September 21, 2017
2 min read

Following the repeal of the Sustainable Growth Rate, the Centers for Medicare & Medicaid Services has made it clear that it intends to focus on value, rather than the current fee-for-service payment structure. In this issue of STS News, Dr. Matthew Blum describes how cardiothoracic surgeons actually may be positioned to benefit from the impending changes in health care financing.
--Frank L. Fazzalari, MD, MBA, Chair, Workforce on Practice Management

Matthew Blum, MD

STS News, Summer 2016 -- The increasing emphasis on quality over quantity is driving a number of changes in cardiothoracic surgical practice, and cardiothoracic surgeons are well-positioned to take advantage of these opportunities.

Data from the Medical Group Management Association show that 70% of cardiovascular surgeons were employed by health care organizations and hospitals in 2014, while 30% remained in physician-owned practices. Since then, there has been a continued shift toward more surgeons being employed, suggesting that the current percentage of hospital-employed surgeons is even higher.

Hospitals also are increasingly subsidizing losses to physician groups. Consequently, hospitals try to recover those losses by leveraging higher reimbursements and avoiding penalties through improved coordination of care, quality of care, and development of “high-value provider networks.”

Compensation for cardiothoracic surgeons is shifting away from pure RVU models.

High-value provider networks are created by health plans for certain providers and programs that consistently meet quality and safety metrics and are more efficient relative to their peers. By shifting away from pure volume metrics and focusing on efficiency and quality, these networks are an increasingly important tool for health plans to reduce costs and provide incentives for providers. The consequence for employed physicians is that their value to an organization increasingly depends on being able to offer integrated, high-quality service, rather than simply a high volume of patients.

Reimbursement Tied to Quality

Experts have estimated that 10% of reimbursement currently is linked to quality metrics. With that percentage expected to increase, pressure also will mount to bundle services, as has already occurred in orthopedics.

Co-management contracting is one mechanism for explicitly linking compensation to administrative duties, such as coordinating medical services and monitoring quality. Physician contracting models can include compensation for management services, care improvement services, and quality incentives. These models parallel service line models and are ones that physicians often have undertaken with minimal or no compensation. Physician compensation for such activities increasingly is being scrutinized, so contracts should clearly define management responsibilities and how time spent on them is documented.

The bottom line is that employed physicians—especially cardiothoracic surgeons—are in a good position. As more emphasis is placed on coordination and quality, physician compensation is becoming more aligned with organizational goals. As a result, compensation for cardiothoracic surgeons is shifting away from pure RVU models to the benefit of both physicians and their employers.