An alternative to selling
Cardiologists look to groups for safety in numbers
A turning point in the career of cardiologist Stanley Spitzer, FACP—and all the other cardiologists in the Delaware Valley—occurred when Keystone Health Plan East, one of the two giant HMOs in the area, changed the way it pays for cardiac health care.
A couple of years ago, the Blue Cross-Blue Shield-owned HMO began paying cardiologists a global fee of less than $500 to provide 90 days of cardiac services. Doctors get the same amount whether the patient requires an office check-up or a full complement of stress tests, echocardiograms and heart surgery.
The change has forced Dr. Spitzer—along with cardiologists throughout the Philadelphia area—to view large groups in a new light. Three years ago, Dr. Spitzer went from being one doctor in a private four-person cardiology group to one of 22 doctors working in seven separate offices in the city and suburbs. The group, Cardiology Consultants of Philadelphia, is already the biggest independent group in the city and is poised to double in size over the next six months.
Dr. Spitzer said that cardiologists' decision to flock to big groups is simple. "If 10 [cardiologists] are seeing patients with pain that turns out to be muscular, that's great. We've now made about $5,000. But if one guy alone sees a patient who, it turns out, needs a stress test and an echo, he loses. You can't do it by yourself. You need to be big."
Another advantage to being big, he said, is that you can see enough patients to justify owning nuclear cameras and other high-tech equipment. The result is that all diagnostics can be done in the office, saving the group from having to pay hospital prices for these services.
Efficiencies of size also mean that the group can now afford MBA-trained management and a computerized billing system that can track the 250 different insurance plans the cardiologists accept. Plus there are the savings reaped through joint purchasing, like a new contract that is saving the group nearly $50,000 a year on malpractice insurance.
Growing into a large group has another benefit: It can give a physician the opportunity to remain independent and not feel pressured to sell to one of the growing health systems in the region. "We're private entrepreneurs and that's what we want to stay," Dr. Spitzer said. Although the group works exclusively with Allegheny University hospitals—Dr. Spitzer is a long-time volunteer professor of medicine and cardiology at the former Hahnemann medical school and hospital, which is now part of Allegheny—it isn't owned by Allegheny and has as little interest in becoming acquired as Allegheny has professed in owning specialists.
Going the merger route is not without some difficulty. Three years ago when the first two four-man groups came together in the original merger, it was easy, because they all knew each other and practiced similarly. "As we get bigger, however, we have to be careful," Dr. Spitzer said. "There are more cardiologists than are needed in Philadelphia, and there is a wide variety in how they practice, both from a cost standpoint and quality standpoint. ... One of these days the insurance companies are going to act on that. They have done most of their marketing on the basis of price; eventually they are going to market on the basis of quality."
Cardiologists in Pennsylvania are familiar with the concept of quality report cards. The state's Health Care Cost Containment Council publishes doctor-specific data on cardiac surgery and treatment of acute myocardial infarction. "Our group was ranked in the middle—average—which was OK with us," Dr. Spitzer said.
And although he and his colleagues have all the hassles of utilization review from HMOs, Dr. Spitzer said the group has never been threatened with doctor deselection. In part, he says, this may be because "we're big enough and we know our statistics, our lengths of stay for bypass surgery. ... But I would think that in the future there would be some cardiology groups that might get cut by insurance companies, and there will be a few one- and two-man groups in the area that haven't merged with anybody because nobody wanted them."
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