What Happens When Cardiovascular Service Lines Become Cost Centers in Value-Based Payment Systems?

Presented at the 15th Biennial International Andreas Gruentzig Society Meeting, February 3-7, 2019

Program Agenda               Faculty Disclosures              Vendor Acknowledgment

11.2  /  IAGS 2019
Session 11: Industry Session 1
What Happens When Cardiovascular Service Lines Become Cost Centers in Value-Based Payment Systems?
Program Presenter: Kirk N. Garratt, MSc, MD


Statement of the problem or issue

Acute care procedures are the financial backbone of hospital organizations and many cardiovascular practices. Further movement away from per-procedure (fee for service) payment models and toward payment for efficient, high quality care, is anticipated and expected. Some form of capitation (set payment to cover the needs of a defined population) may also evolve. Changing reimbursement models threaten to significantly reduce hospital operating margins by reducing payments for the high acuity, high cost treatments common in acute cardiovascular care. Allowing cardiovascular services to become a cost center (consuming more revenue than is generated) would cause collapse of nearly all hospital organizations. The imperative is to prepare for future reimbursement methods and maintain a positive contribution to hospital/practice margin from cardiovascular work.

Gaps in knowledge

No clear direction for payment reform has surfaced beyond the Center for Medicare and Medicaid Services (CMS) pursuit of policies that reward efficient/effective care and penalize inefficient/ineffective care. Private insurance companies are threatened by political changes that could herald a “Medicare For All” environment. Hospitals and practices must decide what changes to make now that are most likely to mitigate revenue losses in the future.

Possible solutions and future directions

CMS remains the best reference point. The following areas are central to new CMS payment models, and are likely good directions to consider:

  1. Pursue population health. CMS is looking to reward hospitals/practices that engage in population health activities. So, programs or policy changes aimed at improving the health of groups of patients will likely position an organization well to face future changes. For example, rather than looking to increase the number of PCIs done per year, hospital organizations might look to broaden the number of patients that rely on their services, enhance preventive cardiology efforts, and try to keep the number of procedures flat. This is counter-intuitive now, but will be the winning hand in a capitated environment.
  2. Improve channels of communication. Always key, communication is more valuable now than ever, especially for hospitals with a mix of employed and independent providers. Aligning incentives begins with understanding of the goals and why they’re important.
  3. Aim to minimize CMS penalties/maximize rewards. We’re used to talking about hematoma rates, guideline-directed medication use, etc., and these things now fold into CMS quality metrics. Rewards and penalties are linked to performance here. Regular (eg, monthly) reviews with physicians, and special events off hospital grounds to inform independent providers, are high value.
  4. Steer toward care standardization. By some estimates, variability in care is among the principal drivers of high healthcare costs in America. The best way to cut costs is to avoid waste, and the best way to avoid waste is to have agreed-upon standard care approaches whenever possible. Even small variations (“I like wire A, you like wire B”) can be expensive but some flexibility is necessary in a practice. Big variations (“I like to try 3-vessel stenting in my diabetics before I bring a surgeon into the picture”) should be addressed openly, and care expectations set based on objective measures of optimal outcome.
  5. Focus on patient experience. The rewards and penalties for good (or bad) patient experience account for 25% of CMS payment holdback. Simple changes can greatly improve patient experience. For example, sitting down with patients and their families during daily in-patient rounds dramatically increases perceptions of the amount of time spent and effectiveness of communication.
  6. Attend to provider wellness. MDs have twice the suicide rate of other professionals. Signs of burnout affect as many as two-thirds of cardiologists. Listening to what providers need, and doing the best to reduce burdens (especially administrative burdens) leads to a happier, healthier workforce and better care.
  7. Leverage technologies smartly. IT isn’t the solution for everything, but can be the solution for some (perhaps many) factors that hinder communication, contribute to care variability, and add to provider dissatisfaction.
  8. Get involved in community health. This is linked to the first listed suggestion. Primary care providers are expected to become stronger gatekeepers of services. Routine clinical care should be the domain of primary care, not specialty care. Specialists need to partner with primary care teams more effectively to deliver optimal, cost-effective primary and secondary preventive cardiovascular care.