REPORT: 2015 Cardiovascular Provider · PDF file2015 Cardiovascular Provider Compensation and Production Survey ... per cardiologist Most of this gain is attributable to a signiÞcant

2015 Cardiovascular Provider Compensation and Production Survey

REPORT:

MEDAXIOM CARDIOVASCULAR PROVIDER COMPENSATION & PRODUCTION SURVEY – 2015 3

MedAxiom is proud to be publishing its 3rd annual Cardiovascular Provider Compensation & Production Survey. These data, obtained from our vast cardiovascular membership, provide invaluable peer comparisons to programs trying to manage themselves at peak performance—more and more a prerequisite for success in the tightening economics of healthcare.

With each iteration of our publication MedAxiom attempts to refine and expand the data available, and this year’s survey is no exception. For the first time this survey contains valuable data for non-clinical compensation,

including administrative (leadership) positions, medical directorships and at-risk incentive compensation. This information provides critical insight into value-oriented compensation for our fair market valuators, allowing programs to better align provider compensation with the new value economy.

Additionally, MedAxiom added a structural heart (TAVR) filter to its database, allowing direct comparisons between programs with and without these services. This granularity gives a more accurate peer assessment for important measures like diagnostic testing patterns, work and compensation.

Pushed in large part by Medicare’s rapid transition from volume-based reimbursement to one tied inextricably to value (quality, cost, service), healthcare as an industry is changing at an unprecedented pace. At MedAxiom, we believe data sharing and peer-to-peer networking provide the most powerful means for advancing cardiovascular programs nationally. Our sole focus on the cardiovascular segment allows us to get extremely deep and detailed into that world, providing our members with a wealth of useful and relevant metrics. This publication is just one example of this powerful network.

FORWARD

Joel SauerVICE PRESIDENTMEDAXIOM CONSULTING

A Wealth of InformationBy Joel Sauer


CONTENTS

Forward ................................................................................................................. 3

Survey Highlights & Insights.................................................................................. 7

1. Aligning Economics with Value: The New CVSL Imperative ............................. 9

2. Overview of the Report .................................................................................. 14

3. Survey Results – Cardiology ........................................................................... 16

Ownership Comparisons ................................................................................ 16

Subspecialty Breakdowns ............................................................................... 18

Changes by Geography ................................................................................. 19

Key Volumes & Ratios ..................................................................................... 20

Panel Size ....................................................................................................... 23

Structural Heart Comparisons ........................................................................ 24

4. Survey Results – Surgery ................................................................................ 25

5. Survey Results – Non-Clinical Compensation................................................. 27

6. Delivering High Quality, Low Cost Care: The Growing Role of .................... 28

Advanced Practice Providers and Care Teams

Cardiology Tables ................................................................................................ 36

Surgery Tables ..................................................................................................... 38

Non-Clinical Compensation Tables ..................................................................... 40

APP Tables ........................................................................................................... 41

Contents


Continuing a trend, overall cardiology compensation ticked up slightly in 2014; the median moved from $512,401 per Full Time Equivalent in 2013 to $542,000 per FTE in 2014. However, most of this gain is attributable to a significant change in subspecialty reporting mix within the private cohort. The result of this survey bias caused the private physician compensation to spike over 10 percent from a median level of $425,897 per FTE in 2013 to $470,160 in 2014. A detailed explanation of this bias can be found in the narrative under “Survey Results – Cardiology” later in this publication.

Overall production levels, as measured by work Relative Value Units (wRVUs), fell for the fifth straight year. Median cardiology production for 2014 now sits at 9,538 per FTE physician. In a similar trend, total imaged stress studies fell back for a fourth straight year, dropping from an annual rate of 286 per FTE in 2013 to 272 per FTE in 2014. A significant contributor to this decline was the continued erosion of nuclear SPECT volumes where the ratio of tests performed to total cognitive encounters (a strong measure of cardiology patient population) dropped from 9.0 percent in 2010 to just 7.1 percent in 2014.

In an effort to more accurately measure cardiology patient populations, MedAxiom added a patient panel measure and started collecting data for the 2013 survey. Now with a clarified definition and robust member participation, this metric will allow for more consistent testing and procedure comparisons than either the FTE or cognitive encounter denominators can yield. Beginning with the 2016 survey, relevant trending data will become available. Some specific volume measures using patient panel as the denominator can be found on page 23 of this report.

On the surgical front very little difference is noted between compensation for cardiac versus vascular surgeons, with the former measuring in at a median of $584,854 per FTE and the latter just slightly behind at a median of $570,345 per FTE—a difference of 2.5 percent. In sharp contrast, production between these two cohorts, as measured by wRVUs, differ significantly with vascular surgeons (9,085 per FTE) producing 22 percent fewer than cardiac surgeons (11,653 per FTE) in 2014.

EXECUTIVE SUMMARY

Survey Highlights & Insights

$512,401

$542,000

$29,599 INCREASE per cardiologist

Most of this gain is attributable to a significant change in subspecialty reporting mix within the private cohort.

10,351

9,8629,637 9,538

Production levels keep

fallingper cardiologist

per cardiologistper cardiologist

per cardiologist

Like the findings in cardiology, surgeons in the integrated environment fare significantly better than those in private practice. For 2014 that difference was greater than 36 percent with integrated surgeons showing a median compensation level of $592,804 per FTE and private a median level of $434,546 per FTE.

Non-Clinical Compensation Measures

Also new to this publication are measures of key non-clinical compensation metrics. These find that the median level of total non-clinical compensation earned ($45,457 per FTE) is approaching 9 percent of median total compensation. Further, the at-risk incentives that are put in place as part of co-management or other physician alignment strategies are quite challenging to achieve. For 2014 the median ‘achieved’ was just 80% of the total available in at-risk compensation.

It is by publishing these cutting-edge measures that MedAxiom hopes to continually move the needle forward for cardiovascular programs across the country.

EXECUTIVE SUMMARY

PRIVATE INTEGRATED

Surgeons’ Compensation

$434,546

$592,804

36% DIFFERENCE

Leadership Positions

Medical Directorships

Call Coverage

Hospital/Health System Incentive Earned

Hospital/Health System Incentive Available

Non-Governmental Payor Incentives Earned

Non-Governmental Payor Incentives Available

9% NON-CLINICAL

COMPENSATIONNon-Clinical Compensation


Not that long ago we were talking about value-based reimbursement in the same vein we discussed personal jetpacks; probably inevitable but way out in the future. Well, that all changed earlier this year when the Centers for Medicare & Medicaid Services (CMS) announced very ambitious and near-term goals to move 50 percent of its reimbursement to some form of value (Figure 1a). For those keeping track, by the time of this printing the CMS fiscal year 2018 will be just two short years away!

Shortly after the CMS proclamation, the nation’s largest commercial carriers announced the formation of The Health Care Transformation Task Force, with the goal of shifting 75 percent of their contracts to include incentives for quality and lower-cost services by 2020.1 Between CMS and these aligned commercial plans, you have nearly 100 percent of the cardiovascular patient population covered. So the value train has indeed left the station and now programs nationally are moving to align around this new paradigm.

This Change Won’t be Easy or QuickLike anything new in an industry as complicated as healthcare, this fundamental shift in how business is conducted won’t happen easily or without intention. Just about every aspect of the current infrastructure, from data systems to compensation plans, is oriented around the volume paradigm—and every single one will

ALIGNING ECONOMICS WITH VALUE: THE NEW CVSL IMPERATIVE

1. Aligning Economics with Value: The New CVSL ImperativeValue both for the patient & organizationBY JOEL SAUER

FIGURE 1a –Target percentage of Medicare FFS payments linked to quality and alternative payment models in 2016 and 2018

10 MEDAXIOM CARDIOVASCULAR PROVIDER COMPENSATION & PRODUCTION SURVEY – 2015

need to be retooled. What promotes success in the volume world is often in direct conflict with success in the value world.

For instance, few would disagree that for the patient, readmissions are best to be avoided. However, in the volume world readmissions mean additional revenue to a hospital. On the physician side, readmissions are also additional work Relative Value Units (wRVUs) and revenue. This in no way is to even hint that any provider would intentionally promote or allow a readmission to occur, but in its current state, improving patient care hurts margin.

It is this type of malalignment—and there are many more, both from external payors and inside our own organizations—that needs to be squared. This alignment will take considerable time. Fortunately, many programs are well on their way. To the rest, get started!

