The CFA Perspective

Could New TAVR Volume Criteria Open the Competitive Floodgate?

Posted by John W. Meyer, LFACHE, and Charles W. Franc

8/9/18 6:48 AM


Edwards_TAVR_Image-1-283574-edited-1Two recent developments are important for those hospitals monitoring Transcatheter Aortic Valve Replacement (TAVR) developments.  First, on July 25, 2018 CMS held a meeting of its Medicare Evidence Development and Coverage Advisory Committee (MEDCAC) to discuss procedural volume requirements for TAVR, Percutaneous Coronary Interventions (PCI) and other relevant structural heart disease procedures.[1]  Second, prior to the CMS meeting on July 18, 2018, JACC released for pre-publication 2018 AATS/ACC/SCAI/STS Expert Consensus Systems of Care Document: Operator and Institutional Recommendations and Requirements for Transcatheter Aortic Valve Replacement.  While both the MEDCAC meeting and the AATS/ACC/SCAI/STS consensus recommendations focused on requirements for new programs and continued certification of existing programs, we would like to focus specifically on issues facing new programs. 

Could this be the start of reducing, minimum volume requirements for TAVR reimbursement under Medicare?  If that were to happen, how many lower volume (i.e., less than 50 Aortic Valve Replacements per year) cardiac valve surgery programs would enter this market?  Although speculative at best, this prospect does initiate an interesting discussion of the pros and cons of entering a growing market and attempting to capture lost referrals for hospitals currently operating what CMS has defined by regulation as “low-volume” valve surgery programs. 

Current Required Criteria to Provide TAVR and Receive Reimbursement from CMS 

Medicare’s 2012 national coverage decision lists the following criteria to establish a new TAVR program: 

  • At least 50 aortic valve replacements (AVRs) in the year before a TAVR program is launched; including at least 10 AVRs in “high-risk patients.”
  • 1,000 catheterization procedures per year, including at least 400 PCIs per year, to start and maintain a program.
  • At least two physicians with cardiac surgery capabilities, including one who has performed at least 100 career AVRs, 25 AVRs in one year, or 50 AVRs in two years.
  • An interventional cardiologist who has performed at least 100 structural heart disease procedures overall or 30 left-sided structural procedures per year.
  • Once a program is started, an interventional cardiologist and a surgeon must perform a combined 20 TAVRs in a single year or 40 over a two-year span to continue the program.
  • All participants must submit data to the Society of Thoracic Surgeons/American College of Cardiology Transcatheter Valve Therapy Registry™ (TVT Registry). 

As of 2015, 400+ U.S. hospitals performed 54,782 TAVR procedures according to the Annual Report of the TVT Registry.[2]  The new expert consensus document states that there are more than 580 active TAVR/SAVR sites with over 100,000 TAVR procedures in the TVT Registry.  During 2016, the total number of TAVR and surgical AVRs were about equal.  It is predicted that eventually, TAVR will far exceed SAVR volume.

 Newly Proposed TAVR Requirements from the Consensus Document[3]

 As stated above, JACC recently released a pre-publication version of 2018 AATS/ACC/SCAI/STS Expert Consensus Systems of Care Document: Operator and Institutional Recommendations and Requirements for Transcatheter Aortic Valve Replacement.  This new consensus document provides detailed recommendations for institutions and individuals to assess their potential for instituting and/or maintaining a high quality TAVR program (the first update since 2012) and reflects the current evolution in practice and quality benchmarks.  At this stage these are multi-societal consensus recommendations and not accepted CMS requirements.

 Of particular note are two findings:

  •  In 2017, 204 of 525 TAVR sites (38.9%) performed less than the recommended 50 TAVR’s/year; and
  • The Duke Clinical Research Institute has performed a preliminary analysis of the most recent STS-ACC TVT Registry data that shows a clinically meaningful association of higher mortality and other major complications with site annual volume below the recommended threshold of 50 procedures/year.

 In addition, these recommended changes were made to the current recommendations for new programs:

  • At least 40 (down from 50) aortic valve replacements in the year before a TAVR program is launched…
  • At least 300 PCIs (down from 1,000 cardiac caths and 400 PCI’s) in the previous year …
  • Evaluation by one surgeon (down from two surgeons) – although documentation must include both a surgeon and a cardiologist.

 The Natural Progression of Technology

 The roll-out of TAVR technology and its application to an increasingly higher-risk target population has been logical and conservative, following the general path that other new technologies have historically taken.  This is logically demonstrated in the new AATS/ACC/SCAI/STS consensus documents and its focus on clinical outcomes and performance improvement.  We all remember when PCI was introduced in 1977 and how the device evolution (e.g., balloon, bare-metal stent, drug-eluting stent, dissolving stent), patient appropriateness criteria and technological advances evolved to where it is the common go-to procedure today.  While there are ACC/AHA guidelines, and in some states, guideline-derived licensing/certification requirements for operator/provider minimum volumes, both individual operators work load requirements and clinical outcomes for PCI are not the issues they once were.

