Heart and vascular is often a banner program for progressive health systems and serves as a key hospital growth engine. But the service line also faces the less enviable position of being a focus of spending control efforts and utilization scrutiny, given the high cost and volume of these services.

CV service line leaders can watch our webconference on the CV State of the Union for the details they need to execute and stay agile, especially amidst the rapidly evolving Covid-19 pandemic. For C-Suite and strategy leaders, here are the major takeaways you need to know about CV services in 2020 to provide the right strategic guidance for your hospital or health system.

1. The Covid-19 crisis will place significant capacity and financial pressures on CV service lines working to safely and quickly reschedule elective procedures and consults

Like all hospital services, CV programs have had to cancel weeks of elective procedures in response to the coronavirus pandemic. However, many coronary procedures that are considered ‘elective’ treat potentially life-threatening diseases that need to be managed quickly and effectively, whether by interventional or medical means. Programs will be challenged to expeditiously reschedule procedures, cardiologist consults, and screenings. This will require lab and OR efficiency to accommodate these cases, as well as new clinical protocols to ensure patient safety given the increased risk of mortality from Covid-19 in individuals with cardiovascular disease.

Emerging evidence also signals that Covid-19 may impact the heart as well as the lungs, potentially causing heart failure and cardiac arrest, which would result in additional complex cases that CV programs must be prepared to manage.

Read our blog post to learn 11 ways Covid-19 could affect the CV service line →

2. CV is increasingly becoming a commercial business

CV has traditionally been a primarily Medicare fee-for-service business given the disposition of CV disease (CVD). However, there has been an unfortunate recent trend of younger patients increasingly developing CVD. From 2011 to 2017, the rate of death from heart disease increased 4% in patients aged 45-64 for the first time in years. Pair this with the increasing adoption of Medicare Advantage: it’s estimated that half of Medicare patients will be in commercial plans within the next several years, and some markets are already reaching this point.

3. Private payers are recognizing the cost savings opportunity of steerage for CV services

A 2019 study by UnitedHealth Care found significant cost savings as well as quality improvement for patients who were seen by one of their preferred CV specialists. Importantly, they also identified CV as the specialty with the greatest opportunity for cost savings, right behind primary care. Given this trend, both incumbent and startup payers are experimenting with steerage, alternative payment models, and disease management in CV services to try to achieve this savings. They will increasingly provide tools to patients and physicians to help them make higher-value referral choices.

4. Employers are also looking to stem cost growth by partnering with high-quality centers of excellence

Steerage is not limited to health plans. The Walmart Centers of Excellence model has emerged as the pinnacle example of steerage toward preferred providers. However, rather than focus on per-procedure cost, they are emphasizing quality and appropriate utilization in building their network. While initially just focused on surgical procedures, Walmart has now moved upstream to steer to high-quality imaging centers and cardiologists, among other specialties.

5. ASCs have emerged as a new competitor for profitable procedures

While ambulatory surgery centers (ASCs) actively compete with other service lines – like orthopedics and GI – CV traditionally remained sheltered given the limited number of ASC-approved procedures. This all changed in 2020, when CMS added lower-acuity percutaneous coronary intervention (PCI) to the ASC covered list, one year after adding diagnostic cath. This move by CMS makes ASCs a real alternative to hospitals for the first time for coronary procedures, and an enticing opportunity for many physician practices. In fact, there are several examples of CV physician groups leaving employment in the past year to develop their own ASCs. While impact is currently highly variable due to state-specific legislation, no program should consider themselves invulnerable to ambulatory competition as regulations can quickly change.

We are already seeing payers steer diagnostic imaging services to lower-cost ambulatory care sites, leaving the door open to outpatient procedural steerage in the near future. It is yet to be seen the impact that Covid-19 will have on the ASC business, given they have had to cancel many elective procedures—their core business—as well. However, ASCs that can sustain through the crisis may find themselves very well positioned to capture more business later in 2020 as hospitals struggle to reschedule all postponed procedures, and patients seek non-hospital alternatives due to exposure concerns.

6. The market is increasingly saturated for acute, inpatient procedures, leading to greater competition and rationalization

CV demand continues its years-long shift away from profitable inpatient procedures toward outpatient, medical services. More hospitals are competing for a shrinking share of these acute volumes, leading to low-volume programs that are fiscally unsustainable and possibly lower-quality. As a result of this, more programs across the country are rationalizing services or closing or consolidating cardiac surgery or interventional programs.

If I were to summarize the state of CV services today, it’s that today’s purchasers are both incentivized and equipped with tools to make informed decisions on where patients receive CV care. But for the first time, they have alternatives in non-hospital CV programs that could erode the hospital business. Hospitals will need to carefully assess their market and develop an investment strategy that aligns not just with the capabilities of their program, but also the demands of purchasers, physicians, and patients in their market.