Policy expert explains why cardiology services in the US are getting more expensive

The problem is particularly significant as the population ages and the physician workforce faces shortages. Snyder said the number of Americans ages 65 and older is expected to increase from about 55 million in 2020 to 73 million by 2030, while the average age of cardiologists is approximately 57.

Federal healthcare policies have driven private practices out of business

Snyder contends that current federal payment policies create incentives for hospitals to acquire independent practices because the same services can receive substantially higher reimbursement when performed in hospital outpatient settings. At the same time, congressional policies governing Medicare spending have caused a 33% reduction in cardiologist payments since 2001. This has financially impacted private cardiology practices, leading to many being open to selling or integrating with hospital systems.

"Essentially the government policies have created the perfect storm for consolidation with the hospital systems," Snyder told Cardiovascular Business. "And unfortunately, what we do know by statute and rulemaking, it is the higher cost of care. And so this is why it's not only pushing physicians out of independent practice, but you're giving the hospitals the ability to pull them into that setting. So these are really kind of misaligned incentives. We really should have a system that is patient-centric, physician-led, and professionally managed, but in a cost-effective way that does not create this cost inefficiency and make our healthcare system unaffordable and hence not accessible."

As an example, he cited an echocardiogram performed in his Dallas-area office, where the Medicare allowable amount for the technical component is about $123. Performing the same test in a hospital outpatient department can result in a charge of more than $500. Patients with 20% coinsurance consequently face higher out-of-pocket costs. For Snyder’s practice, if it were converted to hospital employment, the change is ownership could add about $25 million annually in costs for just those two common services if the same volume of procedures were performed under hospital outpatient payment rules.

Similarly, Snyder's practice has an ambulatory surgical center in the same building as the hospital's outpatient cardiac cath lab, but they are on different floors. He explained getting ion the "magic elevator" in the building can increase or decrease the costs for the same procedure depending on what floor you have a procedure. He said the difference in pricing between the floors for a coronary angiogram and to put a stent in between these two labs is roughly $5,600 for a Medicare patient.

"On the first floor, it's roughly $11,000. So for the mere investment of taking an elevator ride up to the sixth floor, I can cut that cost, about $4,500 to $5,000. Same patient, same stent, same doctor. The patient parks in the same parking lot, I park in the same parking lot. Unfortunately, the unsuspecting patient has no idea of this disparity in cost that's embedded in the system largely from governmental action or inaction from the Department of Health and Human Services (HHS) and from statutes. So these are the type of things we are trying to address," Snyder explained.

The push for site-neutral payments

The differences in costs for the same procedure are driving an advocacy movement for site neutrality, where a procedure will be paid the same regardless of its location. He said a Blue Cross Blue Shield study looked at what would be the cost savings if we had 100% site neutrality in the U.S. at all places of service and all specialties. It projected site neutrality would save the U.S. healthcare system about $480 billion over 10 years, Snyder said. That would include Medicare savings of about $202 billion.

He said that would be more than enough to pay for to fix the physician fee schedule. This he said would allow independent physicians to stay independent and offer the high quality, affordable outpatient sites of care in their offices and ambulatory surgical centers.

The financial pressure has already contributed to the large amount of consolidation of private practices into hospital systems. A MedAxiom study in 2008 found that 90% of cardiologists were employed in private practice, but a decade later, that changes to 90% employed in hospitals or by private equity companies.

Lower Medicare payments are also driving independent physicians to retire early or move into concierge medicines, Snyder said. While some consolidation may help practices develop the infrastructure needed for value-based care, he warned that consolidation driven primarily by payment disparities can have the opposite effect of value-based models by increasing costs because of the change of serves now being provided by a hospital.

Snyder said proposed federal changes to site-neutral payments and the expansion of services available in ambulatory surgical centers could signal a shift toward moving lower-acuity care away from hospitals and into physician offices, ASCs and the home.

But, he argues the “independent model” can provide high-quality, affordable care, but physicians need to be involved in policymaking to ensure reimbursement incentives support, rather than undermine, that model.

Since federal policies have impacted cardiology practice, costs and patients so much, he said it is very important for physicians to be at the table to ensure polices help deliver equitable care, and not just drive up costs with poorer outcomes.

"We as physicians are going to have more impact on the healthcare patients receive through our work in boardrooms, legislative chambers, and regulators offices as we will in exam rooms and operating rooms. For this reason, we as physicians need to know the hallways of the capitals in Austin and DC, as well as the hallways of our own hospitals. We need to know our legislators as well as our own patients, because at the end of the day, as a clinician, I treat one patient at a time, but as a physician advocate, I can treat a whole country all at once," Snyder said.