Measurements of Value are Improving What is also interesting to watch is how the sophistication level of these “value” measures is increasing as those who pay for services not only expand what they can measure, but also which needles actually make a difference. For example, in the early years of the Physician Quality Reporting System (PQRS) most providers considered the metrics nothing more than “checking boxes” with little to no impact for the patient regardless of how well they scored. Similarly, the combined CMS and Joint Commission effort around hospital-based Core Measures were largely regarded as documentation speed-bumps, not as strong correlates to quality or value.

Few would discount the importance of patient satisfaction as an overall indicator of healthcare value, and in fact many early provider incentive plans included patient satisfaction improvement as a payment metric. However, moving the needle from a 97 percent to 98 percent approval—certainly a laudable advance—provided little to no “bang” to the organization, particularly from a financial standpoint.

Apparently CMS’ analyses of the data yielded similar conclusions. At the same time it announced the shift to 50 percent value-based reimbursement, CMS also notified providers that it was shifting the value weighting within the overall Value-Based Purchasing program (the collection of the individual initiatives), moving away from process and service, and over to outcomes and efficiency—aka “cost” (see Figure 1b). Many expect this shift to continue in the future.

Public Data is Quickening the Pace of Change Pushing advancement forward on the value front is the expansive and growing publically available healthcare data. HospitalCompare (https://cms.gov/hospitalcompare) and PhysicianCompare (https://cms.gov/physiciancompare) are two examples of CMS making data available to the public and in a very easy-to-use web-based portal. Figure 1c provides a sampling of other public sources of healthcare data.

The original cohort of these data were from Medicare claims, strongly tied to reimbursement and the economics of medicine, but more loosely to the clinical side. However, this vast warehouse of claims data is now being married with true quality measures from sources like the American College of Cardiology’s Catheterization Percutaneous Coronary Intervention (Cath PCI) and the Society for Thoracic Surgery’s (STS)


FIGURE 1c – Public Data Sources

©MedAxiom

FIGURE 1b – VBP Domain Weighting Percentages

©MedAxiom


registries. The marriage of these formerly separate data sets will allow for correlate studies on cost and outcomes, filling a huge void in the ability to measure overall value.

The power of this expanding knowledgebase cannot be underestimated and it’s likely the pace at which its sophistication grows will only increase, giving payors and other healthcare stakeholders more tools for measuring value. It’s also important to note that the interest in these data goes beyond traditional healthcare patients, providers, payors and consumers; entrepreneurs and investors are also taking note and finding creative ways to leverage the data for profit. So if you don’t feel like the current measuring sticks accurately reflect quality and value, just wait, they’ll get there—and fast!

Growing Physician/Hospital PartnershipsThere is no denying that the declining economics within the private cardiology practice model drove some, if not all, of the migration to hospital or health system employment. However, in its 2013 Annual Integration Survey, MedAxiom found that over three quarters of respondents cited the evolving healthcare market as a major motivator for integration.

At the time of that survey, barely more than 50 percent of cardiology practices were integrated with a hospital or health system. Today that ratio is 73% (Figure 1d). For cardiovascular surgeons it’s even higher, where 85 percent are in an integrated environment. On the private group front, many are establishing co-management and other financial alignment strategies with hospitals to sync risk and reward. The bottom line is that in the new value economy hospitals and cardiovascular physicians are partners going forward—regardless of where the physicians are employed—and leveraging this partnership will be a key to success.

Although no one, including Medicare, really knows exactly what 50 percent value-based reimbursement looks like, this is clear: physicians control or influence nearly 100 percent of the costs in healthcare2, so having them engaged beyond just clinical quality will be paramount. In response, more and more hospitals and health systems that employ physicians are moving a portion of compensation away from traditional production measures, like work Relative Value Units (wRVUs) to value indicators. Similarly with the private group setting, hospitals and physicians are partnering around value through legal vehicles such as gain sharing arrangements, co-management, clinically integrated networks and the like.

The value indicators used for incentives in these partnerships tend to be very specific to the organization, but are generally centered on three main categories, collectively referred to as the Triple Aim: quality (outcomes), service (stakeholder satisfaction) and efficiency (cost). Figure 1e shows the top 5 value initiative categories based on the MedAxiom 2013 Annual Integration Survey.


1. Heart Failure Care Improvement2. Process Improvements3. Reductions to Length of Stay4. AMI Care Improvement5. Patient Satisfaction Improvement

FIGURE 1e – Top 5 List of Value Initiatives

©MedAxiom

FIGURE 1d – Ownership Split

©MedAxiom

Physicians control or influence nearly 100 percent of the costs in healthcare.


New Peer Data AvailableIn anticipation of the need for data around value compensation, in 2015 MedAxiom added several key value measures to its Annual Survey. The definitions for these new measures can be found in Figure 1f, with the actual data contained in the table on page 40 toward the end of this publication. Following are several important call-outs from these data points.

First, looking back at the 2013 Annual Integration Survey, it’s noteworthy that the percentage of at-risk compensation for cardiovascular physicians has grown from approximately 7 percent of total compensation to 8.4 percent. Anecdotal evidence from the MedAxiom Consulting team based on work with integrated systems across the country suggests this trend will continue into the future and may be accelerating. Second, these value incentives are far from slam dunks. Figure 1g shows that only 80 percent of the available incentives were actually earned; 20 percent were not achieved. Last, it is interesting to note that the total non-clinical compensation earned per FTE physician is over $45,000, which is nearly $1 million in aggregate for the median sized group. That’s real money!


FIGURE 1f – Non-Clinical Compensation Definitions

Leadership Positions Include only payments not at risk for performance, such as time or stipend based chair positions and administrative leadership positions (CMO, CMIO, CVSL Director, etc.). NOTE: Do not include medical directorships here; they go in the box below.

Medical Directorships Include only payments not at risk for performance, such as time or stipend based directorships (cardiac rehab, cath lab, EP lab, non-invasive imaging, etc.).

Call Coverage Call pay for STEMI, general, outside facilities, etc.

Hospital/Health System Incentive Compensation

Include non-production performance (at risk) payments for improvements to quality, serivce and cost, co-management incentives, VBP, gain sharing, administrative incentives, etc. Please also provide the total payment available in Column C.

Commerical (non-governmental) Payer Incentive Compensation

Include non-clinical performance (at risk) payments for improvements to quality, serivce and cost, coding & documentation, etc. Please also provide the total payment available in Column C.

©MedAxiom

FIGURE 1g – Median Incentive Achieved vs Available

©MedAxiom

©MedAxiom


ConclusionFor years now there has been speculation as to IF and WHEN reimbursement would shift from volume measures to quality, service and cost. With the recent announcements by Medicare and major commercial carriers, those questions have been answered. Still ahead is the frontier of direct population health, but the current reward/penalty system Medicare has created around the Readmission Reduction Program (RRP) relative to the heart failure population is already providing a glimpse of the challenges that lay ahead.

Through all this murkiness there is clarity on several fronts. As a group, physicians are the single largest influencer of healthcare costs overall. In order to succeed in a value economy, this asset must be oriented and economically aligned with both organizational and third party payor value objectives. These changes will take significant time and effort which, given the pressing timeline, mandates that programs get earnest soon. Further, the amount of value data currently available is vast and growing. Expect the sophistication and meaningfulness of these data to improve, and for the pace of this evolution to increase over time.

Given the nature of the overall cardiovascular product spectrum, physicians and hospitals will need each other for success in this new environment, regardless of where the physicians are employed. This mutual dependence will require careful thought around Triple Aim initiatives and a commitment to recognizing and dealing with economic misalignment, whether in compensation models or co-management agreements. The consequences of missing on this front will bring painful, albeit predictable, results.

1 Modern Healthcare, “Major providers, insurers plan aggressive push to new payment models”, January 28, 2015. 2 Health Care: The Disquieting Truth” [NYR, September 30, 2010], Arnold Relman, MD


Given the nature of the overall cardiovascular product spectrum, physicians and hospitals will need each other for success in this new environment—regardless of where the physicians are employed.


MethodologyEach year in early spring MedAxiom surveys its membership on financial, staffing, productivity, compensation metrics, and a number of demographic measures such as location, size of practice, ownership model, physician subspecialties, and so on. Data is submitted through online data entry and via direct exports from the practice management system.

Member submissions are processed in MedAxiom’s data warehouse and compiled into over 800 measures for member analysis. Members then use MedAxiom’s proprietary Business Intelligence tool, called MedAxcess, to perform many different types of analyses. MedAxiom also extracts its own data to create reports for the membership, partnering organizations, and the public.

