Payors as Change Agents for Physician Employment Models

11.3 / IAGS 2019
Session 11: Industry Session 1
Payors as Change Agents for Physician Employment Models
Problem Presenter: J. Jeffrey Marshall, MD, MSCAI, FACC

Statement of problem or issue

Over the last decade, the number of cardiologists in employed models of integrated practice has grown from ~15% to over 50%. Concurrently, the number of cardiologists in private practice has gone down from ~50% to ~20%. Over the same decade, reimbursement for both private practice and integrated cardiologists has increased, although a payment gap of around $150,000/annum, on average, separates these two groups in favor of integrated cardiologists. The source of this gap is external to a cardiologists’ actual productivity, and while it has many components, a prominent piece of it is the site-of-service fee (also known as the facility fee) collected by the hospital who employs the cardiologists. Since the facility fees are external to a cardiologists’ productivity, and a source of aggravation to insurance companies and payors, these fees could be manipulated by outside forces, including payors, to effect physician employment decisions. Examples of payors attempting to change these fees to alter cardiologists’ employment decisions, have been attempted, thus far without much success.

Gaps in knowledge

The healthcare landscape is changing rapidly. Traditionally, payors and providers were on opposite sides of a chasm – hospitals and physicians submitted invoices and payors remunerated for services rendered. Now, big data companies like Alphabet, Amazon, Apple and Microsoft are entering the healthcare arena. Additionally, insurance companies have teamed up with other big businesses to create new models of healthcare delivery. Some of these big data and insurance conglomerates are becoming payor-provider entities (i.e. they deliver healthcare services and they pay themselves for the care, controlling all aspects of care delivery and expenditures). Examples include, but are not limited to: Amazon/Berkshire Hathaway/JP Morgan, CVS/Aetna, and many others. Many have well known, indeed luminary, physicians as leaders. These payor-provider entities recognize that about 30¢ of every dollar spent in healthcare is waste. Eliminating and retrieving this waste would be advantageous to payor-provider entities. This recovered waste could be redirected as profits to companies, savings to patients, and means to motivate providers and their decisions, including their choice of employment models.

Possible solutions and future directions

While no one knows with certainty what the future holds in healthcare and cardiovascular care-delivery, the introduction of big data and big business, payor-provider entities is concerning to cardiologists who deliver care, one patient at a time either in private practice or as an employed physician. Current healthcare systems (mostly hospital-based companies) and their cardiology employees have a few options when interacting with payor-provider entities. They can begin to collaborate with new payor-provider entities, ignore them, be consumed by them, or create their own payor-provider entities. The presence of luminary cardiologists and other physicians as executive members of big-data/business, payor-provider entities may signal that the ever-important physician perspective is being considered when decisions are made by these large entities.