Over the past decade, we’ve all become weary of economic recovery. Unfulfilled government promises, dismal financial forecasts and a sluggish buyer’s market have slowed the country’s fiscal revival and left business owners gasping for air.
But few have felt more pressure than medical practice owners. According to last month’s Practice Profitability Index, 49% of cardiologists have a negative outlook on their profitability in the coming year. Out of the more than 5,000 physicians interviewed, cardiovascular doctors outnumbered their peers in foreseeing a positive return by more than 3-to-1.
Apparently, cardiologists see higher hurdles in producing returns than colleagues in other specialties. The issues most cited to impede profitability in 2013 are declining reimbursements (69%), rising costs (60%) and the ACA (58%).
Today, we analyze these three factors and find out why they have such a harmful effect on cardiology in particular.
Erosion of Physician Autonomy
With the growing pervasiveness of ACO’s and other large medical groups, it’s becoming increasingly difficult for doctors to practice medicine on their own.
For independent cardiologists, competing with multi-physician conglomerates seems almost impossible because of their access to better, more advanced equipment and ability to set lower prices.
Compound this with declining reimbursements and cardiovascular drug shortages and you have a bleak outlook for practicing physicians.
Case in point: since 2007, CMS has systematically reduced all of the Medicare payments for outpatient cardiovascular imaging performed at private practices. Furthermore, numbers show that from 2007 to 2010, CMS reduced office-based myocardial perfusion imaging fees by 23% and echocardiographic fees by 31% in the state of Tennessee.
Meanwhile, CMS increased reimbursements for hospital-based outpatient myocardial perfusion imaging by 31% and echocardiographic imaging fees by 22% during the same interval.
This large disparity in payments for identical services performed at different venues has resulted in economic stress for private cardiology practices and caused many to run for the shelter of hospital employment.
In 2013, physicians will need to identify ways to improve patient returns and confront Medicare challenges to help maintain the autonomy required to make clinical decisions that are best for their patients.
Rising Costs
General operating costs are skyrocketing for cardiologists and are forcing them to cut general budgets just to stay afloat.
According to the Medical Group Management Association’s (MGMA) 2011 Cost Survey for Multispecialty Practices, a majority of medical practices were forced to reduce operating expenditures by 2.2% in 2010.
This stands in stark contrast to the 52% increase in operating costs that cardiologists have faced since 2001, which exceeded revenue gains over the same period, according to the MGMA.
Add these increases in operating costs to malpractice defensive measures and cardiologist expenses are bursting through the seams.
A 40,000-physician 2011 study published in the New England Journal of Medicine states cardiologists have the highest risk of being sued, with approximately 20% of cardiothoracic surgeons facing a malpractice claim each year.
This leaves cardiologists constantly implementing expensive preventive measures, such as hiring personal malpractice lawyers or purchasing more detailed EHR tracking features, to deal with liability issues.
In 2013, cardiologists will have to find new, less-expensive ways to streamline practice management and prevent malpractice lawsuits to maintain a healthy economic outlook.
Government Interference
In the short time since its passage, the ACA has rocked the health care industry and many specialists are running for the hills. Others are just calling it quits.
However, for the well-being of our aging population, cardiologists must stand fast.
“Cardiology is a broad field, and many of us are not sure exactly where we are going to fit as healthcare starts to reform,” said Keith C. Ferdinand, MD and Chair of the National Forum for Heart Disease and Stroke Prevention. “It is important that cardiologists embrace prevention. Controlling risk factors is probably one of the best things that we can do.”
His outlook for the ACA, though, isn’t totally negative. He suggests the influx of more than 30 million newly insured patients could actually increase cardiovascular returns for doctors.
“Physicians need to be paid. It’s a hard thing to be a doctor, and to be a specialist takes additional training,” said Dr. Ferdinand. “This idea that there is something bad about giving insurance to people who are uninsurable — patients with diabetes, heart disease, or mental disorders — insuring them has to be a good thing.”
In 2013, cardiologists will need to closely monitor developments around the implementation of Obamacare’s key provisions to understand how they will directly affect their patients and ability to practice medicine.
As expected from any piece of legislation, the good always comes with the bad. If cardiologists want to care for the influx of new customers, then they will have to spend more money now so they’re prepared for more patients later.