The physician compensation and production data provided in this report was collected over the 2008-2014 timeframe. It has also been filtered to only include full-time physicians.

MedAxiom Data Integrity: The Vetting Process MedAxiom realized long ago the importance of well-vetted data and how errant information can destroy the value of a data set. With this recognition, MedAxiom now goes above and beyond in its pursuit of data integrity. The fact-checking process begins with an automated comparison of self-reported RVUs to those calculated by MedAxiom based on the CPT upload provided by our members. If there is a discrepancy of 1% percent or greater, a more thorough review of the data is triggered. Additionally, data manually entered online immediately shows the operator a trend for comparison to the previous year. This provides an instant review if there are large differences from year to year.

Once data is loaded into our MedAxcess database, some of the critical measures relating to Full Time Equivalent physicians and mid-level providers, as well as some elements of financial information, are verified to make sure that they are in alignment with the statistical norms of the rest of the database. A set of limits defined by a team of cardiology administration experts is the key to this step. All data points are examined against their own same-practice historical trend and against the practice’s peer set to determine if the data point is outside a reasonable range. If a data point is determined to be an outlier it is excluded from the data set until the practice is contacted and the data point can be verified. Once confirmed or corrected, the data point is allowed back into the data set where it can be viewed by other members in a de-identified fashion.

Data verified this way is included in the overall calculations such as percentiles, mean, median, and standard deviation. All submitted data goes through a rigorous process that relies on cross-checking, computer-automated vetting and review by human eyes, with follow-up phone calls and emails to data submitters when there are questionable results.

Having the right measures and high data integrity is what has made MedAxiom’s data the most trusted data in the cardiovascular industry.

OVERVIEW

2. Overview of the Report

MedAxiom goes above and beyond in its pursuit of data integrity.


OVERVIEW

DemographicsA total of 150 practices, which represents 2,574 full-time physicians, completed the 2014 Annual Survey. Not represented in this survey were an additional 352 part-time physicians. The integration trend continued to accelerate this year as the number of hospital integrated practices (113) again outnumbered the private groups (37). The median size of the responding groups to this year’s survey was 15 FTE physicians.

2014:150 total practices2,574 physicians

GEOGRAPHIC AREA

NUMBER OF PHYSICIANS

COMPENSATION METHODOLOGY

OWNERSHIP MODEL 2012-2014

PROVIDER BASED BILLING


Ownership ComparisonsLet’s start off with a great example of how survey data has to be considered carefully so as not to draw inaccurate conclusions. On the surface it looks like the biggest surprise in the 2015 data is that private physician’s compensation jumped by more than 10 percent from $425, 897 in 2013 to just over $470,000 in 2014 (Figure 3a). This would represent a pickup of over $44,000 per full time equivalent (FTE) cardiologist.

However, when we look at the subspecialty participation rates as compared to last year (see Cardiology Table in the back of this book), we see that the number of non-invasive physicians—the lowest paid of all the subspecialties—participating in the survey dropped from 201 in the 2013 data to 126 in 2014. By contrast, the number of participating interventional physicians—the highest paid of the subspecialties—jumped by 31. It is this ratio mix that caused the overall median to increase, not any real improvement in private physician compensation over the past year.

Two key data points support this conclusion. First when looking at the individual subspecialties within

SURVEY RESULTS – CARDIOLOGY

3. Survey Results - Cardiology

2013 2014 % DIFFERENCE

Private 10,246 10,438 1.9%

Integrated 9,411 9,210 -2.1%

TABLE 3b – wRVUs Comparison by Ownership

©MedAxiom


Electrophysiology $456,337 $460,621 0.9%

Invasive $425,000 $428,378 0.8%

General Non-Invasive $394,586 $411,667 4.3%

Interventional $479,017 $497,840 3.9%

TABLE 3a – Private Physician Compensation per FTE

©MedAxiom

It is this ratio mix that caused the overall median to increase, not any real improvement in private physician compensation over the past year.

$425,897 $470,160

$555,365 $555,411

$-

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

2013 2014 Private Integrated

FIGURE 3a – Cardiology Compensation per FTE by Ownership

©MedAxiom

30% 18%


the private cohort we see that none improved more than 4.5% from 2013 to 2014 (Table 3a). Since the comparisons are at the median (half above, half below) the reduction in lower compensated physicians (general non-invasive) and the increase in higher compensated physicians (interventional) pushed the median upward. Second, private physician productivity, as measured by work Relative Value Units (wRVUs) increased less than 2 percent (Table 3b). Since wRVUs correlate very strongly with physician compensation, it seems unlikely that a 2 percent increase in production could translate into a 10-plus percent spike in compensation. A 5-year trend on wRVU production can be found in Figure 3b.

There is an interesting trend within the private cohort patient service revenue per FTE cardiologist (Figure 3c). It would appear that private groups are gaining expertise at earning revenue beyond just patient services, as the net difference between total and patient services has grown from around $24,000 per doctor in 2011 to over $113,000 in 2014. There are myriad sources for this extra revenue, but often a major source is through hospital contracts for co-management and other value-oriented objectives. Later in the survey we will publish more detailed information on compensation for these types of arrangements.

Looking back to Figure 3a we see that integrated doctors simply held steady with last year. This means mathematically that private physicians closed the gap with integrated physicians by a significant margin over the past 12 months, narrowing the differential from 30 percent in 2013 to 18 percent in 2014. Again, the survey bias described above is the major driver of this improvement so only future surveys will provide clarity on the true spread between these two groups.

The net difference between total and patient services has grown from around $24,000 per doctor in 2011 to over $113,000 in 2014.


$24,026

$70,134 $82,660

$113,060

$-

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$-

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

2011 2012 2013 2014 Patient Service Revenue Total Revenue Net Difference

FIGURE 3c – Private Group Revenue per FTE Cardiologist Trend

©MedAxiom

10,507 10,336

10,536

10,246 10,438

10,084

9,678 9,709

9,411 9,210

10,351

9,862 10,007

9,637 9,538

9,000 9,200 9,400 9,600 9,800

10,000 10,200 10,400 10,600 10,800

2010 2011 2012 2013 2014

Private Groups Integrated Groups Overall

FIGURE 3b – Median wRVUs per FTE Cardiologist

©MedAxiom


Driven then almost entirely by the gains of the private cohort, overall cardiology compensation increased nearly 6 percent to $542,000 per FTE, around $30,000 more per physician than in 2013 (Figure 3d). The previous high water mark for cardiology was in 2012 when the median compensation topped $548,000.

Private groups continue to have higher production, as measured by wRVUs, than their integrated peers (see Cardiology Table in the back of this book). The production gap widened in 2014, stretching from just over 800 wRVUs per FTE to over 1,200 wRVUs. When considering that the overall database’s median sized group is 15 cardiologists, which is fairly consistent between private and integrated groups, that production difference is equal to two FTE cardiologists. In other words, to produce the same number of total wRVUs, an integrated group would require two more physicians than a private group. At median compensation of $555,000, that equates to an additional $1.1 million in provider compensation.

Subspecialty BreakdownsIn addition to total compensation and wRVU production, MedAxiom calculates a compensation per wRVU data point. It’s important to note that this is not the same as a wRVU conversion factor, a common term used for the contractual payment rate in integrated employment models. The calculated rate discussed here and reported later in the tables is simply


$512,401

$542,000

$495,000

$500,000

$505,000

$510,000

$515,000

$520,000

$525,000

$530,000

$535,000

$540,000

$545,000

2013 2014

FIGURE 3d – Overall Cardiologist Compensation per FTE

©MedAxiom

TABLE 3c – Compensation per wRVU by Ownership by Subspecialty


Overall $53.78 $53.47 -0.6%

Private Blended $41.59 $42.63 2.5%

Electrophysiology $36.41 $36.89 1.3%

Invasive $43.77 $47.94 8.7%

General Non-Invasive $41.59 $42.20 1.5%

Interventional $41.97 $44.01 4.6%

Integrated Blended $57.21 $56.67 -0.9%

Electrophysiology $51.86 $50.80 -2.1%

Invasive $55.89 $56.30 0.7%

General Non-Invasive $62.30 $61.33 -1.6%

Interventional $57.43 $56.56 -1.5%©MedAxiom

To produce the same number of total wRVUs, an integrated group would require two more physicians than a private group.

$29,599 INCREASE

per physician


total physician compensation divided by total wRVUs.

