Physicians are becoming increasingly engaged in comanagement arrangements with hospitals to bolster efficiency and quality of care in cardiology service lines.
The agreements have emerged as an alternative to joint ventures or physician employment, and are becoming more popular in the healthcare reform climate. Hospitals are under increasing pressure to boost both patient care quality measures and the bottom line. Physicians, facing reduced incomes as well as questions about their autonomy, are evaluating strategies to form alignments with hospitals.
Comanagement plans often target cardiology because it remains the most profitable of service line at a time hospitals and physicians face decreasing reimbursement from the federal government, and both are attempting to improve profitability, outcomes, and operational efficiency.
"When a hospital looks out—the fee cuts affecting doctors, the Medicare cuts—you realize, and our hospital board does and the community does: Doctors are in danger," says Sally Nelson, CEO of Huntsville (TX) Memorial Hospital, a 96-staffed-bed facility that has embarked on a comanagement plan.
"The hospital is the mother ship to shore this up and keep it going. We have a relationship with doctors and the infrastructure to get through this turmoil, and comanagement gives us a forum for hospitals and physicians to not only communicate, but do what is best for patients."
Comanagement planning has accelerated since massive cuts in cardiology initiated by the Centers for Medicare & Medicaid Services, which took effect at the beginning of 2010. Specifically, CMS enacted significant payment reductions for procedures ranging from echocardiograms to nuclear stress tests and elimination of codes for consultants.
Under comanagement arrangements, hospitals contract with groups of physicians for management services for the service line. With emphasis on quality and performance, such arrangements are wrapped around accountable care organizations and can offer improvements over traditional medical director positions. With such alignments, physicians can be rewarded for management as well as quality and efficiency. Healthcare consultants say that increasing numbers of physicians, particularly cardiologists, are becoming interested in the comanagement plans.
A key element of the planning is to provide incentive-based management programs with specific objectives,
and with quality as a goal, says William D. Knopf, MD, COO of Piedmont Heart Institute.
"Quality is a function of process as much as the skill sets of the physicians and staff," says Knopf. "It is first a recognition of a problem which two independent business units, physicians and hospitals, will not identify and likely even if they do will point fingers at each other. Once aligned, however, they begin to look at overall processes that in the end are the issue and not the individual skill sets of docs or staff."
Success Key No. 1: Overcoming resistance
The Piedmont Heart Institute was formed three years ago after competing cardiology groups, needing stability and income, worked together, says Michele M. Molden, president and CEO of the institute. The PHI has reaped $6.3 million in savings through participation between physicians and the facility in the last 12 months and plans on saving more, she says. Hospital officials declined to release overall budget totals, but described the savings as significant.