 TAVR seems to be following a similar evolutionary and somewhat predictable path.  Within this natural evolutionary process, there are always logical concerns of balancing operator skills; minimum proficiency volumes; patient access and selection, appropriateness and risk assessment; clinical and life-style outcomes, and the technological evolution of the procedure, equipment and devices being utilized.  Information from the TVT Registry documents clinical and quality-of-life outcomes from TAVR continue to improve over time[4].  If the past is prologue to the future, then TAVR criteria will also eventually be modified, and perhaps inevitably reclassified from “mandatory” to “recommended” status.  This could change the market for TAVR providers.  The one unanswerable question involves timing – just how long will it take for new guidelines/recommendations to generate new Medicare reimbursement determinations and state-sponsored regulations?

 TAVR in Low-Volume Hospitals

 If and when TAVR reimbursement criteria is modified, what impact will it have on the number of TAVR providers?  Will some procedural volume shift from specialty center to lower volume hospital programs?  Is this a positive development?  Hospitals that cannot meet the stringent 2012-issued criteria have inevitably lost perhaps fifty percent of their AVR procedures to competitor programs with higher volumes.  Some lower volume programs may be able to meet new criteria, fundamentally redistributing overall TAVR volume (and the generally adverse financial consequences) between the 500+ providers now in the market across a greater number of providers.  Will the average volume (both TAVR and SAVR) per provider decrease?  Unless or until patient selection criteria evolves to include a higher percentage of TAVR candidates (beyond current low and intermediate risk patients), then the size of the market will stay relatively stable and some existing programs will lose volume to low-volume providers entering the market.

 Complicating this discussion are research findings based on the TVT Registry that TAVR is associated with better outcomes in high-volume centers.  According to Dr. John D. Carroll, “The volume-outcome relationship for TAVR is both statistically significant and clinically important.”[5]  CFA believes the interplay between volume standards, operator skill/proficiency and case acuity stratification are major drivers of outcomes.  This is, as was the case with low-volume cardiovascular surgery program (LVCSP) outcomes, a multi-factorial issue which requires greater assessment.  Today, the clearly documented position in the cardiovascular literature is that cardiac surgery, in the hands of a skilled cardiac surgeon operating in a low volume setting, is as efficacious as those procedures done at larger centers.[6]

 Further complicating the discussion was the debate within the MEDCAC meeting, which appeared to be split on the issue of whether procedural volume requirements should be required to begin and maintain TAVR programs.[7] 

 The Implications of Low-Volume TAVR

 If current reimbursement were to improve and/or licensure criteria were to be relaxed, any hospital contemplating entering the TAVR market on a low-volume basis should think long and hard before deciding.  Optimizing TAVR programs specifically, and valve programs in general, has been challenging even in high-volume situations.  While TAVR reimbursement changed for the better in FY 2015 with dedicated unique MS-DRGs, the cost associated with this procedure typically outstrips the reimbursement.

 In a value-driven world, with an increasing focus on episodes of care, this situation is problematic with infrastructure, overhead, and high device costs.  If your hospital is losing valve surgery cases, and especially TAVR cases, to higher-volume competitors, entering this market may be a viable alternative.  However, there are significant barriers to entry and continuing challenges to going-forward operations and financial viability that make this decision a complex and potentially costly one.  Even now, some hospitals have opted not to pursue TAVR business and have successfully optimized their valve programs by providing expert pre-procedural diagnosis and follow-up for TAVR patients while still referring the patient for the procedure to a center of choice.  CFA will follow CMS’s reconsideration of volume criteria very carefully.  However, a new National Coverage Determination isn’t expected until June 2019. 

 If you are interested in learning more about low-volume cardiac surgery program strategies, please download our updated and expanded whitepaper (see Low-Volume Cardiac Surgery Programs – Grow, Consolidate or Divest:  Self-Preservation Strategies and Excellence Expectations, our newly expanded and updated White Paper).  If you are interested in cardiac services strategic development, service expansion and/or other programmatic needs for cardiovascular or other services, please contact CFA at (949) 443-4005 or by e-mail at  

 New Call-to-action 

[1] CMS to reconsider TAVR volume requirements, Cardiology Business, accessed online July 02, 2018.

[2] Grover, et al; 2016 Annual Report of the Society of Thoracic Surgeons/American College of Cardiology Transcatheter Valve Therapy Registry, Journal of the American College of Cardiology, December 2016.