Overall the compensation per wRVU rate remained flat in 2014 (Table 3c). These same data show only modest changes at the subspecialty level, with private invasive and private interventional achieving the largest gains at 8.7 percent and 4.6 percent respectively.

When reviewing compensation at the individual subspecialty categories all physicians except the interventional cohort saw increases from 2013 to 2014, as shown in Table 3d. The biggest increase went to non-invasive physicians (7.7%), then to electrophysiologists (5.6%) and finally invasive cardiologists (3.9%). A subspecialty breakdown by ownership model can be found in Table 3e.

Turning now to production, EP was the only subspecialty to see gains, although slight, in wRVUs per FTE from 2013 to 2014 with just a 1.1 percent increase (Table 3f). Even this very small gain for EP is noteworthy, however, as it is the first increase in wRVU production since 2010. Outside of EP all other subspecialties lost ground on production, with General Non-Invasive physicians falling back the most (4.3%).

Changes by GeographyCompensation in the Northeast region jumped nearly 17 percent from 2013 to 2014, by far the largest gain in the database (Figure 3e). In stark contrast, both the Midwest and West pulled back in total compensation, 3.4% and 5.4% respectively. Additionally, the Midwest fell from the top earning spot—a position it has held since 2010—and the South took over as number one.

The Northeast was able to achieve these gains despite a decline in wRVU production (Table 3g), which suggests that some form of survey bias may again be at play. Only the South region—still the reigning champ in terms of wRVU production—saw gains from 2013 (Table 3g). The West, which had the largest compensation decline as noted above, also had the largest wRVU decline, losing nearly 10 percent from 2013 to 2014.

Figure 3f shows the compensation per wRVU calculation for each region. It is somewhat expected that this figure rose for the Northeast based on the results described above. Less expected was that the West also improved its compensation per wRVU at nearly the same rate.

The full cardiology data tables including historical years can be found on pages 36-37 at the back of this publication.


TABLE 3f – wRVU Production by FTE Cardiologist


Electrophysiology 11,495 11,624 1.1%

Invasive 9,502 9,350 -1.6%

General Non-Invasive 8,211 7,858 -4.3%

Interventional 10,322 10,188 -1.3%©MedAxiom

PRIVATE INTEGRATED

Electrophysiology $460,621 $574,459

Invasive $428,378 $554,157

General Non-Invasive $411,667 $500,000

Interventional $497,840 $595,056

TABLE 3e – Compensation per FTE Cardiologist by Subspecialty

©MedAxiom

TABLE 3d – Compensation per FTE Cardiologist by Subspecialty


Electrophysiology $525,664 $554,958 5.6%

Invasive $521,740 $542,000 3.9%

General Non-Invasive $454,837 $489,776 7.7%

Interventional $564,654 $563,485 -0.2%©MedAxiom

Northeast region jumped by nearly 17 percent.


Key Volumes & Ratios Continuing a trend, cardiologists are performing a decreasing percentage of their total cognitive encounters, as defined by the Evaluation & Management (E&M) spectrum of the CPT codes, in the hospital. Figure 3g shows that total encounters are almost flat, but the number performed in the hospital fell for a fifth straight year. This is in keeping with healthcare trends in general, where more and more of the delivery is happening at an outpatient level.

Total new patients to the practice, a strong indicator of a healthy practice and a key driver of other production measures, jumped to 567 in 2014 on a per FTE basis (Figure 3h); this is the highest level seen since 2011. In contrast to this improvement, but in keeping with a historical trend, total imaged stress studies per FTE cardiologist fell for the fourth straight year (Figure 3i).

16.7%

5.5%

-3.4% -5.4%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

$-

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

Northeast South Midwest West

2013 2014 % Chng

FIGURE 3e – Changes in Compensation by Region

©MedAxiom

$52.54 $52.35

$60.30

$50.41

$56.24

$50.63

$56.91

$53.69

$44

$46

$48

$50

$52

$54

$56

$58

$60

$62

Northeast South Midwest West

2013 2014

FIGURE 3f – Compensation per wRVU by Region

©MedAxiom



Northeast 9,103 8,731 -4.1%

South 10,173 10,586 4.1%

Midwest 9,242 9,147 -1.0%

West 9,108 8,276 -9.1%

TABLE 3g – wRVUs per FTE Cardiologist by Region

©MedAxiom


It is important to note using FTE cardiologists as the denominator may not give us the best picture of a true trend. First, this count presumes all FTEs are the same from one group to the next and we know this isn’t the case just by variations in time off (Figure 3j). Second, the volumes for each physician may be strongly impacted by differences in group demographics like age distribution, the number of physicians working reduced schedules and individual productivity expectations, etc.

For these reasons, perhaps a better indicator of the trend is to use total cognitive (E&M) encounters, which is a measure of the patient population as opposed to the provider population (we exclude 99211 in this E&M total as it is a non-physician provider code), as the denominator. For imaged stress studies, this method shows a slight

2,845 2,816 2,819 2,856 2,738

1,853 1,878 1,849 1,854 1,908

965 954 867 851 829

-

500

1,000

1,500

2,000

2,500

3,000

2010 2011 2012 2013 2014

Total Cognitive Encounters Total Office Cognitive Total Hospital Coginitive

FIGURE 3g – Trends on Encounters per FTE Cardiologist


566 566

526 527

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2010 2011 2012 2013 2014

FIGURE 3h – Total New Patients

©MedAxiom

335 335 284 286 272

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2010 2011 2012 2013 2014

FIGURE 3i – Total Imaged Stress Studies

©MedAxiom

©MedAxiom


improvement for 2014 moving from 9.4 to 9.6 percent (Figure 3k). In other non-invasive imaging ratios also on Figure 3k, echoes held steady and nuclear continued a 5-year downward trend.

On the invasive side, both catheterizations and PCI (percutaneous coronary interventions) have declined over the past five years (Figure 3l). By contrast, pacemaker inserts have held steady when using total cognitive encounters as the denominator (Figure 3m). ICD implants as a ratio of total cognitive also have fallen four years straight (Figure 3m). ICD implants continue to receive a lot of attention from regulatory agencies and auditors, so there is clearly a blunting impact from these efforts on volumes. Figure 3m also shows one bright spot in the electrophysiology (EP)

realm with a nearly straight line progression upward for ablations.


12% 11% 12% 10% 10%

24% 25% 26% 25% 25%

9% 9% 8% 8% 7%

0%

5%

10%

15%

20%

25%

30%

2010 2011 2012 2013 2014

Total Imaged Stress Studies Total Echos Total Nuclear SPECT

FIGURE 3k – Non-Invasive Imaging Ratios per Total Cognitive Encounters

5.6% 5.1% 5.0% 4.9% 4.8%

1.7% 1.7% 1.5% 1.6% 1.5%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

2010 2011 2012 2013 2014

Catheterization PCI

FIGURE 3l – Invasive Volume Ratios per Total Cognitive Encounters

©MedAxiom

©MedAxiom

26

33

40

48

0

10

20

30

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60

25th 50th 75th 90th

FIGURE 3j – Days Off per Year

©MedAxiom


Panel SizeFor three years MedAxiom has been receiving member data on cardiology patient panel size, where panel size is defined as unique patient cognitive (E&M) encounters during the past 18 months measured at the group level. We believe panel size is the truest measure of a cardiology patient population, more so than physician FTEs and total cognitive encounters. It will become the standard denominator for many of the key ratios identified above.

In the first year our sample size was too small to be relevant and there were some known problems with the interpretation and consistency of the data definition. Last year the sample size grew and the definition stabilized. For 2015, we feel a high level of confidence in the panel size measure and believe trending will be available starting next year. Figure 3n shows patient panel size data per FTE cardiologist.

Table 3h provides some key volume indicators utilizing panel size as the denominator. An interesting call out from these data is from the catheterization measures. At the median levels we see that approximately one third (34%) of patients receiving a catheterization also have an intervention. As more and more catheterization registry data become public, correlates can be run to gain additional insights.

0.39%

0.43% 0.43%

0.39% 0.38% 0.39% 0.39%

0.26% 0.25% 0.23%

0.29% 0.32%

0.35% 0.38%

0.43%

0.20%

0.25%

0.30%

0.35%

0.40%

0.45%

2010 2011 2012 2013 2014

Pacemaker Inserts ICD Implants Ablations

FIGURE 3m – EP Volume Ratios per Total Cognitive Encounters

©MedAxiom


1,218

1,636

1,968

-

500

1,000

1,500

2,000

25th Median 75th

FIGURE 3n – Patient Panel Size per FTE

©MedAxiom


Structural Heart ComparisonsContinuing its tradition of creating a more sophisticated and relevant peer database, MedAxiom has added a new filter that allows comparisons at a more granular level, in this case those systems with structural heart programs. The advent of these new product offerings often has impact on other traditional volumes, such as catheterizations. Without the ability to compare like programs, inaccurate conclusions might be drawn about physician ordering habits, financial impact of the program and other components.

