A revolution in cancer care that began in the 1980s is spreading to cardiac care. In the 1980s, cancer was treated almost exclusively in hospitals. Today, more than 80% of all cancer care is provided in community outpatient centers, which provide better outcomes, lower costs, and a more pleasant environment for patients and caregivers.
Heart disease is poised for a similar revolution, with the potential to have a huge positive effect on America’s healthcare system. Cardiovascular disease already accounts for 1 in 7 dollars spent on health care, and the total cost is expected to double to $1.1 trillion by 2035. Advances in cardiovascular medicine are creating a shift towards preventative care, shorter hospital stays, reduced costs and better outcomes.
The Centers for Medicare and Medicaid Services recently approved 14 new reimbursement codes for Ambulatory Ambulatory Surgical Centers, or ASCs, with more codes likely to be approved in coming years. Reimbursement rates for these new codes are on average 50% cheaper for CHWs than for hospital outpatient services. In addition to significant cost savings for payers, patients will benefit from fewer doctor visits, same-day treatments, and better outcomes. (We are both board members and Dr. Gheewala is a staff member of a company that has one CSA and has two more in development.)
Medicare paid outpatient hospital services nearly twice as much as it pays independent physicians or CHWs for the same services. Even off-campus facilities, which are hospital-owned but otherwise identical to independent physicians, have until recently enjoyed higher rates. Making payments site-neutral and moving more services to outpatient facilities would reduce Medicare spending by more than $150 billion over the next decade. This would reduce beneficiary spending on premiums and cost-sharing by more than $90 billion over that period.
Shifting patient care to ambulatory settings will require new investments in information technology and billing systems as well as in record keeping and care protocols. Hospitals say they need higher markups to offset expensive and complicated cases and to subsidize other services, but the accounting to support those claims is often opaque. Indirect subsidies are inefficient and subject to manipulation. They have led to a lack of price transparency and high cost variability. It would be better to replace these subsidies with targeted direct payments for atypical patients with more complications and unprofitable services like paediatrics. Cardiovascular physicians will have to do what oncologists have done: invest millions in new facilities, treatment protocols, and patient outcome monitoring systems.
The cost and complexity of this endeavor may encourage cardiologists to form larger groups. The resulting economies of scale would strengthen their bargaining power with payers and help them secure favorable financing for new buildings and technologies. More than 80% of the country’s cardiologists currently work for integrated health systems, and the largest independent practices have fewer than 100 physicians. Many doctors will welcome an alternative to the bureaucratic and misaligned model of hospital employees. They’ll love not being treated like assembly line workers trapped in logistical labyrinths.
Cardiovascular physicians who derive a significant portion of their income from services like imaging tests will need to be cautious. The so-called Stark Laws prohibit self-references. Physicians will need to guard against this by adopting compensation protocols and other compliance guarantees.
The main obstacle to the transformation of cardiac care is not medical but political. Despite steps taken by CMS to encourage outpatient care and site-independent payments, many states prohibit certain cardiac procedures outside of hospitals or require certificates of need for new CHWs. California, New York, Pennsylvania, New Jersey, Virginia and Massachusetts limit many procedures to hospitals, while North Carolina, Tennessee, Illinois and Washington require certificates of need.
There has been a gradual movement towards competition and freedom. Michigan and Mississippi recently moved to allow procedures in CHWs that obtain a certificate of need. State legislators need to update their laws to keep up with modern medical practices. Regulatory capture is not unique to healthcare, but it imposes financial and medical costs on patients.
Cardiac care is on the cusp of a major transformation, but hospitals must not be left behind. They can forge symbiotic partnerships with cardiovascular groups that allow them to gain referrals without the financial and management burdens of practice ownership. Heart patients will benefit the most, but only if lawmakers have the courage to defend entrenched interests.
Mr. Jindal served as Governor of Louisiana from 2008 to 2016 and US Assistant Secretary of Health and Human Services from 2001 to 2003. Dr. Gheewala is Assistant Director of Structural Cardiac Interventions at Pima Heart and Vascular in Tucson, Arizona.
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