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What does the ambulatory shift have to do with physician alignment? More than you may think.

By Megan Director

March 17, 2020

    Since I began working with cardiovascular program leaders over ten years ago, hospital employment has been a very common pathway for CV specialists, typically more so than for other specialties. There are a number of reasons for this. For one, CV treatment has historically been very inpatient and procedure-focused, meaning CV specialists spent much of their time at the hospital in the cath lab and operating room. CV also was targeted early on by health care reform efforts like the Hospital Readmissions Reduction Program and appropriate utilization scrutiny, which increased the need for non-RVU generating care management tasks.

    3 things to know about CV ambulatory changes for 2020

    That's why I'm not surprised to hear a heavy silence in the audience at this year's Cardiovascular Roundtable national meeting series when I make the following point: For the first time on a national scale, we are seeing CV physician groups leave employment.

    This by no means indicates that employment is no longer a beneficial strategy for many CV physicians and hospitals alike. But the emergence of more examples of large specialty groups leaving their hospital partners signals a new trend that can't be ignored.


    ASCs a new—and enticing—frontier for specialists

    Across 2019 and 2020, CMS approved coronary interventions—both diagnostic cath and some lower-acuity percutaneous coronary interventions (PCI)—in ASCs for the first time. While other service lines such as orthopedics and GI have seen an ambulatory shift of procedures for years, CV programs remained sheltered from ASC competition, given only a limited range of procedures could be performed there.

    I cannot overstate the potential of these changes to transform the CV service line as we know it. In the future, physician groups may be able to develop a small CV interventional program without hospital involvement, capturing profitable services from hospital-based labs that until now have been the only players in this space.

    Understandably, this is an appealing opportunity for many physicians. ASCs offer equity ownership and greater autonomy in scheduling and management. We are also increasingly seeing PE firms and ASC management companies proactively partnering with physician groups to help create these freestanding facilities. In fact, representatives of an ASC management company indicated to me in a recent conversation that while CV has not typically been a focus, they now see the service line as a significant opportunity given CMS' recent rulings.

    Hospital leaders quickly facing big decisions

    The impact of CV ASCs is highly varied across markets, due largely to state-specific certificate of need (CON) laws that impact the ability of ambulatory labs to open and perform these procedures. But I encourage programs to look to markets that are already seeing this shift—such as Florida—to prepare for what may come to their markets soon.

    For example, one program we spoke with recently found an aligned physician group in their market was seeking to develop a CV ASC joint venture with a local hospital—and if the hospital wasn't willing to do so, the group would partner with another program, bringing the CV business (and downstream services) with them.

    As PCI volumes have not been increasing in recent years, this is not likely to be an "increase the pie" scenario (assuming programs hopefully follow appropriate utilization criteria), but more of a "capture the pie" scenario as ASCs and hospitals begin to compete for market share.

    Preparing for the future

    Given the impact of ambulatory shift not just on where procedures are performed but also on how hospitals and physicians are partnering together, hospital leaders should begin reviewing these considerations now, even if ASCs aren't on their current strategic agenda. Are the physician groups you work with interested in ASCs? Would they have interest in a joint venture, and is this an area where you feel equipped to partner? Is your program willing to cede per-case revenue to maintain physician relationships and downstream business? If not, is there a risk of another hospital partnering with this group?

    These are not easy nor straightforward questions, but the earlier CV leaders begin discussing them, the more prepared they will be for further ASC expansion that may be coming down the pike.

    Cardiovascular Roundtable members, I encourage you to attend our upcoming national meeting or our virtual session on May 5-6 to hear our latest research on CV Ambulatory Strategy, where I'll unpack these major issues in more depth and share how other programs are responding.

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