Table 3i shows these volume comparisons across several key tests and procedures.


WITH WITHOUT DIFFERENCE

Catheterizations 76 80 -5.3%

PCIs 52 48 7.7%

Echos 453 472 -4.2%

Nuclear SPECT 129 131 -1.6%

*Median per 1,000 patients (panel size as denominator)

TABLE 3i – Structural Heart Impact on Key Volumes

©MedAxiom

TABLE 3h – Key Volumes per 1,000 Patients (Panel Size)

25TH MEDIAN 75TH

Outpatient E&M (exclud 99211) 1,075 1,372 1,571

Inpatient E&M 342 559 745

Total Echos 371 465 558

Total Nuclear SPECT 88 129 183

Total Catheterizations 52 76 92

PCIs 22 29 38

Ablations 5 8 11 ©MedAxiom


4. Survey Results - SurgerySimilar to cardiology, surgeons in an integrated ownership model fare significantly better than their peers in private practice (Figure 4a), out earning them by more than 36 percent. Interestingly, private surgeons out-produce their integrated peers by around 7 percent when considering wRVUs as shown in Figure 4b.

Comparing at the surgical specialty level we see that compensation for both cardiac and vascular surgeons is quite similar (Figure 4c), varying by less than 3 percent. However, wRVU production between these cohorts is significantly lopsided, with cardiac surgeons performing 22 percent more units than vascular (Figure 4d).

The full surgical data tables including 2013 historical data can be found on pages 37-38 at the back of this publication.

$434,546

$592,804

$-

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

Private Integrated

FIGURE 4a – CV Surgery Compensation by Ownership

36% DIFFERENCE

©MedAxiom

11,370

10,582

10,000 10,200 10,400 10,600 10,800 11,000 11,200 11,400 11,600

Private

Integrated

FIGURE 4b – CV Surgery Production by Ownership

©M

edA

xiom

SURVEY RESULTS – SURGERY


11,653

9,085

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Cardiac Vascular

FIGURE 4d – CV Surgery Production by Specialty

©MedAxiom

$584,854

$570,345

$560,000

$565,000

$570,000

$575,000

$580,000

$585,000

$590,000

Cardiac Vascular

FIGURE 4c – CV Surgery Compensation by Specialty

©MedAxiom

SURVEY RESULTS – SURGERY

wRVU production between these cohorts is significantly lopsided, with cardiac surgeons performing 22% more units than vascular.


5. Non-Clinical CompensationIn the “Aligning Economics with Value” article above it was noted that reimbursement in healthcare is quickly moving from a sole focus on volume (wRVUs, CPT codes, procedures done, etc.) to one more focused on value (outcomes, cost, service). Given the critical role physicians must play in order to be successful in this transition, new compensation arrangements are springing up to help align economics between hospitals and physicians. Fair market valuators have noted a dearth of published peer data capturing these arrangements that is hindering their development—a dangerous miss given Medicare’s rapid migration to 50 percent value-based payments.

Given all of this, MedAxiom is very pleased to be publishing for the first time eight key measures capturing these “value-based” compensation payments to cardiovascular physicians (Table 5a). This list will undoubtedly grow, both in terms of number and sophistication, over time just as the rest of the MedAxiom peer database has done since its inception. By capturing these data points annually MedAxiom will also be able to provide trending data in the years ahead. The definitions behind each measure can be found in Figure 1f.

There are several interesting results worthy of attention. The single largest bucket is for “Hospital/Health System Incentive Available” at a median level of $30,000 per physician. Given the median size of the group that responded, this represents a total pool available approaching $600,000 per year. This money is in some fashion tied to performance outcomes and therefore, is at risk. When looking at its companion measure, “Hospital/Health System Incentive Earned,” we see that these performance measures had some real substance behind them and were a challenge to succeed, as the median achieved was 80 percent of the total available.

When you consider all of the compensation earned for these non-clinical “value” activities they total over $45,000 per FTE physician. This represents 8.4 percent of the median compensation for a cardiologist. The two at-risk components (Hospital/Health System Incentive Available and Non-Governmental Payor Incentive Available) total more than $40,000 per FTE, so the majority of this compensation is performance based.

These data will continue to evolve and grow in the coming years. MedAxiom encourages groups to submit data to help expedite this progression and narrow the variability.

TABLE 5a – Non-Clinical Compensation per FTE

25TH PERCENTILES 50TH PERCENTILES 75TH PERCENTILES

Leadership Positions $2,373 $6,667 $16,156

Medical Directorships $6,667 $11,869 $20,667

Call Coverage $15,833 $22,853 $34,261

Hospital/Health System Incentive Earned $11,451 $22,046 $38,608

Hospital/Health System Incentive Available $22,046 $30,000 $56,917

Non-Governmental Payor Incentives Earned $268 $419 $11,381

Non-Governmental Payor Incentives Available $7,722 $10,250 $31,826

Total Non-Clinical Compensation Earned $13,703 $45,457 $69,884

©MedAxiom

SURVEY RESULTS – NON-CLINICAL COMPENSATION

Non-Clinical compensation now accounts for 8.4% of median cardiology compensation.


APPs AND CARE TEAMS

6. Delivering High Quality, Low Cost Care:The Growing Role of Advanced Practice Providers and Care Teams

This isn’t a new story, but it bears repeating: America can’t afford the healthcare system it currently has. Despite all our best efforts, including passage—and Supreme Court confirmation—of the Affordable Care Act, healthcare costs continue to eat more and more of our gross domestic product (see Figure 6a). We’ve slowed the pace of this growth, but the healthcare inflation rate is still far outpacing the economy as a whole and certainly American’s income growth. If left unchecked, healthcare expenditures will put the US at a severe disadvantage in a global market.

To put this spending into context, the Organisation for Economic Co-operation and Development (OECD) finds that the US spends 2-1/2 times more on healthcare than the average of the rest of the world (Figure 6b) and ranks number one in the world on total spending. Yet despite all of this expense, the World Health Organization ranks the US at number 37 in the world in terms of serving the entire country’s population. Put bluntly, we’re not getting much bang for our mega bucks!

17.2% 17.6%

18.1%

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19.5%

2012 2015 2019 2023

FIGURE 6a – Healthcare as Percentage of GDP

FIGURE 6b – US Spends Two-and-a-Half Times the OECD Average

By Joel Sauer and Ginger Biesbrock, PA-C,Vice Presidents, MedAxiom Consulting


APPs AND CARE TEAMS

Part of the problem can be found in wide variations in spending nationally, regionally and even locally. Because Medicare is now making claims data—both on the hospital and physician sides—publically available, these variations for Medicare patients are being revealed by organizations like Dartmouth Atlas and others. What the data show is that there is nearly no correlation between cost and outcomes. Put another way, the US often spends healthcare dollars needlessly—this has to change.

The Cardiovascular Patient Population is GrowingBeginning in 2008 a perfect storm of negative stimuli hit the cardiovascular segment of healthcare all at once and from multiple fronts: the economy went off the rails, Appropriate Use Criteria began entering the testing world and narrowing the “appropriate” category, employers shifted more and more costs over to patient out-of-pocket expenses, Medicare dramatically cut reimbursement for nuclear and echo testing and cardiology groups started to sell to hospitals and health systems in a big way. All of this produced major downward trends in volumes as shown in Figure 6c. These trends were so severe that many were (and perhaps still are) predicting major oversupply in the number of cardiologists.

A couple data points suggest, however, that these trends may be short lived. First, America is getting older. According to the US Census Bureau, 10,000 Americans turn 65 every single day. Absent any changes to the age eligibility, these aging Baby Boomers will add 31.5 million new seniors to Medicare by 2030. America is also still getting fatter. According to the OECD, the combined overweight and obesity rate in the US could hit 75 percent by 2030 (Figure 6d). This has and is leading to an increase in chronic disease rates, with heart and cancer leading the way (number 1 and 2 causes of death in the US). Add to these numbers general growth in the population, the impact of newly insured through the Affordable Care Act and an aging cardiology population (Figure 6e) and there will undoubtedly be some volume pressures for providers.