[3] Bavaria JE, Tommaso CL, Brindis RG, Carroll JD, Deeb GM, Feldman TE, Gleason TG, Horlick EM, Kavinsky CJ, Kumbhani DJ, Miller DC, Seals AA, Shahian DM, Shemin RJ, Sundt III TM, Thourani VH, 2018 AATS/ACC/SCAI/STS Expert Consensus Systems of Care Document:

Operator and Institutional Recommendations and Requirements for Transcatheter Aortic Valve Replacement, Journal of the American College of Cardiology (2018), doi: 10.1016/j.jacc.2018.07.002.

[4] Grover, F. L., and Holmes, D. R., New Insights from the STS/ACC TVT Registry, Cardiac Interventions Today, Vol. 11, No. 2 March/April 2017.

[5] Carroll JD, et al.  Joint ACC/TCT Late-Breaking Clinical Trials.  Presented at:  American College of Cardiology Scientific Session, April 2-4, 2016; Chicago, IL.

[6] The Society of Thoracic Surgeons Adult Cardiac Surgery Database: 2018 Update on Outcomes and Quality


The Importance of Effective Hospital-Physician Negotiation - Part Two

Posted by Peter J. Spiers, Ph.D.

7/25/18 7:00 AM

Negotiation blog image 6-6-18In Part One of this blog we stressed the value of cardiovascular physicians acquiring or updating proven and effective business negotiation skill sets.  The premise for this notion was driven, in part, by the improved economic environment and the move by many health systems to use improving capital positions to expand or develop new cardiovascular services.  Physicians should want to participate in this enhanced financial environment to the extent that they can negotiate an improved business relationship.

In Part Two we will: 

  1. Present a CFA case study highlighting the process and outcome(s) of a re-negotiated comprehensive professional service agreement between a Southern California health system and its long standing cardiothoracic surgery group. 
  1. Explore the changing CMS regulatory landscape, which may present new opportunities for cardiovascular physicians to enter into expanded joint venture opportunities, or wholly owned cardiovascular multi-specialty services organizations. 

CFA Case Study: Creating New Value in an Existing Professional Services Agreement 

A few years ago, CFA was retained by a well-respected, high quality cardiothoracic surgery group (CTSG) to provide strategic business development and executive practice management services.  During our engagement, one of the CTSG partner hospitals desired to re-negotiate the existing comprehensive professional services agreement (CPSA) with the group.  A formal Request For Proposal (RFP) process was used by the health system to guide the negotiation process.  CFA used the RFP process to not only quantify the value the group brought to the hospital system but introduced a set of shared risk/reward provisions, increased coverage and program development incentives to best match the unique marketplace dynamics and needs associated with the target hospital.  These factors had never been considered in any level of detail in previous agreement negotiations.  After submission of the RFP and a series of face-to-face negotiations between CFA and the target hospital, the revised and updated contract was fully executed.  The net effect being that under the new PSA the CTSG would realize a net increase in regulatory complaint compensation of more than $1.5M over the 3-year term of the contract. 

CFA believes that many cardiovascular physician(s) and/or groups leave significant value on the table when negotiating with their hospital partners.  This is frequently because they do not include all available factors that produce potential benefit to the hospital (and thus increase potential compensation to the group).  Most often this failure occurs through neglecting to  effectively quantify, present and leverage the real value of their services and group during hospital–physician negotiations. 

Is a Return to Physician Hospital Ownership in the Works? CMS Calling for a Change in Physician Hospital Ownership and Stark Prohibitions. 

Change seems to be in the wind at CMS regarding the physician hospital ownership and the “anti-kick back” prohibitions under the Stark rule.  This last April, the CMS began soliciting comments on what role physician-owned hospitals should take in the overall health system as well as on which regulations should be rolled back.  While it is early in the process, CFA believes the Trump Administration and HHS Secretary Alex Azar are committed to rolling back many of the ACA restrictions on free-market policies, unnecessary or arbitrary regulatory burdens on physician practice and increasing healthcare marketplace competition.  A roll-back of the Stark Anti-kick-back rules would help pave the way for greater physician healthcare services ownership. 


Parts One and Two of this blog highlighted the opportunities for cardiovascular physicians to re-shape their practice profiles and take advantage of an improving healthcare financial environment and changing regulatory landscape.  These facts on the ground reinforce the notion that physicians who know how to best leverage their practice value are those who have developed or improved business negation skill sets. 

For additional detail, see CFA’s white paper, “Six Keys to Successful Negotiation with Your Hospital.” 

As always, CFA welcomes your comments or suggestions. 


