owned by hospitals has tripled in five years, and nearly as many cardiologists work for hospitals as they do for themselves or other doctors, according to a survey released Sept. 10 by the American College of Cardiology.

The numbers reflect the difficulties independent groups are having staying financially viable, analysts said. “We are seeing this change because certain procedure codes have been bundled, which substantially reduced reimbursement,” said Jim Palazzo, who works with many cardiologists as the leader of the physician practice management business unit of Navigant, a global consulting firm. “Other key ones have been eliminated, and the financial pressures have mounted.”

The ACC survey of 2,520 practices, representing 21,373 cardiologists and 94,425 other physicians, found that 24% of groups were owned by hospitals in 2012, compared with 8% in 2007. The proportion with physician owners declined from 73% in 2007 to 60% in 2012. The percentage of cardiologists employed by hospitals grew from 11% to 35%, but those at physician-owned practices went down from 59% to 36%.

The survey found that 74% of physician-owned practices identified Medicare pay cuts as a significant business challenge, but this was true of only 56% of hospital-owned practices. Seventy percent of physician-owned practices said the overall payment environment was a business challenge, but only 49% of those owned by a hospital said the same.

“Whenever there is a shift like this because of a change in payment, it’s concerning to us,” ACC President William Zoghbi, MD, said. “We would like individual patients and physicians to have several options.”

The findings reflect patterns noted by other organizations, which have said physicians are increasingly seeking employment in hospitals because they believe it’s a more financially and personally stable situation than staying in small practices. The number of physicians and dentists with full-time jobs at community hospitals grew from 62,152 in 1998 to 91,282 in 2010, according to the American Hospital Assn.

American Academy of Family Physicians data indicate that 43% of its members were employed by a hospital or health system in 2010. Numbers for prior years are not available.

Although physicians have been seeking out hospitals for greater stability, hospitals have been acquiring medical practices and hiring doctors as ways to have outpatient services replace revenue from declining inpatient need, prepare for health system reform and control referral patterns. August reports from Fitch Ratings and Moody’s Investors Service noted that nonprofit hospital finances had stabilized because of increasing physician employment.

The ACC survey results were issued in conjunction with the organization’s annual legislative conference in Washington and were used to advocate for several agenda items, including scrapping the sustainable growth rate formula used to set Medicare rates. The American Medical Association and many other organizations have long called for getting rid of the SGR. Unless Congress intervenes, the formula would lead to a 27% cut in Medicare rates on Jan. 1, 2013.

“Congress must eliminate the red tape so that physicians can focus on patients and not paperwork,” Dr. Zoghbi said. “We are asking members of Congress to finally repeal the flawed SGR formula, oppose unnecessary cuts to medical imaging services, and work with the health care community to test and implement new payment models outside of the current fee-for-service system. We are doing our part to ensure access to high-quality, cost-effective and patient-centered care. Now it’s time for Congress to do the same.”