5.1% 4.7% 4.5% 4.2% 4.4% 3.9% 3.9%

0%

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8%

2008 2009 2010 2011 2012 2013 2014

FIGURE 6c – Cath Percentage to Total E&M Encounters

FIGURE 6d – Trends in Prevalence of Overweight (Including Obesity) Adults, Projections and Recent Estimates, Selected OECD Countries


APPs AND CARE TEAMS

Unknown PopulationThere’s one more group of patients that, to date, haven’t been part of the equation. These are patients with chronic conditions that have not yet had an acute episode. As Medicare and other payors move to population health, this group may have a tremendous impact on cardiovascular providers. In our current system, we won’t find out about this population until they have some problem that brings them into the office or hospital. However, under population health where we’re trying to avoid these acute episodes entirely, we may reach into this group. And since several of the most costly chronic conditions are within the cardiovascular realm, this population will impact our world.

Right now several readers are thinking, “But chronic disease management should be handled by primary care.” In an ideal world this is true. Unfortunately, projections on primary care availability in the US all come to the same conclusion: we won’t have enough. The Association of American Medical Colleges, based on study performed by IHS, Inc., is projecting a primary care shortage of between 12,500 – 31,100 providers by 20251. The bottom line is there simply won’t be the resources in primary care to manage the chronic disease population.

This could be a huge opportunity for cardiovascular programs. However, given the cost problem detailed above, we can’t simply extend care of physician providers costing north of $500,000 per year. We need to find a new model that leverages much lower cost resources efficiently and effectively. This is where Advanced Practice Providers (APPs) are an ideal fit!

Team-Based CareAPPs have been assisting in patient care since the 1970s, but as we look to transform the care that we need to provide, it is time that we relook at APPs and their roles in how we take care of patients. A recent editorial described the use of APPS as a ‘practice innovation’ that will provide more services in a new way. Another recent article from the Carle Clinic notes that high performing organizations promote a more collaborative role than a functional area of

FIGURE 6e – Aging Cardiology Workforce

CARDIOLOGY AGE QUARTILES OVERALL 2014 BY SUBSPECIALTY 2012 2013 2014 EP INVASIVE GENERAL INT

Age 46 and below 31% 28% 30% 40% 28% 28% 27%

Age 47-58 41% 40% 39% 42% 38% 33% 40%

Age 59-70 25% 28% 27% 17% 32% 31% 31%

Age 71 and over 3% 4% 4% 1% 2% 8% 2%

100% 100% 100% 100% 100% 100% 100%

disease, stroke, type 2 diabetes and certain types of cancer, and are some of the leading causes of preventable death

million people—had one or more chronic health conditions. One of four adults had two or more chronic health conditions.

were chronic diseases. Two of these chronic diseases—heart disease and cancer—together accounted for nearly 48% of all deaths.


APPs AND CARE TEAMS

responsibility.2 We describe this newer model as ‘Team-Based Care’. Team-Based Care requires a challenging transformation from the traditional doctor-with-helpers model to a new model in which all team members share responsibility to care for the team’s patient population.

Advanced Practice Providers are made up of Physician Assistants, Nurse Practitioners, and Pharmacists. A ruling by CMS in 2012 allow all three to be considered part of Medical Staff and granted them the power to perform duties that they are trained for and allowed to do within their scope of practice and state law. The objective per CMS was to free up physicians to work on more medically complex patients. As we look to transform cardiovascular care, the APP will play an invaluable role. There are several key areas in which APPs can contribute including patient panel (Figure 6f) support, acute care support, and ‘special populations.’

Role in Prevention & EducationPart of our journey to population management is to better understand our patient populations. In the world of cardiovascular medicine, much of our care centers on secondary prevention and risk factor modification. We see thousands of patients routinely each year to review risk factors, medications and provide education. This is a perfect role for a team-based model in which a physician and APPs manage a large group of patients providing routine, surveillance care.

The addition of APP support to a physician and his/her patient panel would allow for significant expansion of that patient panel size. An ‘every other’ model with a strong team-based message to the patient can create confidence in the provider team and the model knowing that the objective is to increase physician access for when the patient’s needs change and higher level decision making is required. A sample scheduling template can be found in Figure 6g, with the corresponding financial performance from such a schedule in Figure 6h.

FIGURE 6g – APP Schedule 20/30

MORNING AFTERNOON

PATIENT TYPE TIME PATIENT TYPE TIME

Established Visit (EST) 8:00 Established Visit (EST) 1:00



Urgent Clinic 9:00 Urgent Clinic 2:00

Urgent Clinic 9:30 Urgent Clinic 2:30

Established Visit (EST) 10:00 Urgent or Post Hospital Follow-Up/CHF 3:00

Established Visit (EST) 10:20 Urgent or Post Hospital Follow-Up/CHF 3:30

Established Visit (EST) 10:40

Established Visit (EST) 11:00

Patient Follow Up, Telephone, Tasking & Lunch Patient Follow-Up, Telephone Tasking

16 Appointments Per Day©MedAxiom

FIGURE 6f – Office Established Patient/Slot Ratio by Physician

PHYSICIAN TOTAL PANEL ANNUALIZED EST PATIENT/SLOT ANNUALIZED NET PHYSICIAN PATIENT/SLOT PATIENTS VISIT SLOTS RATION BEFORE APP SLOTS PATIENT VOLUME RATION AFTER APP ADJ. APP ADJ.

A 2000 1200 1.67 pts/slot 800 0 1 patient/slot

B 2000 800 2.5 pts/slot 800 (400) 1.25 pts/slot

C 2000 1500 1.3 pts/slot 800 300 0.87 pts/slot

©MedAxiom


APPs AND CARE TEAMS

A second area in which APPs are valuable is in the acute care setting. The addition of an APP to provide hospital rounding, admission and consult support can increase the capacity of a physician to allow for testing interpretations, procedures and for seeing additional new patients. A strong APP added to a rounding team will improve access, patient throughput, and outcomes, all leading to higher quality acute care services at a lower cost. A successful acute care model has been described as having a group of fellows that just keep getting better but never leave. The financial performance from an inpatient rounding service provided by APPs can be found in Figure 6i.

ANNUALIZED THE QUANTITIES IN FORECAST 48 WEEKS

5 Days/Week

99213 45% 15 Encounters/Day

99214 50%

99215 5%

DIRECT BILLING NP VISITS

CPT CODE BILLABLE VISITS PER YEAR MEDICARE REIM RATE ANNUAL REV

99213 1620 73.08 $118,389.60

99214 1800 107.83 $194,094.00

99215 180 144.37 $ 25,986.60

Grand Total 3,600

80% Inc. To $270,776.16

20% APP NPI $57,539.93

$328,316.09

Figure 6h – Annualized: Outpatient Clinic Model

$338,470.20 (Forecast Total)

©MedAxiom

FIGURE 6i – Annualized Assumption: Inpatient Rounding Model

$209,951.04(Forecast Total)

ANNUALIZED THE QUANTITIES IN FORECAST 48 WEEKS

5 Days/Week

Subsequent Level 2 15 15 Encounters/Day

Admission 2 3

Discharge 8 2

DIRECT BILLING NP VISITS

CPT CODE BILLABLE VISITS PER YEAR MEDICARE REIM RATE ANNUAL REV

99232 3,600 72.36 *.5 $130,248.00

99222 720 138.63 *.5 $ 49,906.80

99238 480 73.03 **.85 $ 29,796.24

Grand Total 4,800

* Shared visit ** Billed under the APPs NPI©MedAxiom


APPs AND CARE TEAMS

Innovative APP Role for Care Coordination & Care TransitionsThe first two areas described are the ‘bread and butter’ of CV care, but where we are seeing the greatest impact of a team-based approach is with our high-risk patients during times of transition, long-term chronic care, and higher acuity procedural programs such as TAVR or VAD. All three of these patient populations require high levels of care coordination due to their complexities and comorbidities.

A transitional plan that includes early follow-up in the clinic or even at home by an APP has proven to reduce readmission rates and improve long-term outcomes.3 Likewise, a chronic disease clinic using a team-based approach has been proven to lower costs of these patients.4 A sample scheduling template for a heart failure clinic can be found in Figure 6j, with the corresponding cost of care reductions calculated in Figure 6k . Finally, a TAVR, VAD or CTO program that utilizes an APP to increase capacity by providing consult, peri-procedural, and post-procedural support will improve downstream revenue with increased patient volumes.

Physicians want to provide excellent care across the entire spectrum. However, this is nearly impossible in a single physician model where they have to manage the disease, manage the treatment of the disease, and manage the comorbidities that contribute to the disease. This is where the introduction of the ‘team’ can be a game changer. As we continue to strive toward high value in our healthcare system, the team-based approach will be one of the keys. However it is not just about adding an APP to your medical staff. For success we must start with a defined team and purpose that has a shared vision, principle and goals—and aligned incentives.

FIGURE 6j – Sample Heart Failure Clinic Schedule

PROVIDER 1 LCSW PROVIDER 2

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Est Patient

Team Huddle Team Huddle Team Huddle

Est Patient

New Patient A

New Patient A

New Patient B

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New Patient D

New Patient E

New Patient C

New Patient E

Est Patient

Est Patient

Est Patient

Est Patient

Est Patient

Est Patient

Est Patient A

New Patient B

New Patient D

FIGURE 6k – Physician vs APP Cost Comparison in a Specialty Clinic

E/M REIMBURSEMENT TOTAL NET

992014 *2 166.22 332.44 *.85

99214 *4 107.83 431.32

99213 *2 73.08 146.16

Revenue 860.05

COST - APP $65/hr *4 (260.00) $600.05

COST – PHYSICIAN $250/HR *4 (1000.00) $(90.08)

©MedAxiom

©MedAxiom


APPs AND CARE TEAMS

Creating an Environment of Aligned EconomicsSimply adding APPs to the organization will not guarantee added patient volumes, work RVUs and panel size. All too often our physician compensation plans—whether the funding mechanism in an integrated (employed) model or the internal distribution architecture in a private model or both—create a perverse competition between the APPs and the doctors. When this is the case, we can predict with relative certainty that the APPs will be underutilized, if not downright ignored.

Take for example a work RVU based funding model in an employed setting. Many employment contracts in such a model state that physicians will receive credit only for work RVUs “personally performed.” In other words, they will receive no credit for work performed by an APP. Experience shows that in this environment, physicians will gravitate to utilizing APPs in a supporting role, or to “tee up” patients to shorten the physician’s time in the room, and then billing entirely under the physician’s provider number. Although there is certainly value in this relationship, the APP role could be adequately filled by a well-trained nurse at a much lower cost to the organization.

Likewise in a private setting where the internal distribution formula includes a significant production component, measured by work RVUs, internal competition can be created. In this model a physician may receive credit for work performed by an APP in an “incident to” arrangement, where the physician is concurrently in the office with the APP, but not if the APP were to bill under his/her own provider number. This latter scenario may often be the most efficient and effective way to utilize the APP—and provide greater patient access because there are fewer limits due to physician availability—but the compensation model will incent the physician to hang on to the patient or only schedule when “incident to” is available. Private groups with net revenue compensation plans can often create the same inefficient outcome.

A better model is where the compensation plan is agnostic to whether a physician or APP delivers the care; a work RVU is a work RVU for funding or distribution purposes. However, there has to be recognition of the significant expense associated with APPs, otherwise there is no disincentive to over hire in order to provide economic and lifestyle benefit for the physicians.

Focusing first on the funding side of an integrated model, a way to balance this scale is for the direct costs (salary plus fringe benefits) associated with the APP to be deducted from the physician compensation pool. Figure 6l shows an example of how the calculation would work. This model encourages efficient and prudent deployment of APPs since the cost is born out of physician compensation.

There are several important caveats to the model described above. First, it presumes that the compensation funding model creates a group pool, as opposed to the funding being at the individual physician level (MedAxiom believes strongly in the value of the pool vs. the individual, but that’s for another article). Second, the method used to distribute the pool must meet all legal, regulatory and compliance requirements. Third and very importantly, the APPs must not directly provide any Designated Health Services (DHS) under the Stark Laws.

FIGURE 6l – APP Compensation Deduction from Physician Comp

WRVUS

PROVIDER PERSONAL INCIDENT TO TOTAL

Physician 1 8,500 - 8,500

Physician 2 9,400 - 9,400

APP 1 2,800 2,200 5,000

APP 2 1,500 3,100 4,600

Totals 22,200 5,300 27,500

wRVU Conversion Factor $50.00

Total wRVU Contribution to Pool $1,375,000

APP Direct Cost Deduction

APP 1 Salary + Bonuses $115,000

APP 2 Salary + Bonuses $111,000

Total APP Salary + Bonuses $226,000

Fringe Benefits at 31% $70,060

Total APP Direct Costs $296,060

Net Total Compensation Pool $1,078,940

©MedAxiom


APPs AND CARE TEAMS

Looking now at the private group setting, the mechanics on the production side are largely the same. In groups that espouse distribution formulas with a productivity component, in order to avoid internal competition between the physicians and APPs, the production measure cannot have a bias in favor of the physician. For instance, if the production measure is work RVUs, but no credit is provided when an APP sees a patient independently, there is malalignment. Many private groups also utilize a net revenue model where effectively each physician is his/her own Profit & Loss Statement. In this environment APPs tend to be “cleaved to the hip” of a lone and specific physician, which promotes underutilization when vacations don’t sync up or if the physician’s patient panel isn’t large enough to maximize the APP’s schedule.

ConclusionHealthcare is in an era of unprecedented change and there are myriad unknowns as organizations attempt to plan for the future. What is clear is that we must bring down the cost of providing care—even as our patient population may be increasing. To do this we must look at strategies to expand the capacities of our most expensive human resource, the physician.

At 20–30 percent of the cost of a cardiologist, APPs provide a tremendous opportunity to increase a program’s patient volumes and, if done right, provide a better overall product particularly in the areas of care coordination and care transitions. In order to achieve this, attention must be paid to establishing a clear vision of the organization’s goals, a clear definition of the care team with identified roles and responsibilities, and a financial model that fosters, not hinders, effective and efficient utilization of resources.

With all this in place, healthcare can truly be transformed.

1 Source: The Complexities of Physician Supply and Demand: Projections from 2013 to 2015

Prepared for: Association of American Medical Colleges; Submitted by: IHS Inc. March 2015

2 Betbeze, Philip. “How to Get the Most Out of Team-Based Care.” Health Leaders (2013). Web. 23 July 2015

3 Sochalski, Julie, Tiiny Harfan, Harlan Krumholz, Ann Laramee, and John McMurray. “What Works in Chronic Care Management: The Case of Heart

Failure.” Health Affairs 28.1 (2009). Web. 23 July 2015.

4 McAlister, F, S Stewart, S Ferma, and J McMurray. “Multidisciplinary strategies for the management of heart failure patients at high risk for

admission: a systematic review of randomized trials.” Journal of American College of Cardiology 22.2 (2004): 810-19. Web. 23 July 2015.

At 20-30% of the cost of a cardiologist, APPs provide a tremendous opportunity to increase a program’s patient volumes and, if done right, provide a better overall product.

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00

MEDAXIOM CARDIOVASCULAR PROVIDER COMPENSATION & PRODUCTION SURVEY – 2015 37TAB

LE 2

: PH

YSI

CIA

N P

RO

DU

CTI

VIT

Y

20

12

2013

20

14

N

25

%

50%

75

%

90%

N

25

%

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75

%

90%

N

25

%

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75

%

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3-4-

0100

Wor

k RV

Us

per

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diol

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t 1,

640

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SUR

GER

Y T

AB

LES

TAB

LE 1

: PH

YSI

CIA

N C

OM

PEN

SATI

ON

20

13

2014

N

25

%

50%

75

%

90%

N

25

%

50%

75

%

90%

3-1-

0100

Act

ual C

ompe

nsat

ion

per

Surg

eon

86

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22

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3 $4

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61

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00

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57,3

49

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ners

hip

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el

Priv

ate

23

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83

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23,0

86

18

$309

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$4

34,5

46

$535

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$6

29,7

19

Car

diac

20

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52,5

14

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$4

84,5

64

$536

,700

15

$3

09,4

98

$434

,546

$5

35,2

89

$627

,698

Vasc

ular

**

**

**

**

**

**

**

**

**

**

In

tegr

ated

63

$5

25,0

00

$663

,024

$8

10,4

10

$1,1

90,7

91

95

$500

,000

$5

92,8

04

$809

,814

$1

,187

,854

Car

diac

32

$6

64,3

82

$790

,532

$1

,167

,515

$1

,387

,607

70

$5

09,7

24

$594

,835

$8

29,7

32

$1,2

01,9

70

Vasc

ular

31

$4

61,5

15

$573

,974

$6

63,0

24

$731

,237

25

$4

52,6

64

$576

,563

$6

62,1

54

$711

,000

Geo

grap

hic

Bre

akdo

wn

Nor

thea

st

**

**

**

**

**

**

**

**

**

**

So

uth

37

$428

,811

$5

74,0

22

$1,0

26,7

06

$1,3

58,7

98

56

$406

,973

$5

76,5

63

$849

,115

$1

,291

,457

M

idw

est

41

$500

,000

$5

78,8

98

$733

,744

$8

12,0

34

39

$535

,289

$5

87,0

19

$762

,500

$8

36,6

72

W

est

**

**

**

**

**

**

**

**

**

**

Ove

rall

C

ardi

ac

52

$451

,019

$6

17,6

11

$833

,885

$1

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85

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50,5

63

$584

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$8

11,2

92

$1,1

90,1

37

Va

scul

ar

34

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$5

66,5

16

$636

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$8

01,3

29

28

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,730

$5

70,3

45

$629

,719

$7

11,0

00

3-1-

0400

Indi

vidu

al S

urge

on S

alar

ies

(no

bene

fits)

per

Wor

k RV

U90

$4

5.00

$5

5.00

$7

5.00

$9

4.00

11

1 $4

2.38

$5

5.31

$7

2.53

$9

4.96

Ow

ners

hip

Mod

el

Priv

ate

23

$29.

00

$36.

00

$83.

00

$61.

00

18

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81

$39.

83

$47.

19

$59.

85

Car

diac

20

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2.00

$4

3.00

$6

2.00

$8

8.00

15

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0.81

$4

0.21

$4

7.19

$5

8.65

Vasc

ular

**

**

**

**

**

**

**

**

**

**

In

tegr

ated

67

$5

2.00

$5

8.00

$7

6.00

$1

01.0

0 93

$4

8.27

$5

9.69

$7

5.80

$9

8.64

Car

diac

35

$5

5.00

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0.00

$8

7.00

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42.0

0 69

$4

8.07

$6

2.87

$7

7.54

$9

9.36

Vasc

ular

20

$3

2.00

$4

3.00

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2.00

$8

8.00

24

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$5

4.82

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8.66

$7

5.83

Geo

grap

hic

Bre

akdo

wn

Nor

thea

st

**

**

**

**

**

**

**

**

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uth

37

$46.

00

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00

$70.

00

$93.

00

55

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15

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16

$76.

91

$98.

64

M

idw

est

45

$48.

00

$55.

00

$77.

00

$101

.00

38

$38.

13

$48.

27

$66.

23

$75.

83

W

est

**

**

**

**

**

**

**

**

**

**

Ove

rall

C

ardi

ac

52

$48.

00

$61.

00

$81.

00

$101

.00

84

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98

$57.

44

$72.

53

$98.

3

Va

scul

ar

34

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00

$53.

00

$64.

00

$77.

00

27

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95

$54.

82

$71.

03

$87.

30


SUR

GER

Y T

AB

LES

TAB

LE 2

: PH

YSI

CIA

N P

RO

DU

CTI

VIT

Y

20

13

2014

N

25

%

50%

75

%

90%

N

25

%

50%

75

%

90%

3-4-

0100

Wor

k RV

Us

per

Surg

eon

101

8,52

7 10

,971

14

,094

17

,613

11

2 7,

947

10,7

03

14,6

34

20,1

52

Ow

ners

hip

Mod

el

Priv

ate

23

5,44

6 11

,487

14

,525

15

,840

19

7,

947

11,3

70

15,0

18

16,3

29

Car

diac

20

5,

845

11,4

87

13,0

08

15,4

06

15

9,31

9 11

,370

13

,890

15

,610

Vasc

ular

**

**

**

**

**

**

**

**

**

**

In

tegr

ated

78

9,

054

10,9

71

13,5

72

19,0

01

93

8,07

2 10

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14

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20

,660

Car

diac

43

9,

054

11,3

17

15,7

27

21,0

61

70

8,23

0 11

,837

15

,275

21

,586

Vasc

ular

35

8,

527

10,6

57

11,4

19

15,1

13

23

7,46

4 9,

085

10,5

82

12,4

87

Geo

grap

hic

Bre

akdo

wn

Nor

thea

st

**

**

**

**

**

14

3,37

4 8,

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34

2066

0.13

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uth

46

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2 11

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14

,252

21

,061

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330

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53

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00

2001

3.64

M

idw

est

47

7,87

1 10

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12

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16

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38

9,

096

11,9

15

15,6

10

2194

5.45

W

est

**

**

**

**

**

**

**

**

**

**

Ove

rall

Car

diac

63

8,

481

11,3

17

14,5

25

18,2

56

85

8,47

9 11

,653

15

,083

20

,660

Va

scul

ar

38

8,52

7 10

,889

11

,833

17

,613

27

7,

330

9,08

5 11

,678

18

,445

NO

N-C

LIN

ICA

L TA

BLE

S

Com

pens

atio

n pe

r FT

E 25

th

50t

h

75t

h

Med

ian

FTEs

T

otal

Com

p pe

r G

roup

Lead

ersh

ip P

osit

ions

$

2,37

3

$6,

667

$

16,1

56

19.

70

$13

1,34

0

Med

ical

Dire

ctor

ship

s $

6,66

7

$11

,869

$

20,6

67

19.

70

$23

3,81

9

Cal

l Cov

erag

e $

15,8

33

$22

,853

$

34,2

61

19.

70

$45

0,20

4

Hos

pita

l/H

ealt

h Sy

stem

Ince

ntiv

e Ea

rned

$

11,4

51

$22

,046

$

38,6

08

19.

70

$43

4,30

6

Hos

pita

l/H

ealt

h Sy

stem

Ince

ntiv

e A

vaila

ble

$22

,046

$

30,0

00

$56

,917

1

9.70

$

591,

000

Non

-Gov

ernm

enta

l Pay

or I

ncen

tive

s Ea

rned

$

268

$

419

$

11,3

81

19.

70

$8,

254

Non

-Gov

ernm

enta

l Pay

or I

ncen

tive

s A

vaila

ble

$7,

722

$

10,2

50

$31

,826

1

9.70

$

201,

925

Tota

l Non

-Clin

ical

Com

pens

atio

n Ea

rned

$

13,7

03

$45

,457

$

69,8

84

19.

70

$89

5,50

3

Perc

enta

ge o

f N

on-C

linic

al t

o To

tal C

omp

Earn

ed

2.0%

8.

0%

13.0

%


APP

s

TAB

LE 1

: A

PP C

OM

PEN

SATI

ON

20

14

N

25

%

50%

75

%

90%

3-1-

0500

Act

ual C

ompe

nsat

ion

per

APP

93

6 $7

1,46

5 $9

1,69

0 $1

04,8

99

$121

,451

Ow

ners

hip

Mod

el

Priv

ate

240

$67,

669

$93,

556

$110

,000

$1

27,5

91

In

tegr

ated

69

6 $7

2,70

3 $9

1,37

5 $1

03,4

75

$118

,450

Geo

grap

hic

Bre

akdo

wn

Nor

thea

st

163

$56,

416

$89,

086

$102

,074

$1

19,1

53

So

uth

519

$74,

877

$91,

134

$104

,014

$1

20,9

52

M

idw

est

154

$68,

138

$91,

675

$105

,000

$1

21,4

37

W

est

100

$75,

643

$99,

840

$114

,504

$1

26,3

40

TAB

LE 2

: A

PP P

RO

DU

CTI

VIT

Y

20

14

N

25

%

50%

75

%

90%

3-4-

0100

Wor

k RV

Us

per

APP

997

91

414

1,40

9 2,

537

Ow

ners

hip

Mod

el

Priv

ate

195

147

803

2,14

8 3,

442

In

tegr

ated

80

2 83

36

4 1,

205

2,23

1

Geo

grap

hic

Bre

akdo

wn

Nor

thea

st

213

83

308

987

1,75

5

So

uth

477

58

253

1,16

7 2,

712

M

idw

est

219

239

814

1,79

8 2,

787

W

est

88

533

1,21

1 2,

092

3,40

9

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REPORT: 2015 Cardiovascular Provider · PDF file2015 Cardiovascular Provider Compensation and Production Survey ... per cardiologist Most of this gain is attributable to a signiÞcant