  1. Azar eyes relaxing restrictions on physician-owned hospitals.” February 2018, Modern Healthcare
  2. “Lifting restrictions on physician-owned hospitals could be key to widening access to care.” June 2017, Modern Healthcare
  3. 3. Lifting the Limits on Physician-Owned Hospitals: Can Regulators Prevail Where Legislators Have Stalled?


Low-Volume Cardiac Surgery Programs: Cardiac Valve Surgery Trends and Implications

Posted by John W. Meyer, LFACHE, and Charles W. Franc

6/28/18 7:53 AM

CFA has written extensively on the challenges facing the low-volume cardiac surgery program.  As demographic, clinical and technological factors coalesce to confront the typical program in today’s hyper-competitive marketplace, it is critical that programs evaluate not only their current operations, but their role in the evolving future.  As we have discussed in the past, cardiac surgery programs are more than CABG surgery; they can encompass cardiac valve surgery, combination procedures (e.g., Aortic Valve Replacement [AVR] plus CABG or Mitral Valve Replacement [MVR] + CABG) and the fairly rare cardiac repair such as Atrial Septal Defect (ASD) and Ventricular Septal Defect (VSD) closures in the adult population.  It is therefore logical to look at cardiac valve surgery as a growth market to be developed; however, this market is increasingly complex.  Cardiac valve surgeries in total represented only about 23% of total cardiac surgeries in CY 2016 based on data from the Society of Thoracic Surgeons (STS), and are increasingly subject to new technology, including Transcather AVR (TAVR) and soon Transcatheter MVR (TMVR).  Hospital cardiac surgery programs will therefore need to consider both their overall ability to serve valve patients and the potential impact on the volume of total cases represented.

Cardiac Valve Surgery Distribution Offers Unique Insights

imageThe included table represents the STS Adult Cardiac Surgery database totals for CY 2016, the latest available.  It’s instructive to look at the distribution of cases by specific category.  The STS database represents 95% of all cardiac surgery volume in the U.S., so is a reasonable representation of total distribution (realizing that every hospital program and market is unique). For all cardiac surgeries in the database:

  • CABG surgery – 54%
  • Total valve surgeries – 23%
  • AVR – 10% (73% of total valves)
  • MVR – 3%
  • Total combination CABG plus valve procedures – 8%
  • Aortic aneurysms – 5%
  • “Other” cardiac surgeries – 17% (see definition)

Cardiac Valve Surgery Trends and Conclusions

Based upon this distribution, here are six trends and conclusions that can be drawn directly relating to valve surgeries that need to be considered by every low volume cardiac surgery program when evaluating its options and considering its strategy for the near-term future:

  1. Overall cardiac surgery trends are not conducive to low-volume programs – CABG surgery has steadily declined while cardiac valve surgery (with higher prevalence in the aged population) has increased slightly. In select markets, valve surgeries have increased due to the availability of TAVR. Therefore, the average cardiac surgery program has lower overall volumes, with literally hundreds of programs with fewer than 150 total cases and many lower than 100 total cases (please see Can Low Volume Cardiac Surgery Programs be Excellent? and Can Low Volume Cardiac Surgery Programs be Excellent? A 2017 Update).  While there are exceptions, low volume programs generally have fewer valve surgeries as referrals tend to go to centers with higher volumes, more technical capabilities and superior outcomes.
  2. AVR represents 73% of all cardiac valve surgeries, Surgical AVR (SAVR) now significantly reduced by TAVR – The majority of valve surgeries are aortic valve repairs or replacements, which are steadily converting from open-surgical procedures to TAVR. The Partner and Partner II TAVR trials have proven the procedure viable for both low and intermediate risk patients and the 2008 ACC/AHA Guidelines recommend that TAVR be performed in all symptomatic patients with severe aortic stenosis.  Since its introduction in 2011, TAVR volumes have steadily increased at 500 U.S. hospitals.  Of note is that the STS/ACC Transcatheter Valve Therapy Registry concludes there is a direct association between TAVR volume and outcome.  Therefore, TAVR procedures are increasingly excluded from low-volume programs through vendor initiatives, Medicare regulations, and loss of referrals resulting from sub-par clinical outcomes.
  3. While only 7% of all valve surgeries are Mitral Valve surgeries, Surgical MV replacement may ultimately be reduced by TMVR – Mitral valve replacement surgery represents only 3% of the total and is characterized by higher risk, operative mortality, average length of stay and cost-per-case than AVR. Up to 4,000,000 candidates with moderate to severe symptomatic disease are eligible for the APOLLO trial for TMVR that began in late 2017 and will close in 2025.  If eventually deemed a successful therapy, this transcatheter  approach (albeit for a relatively small total volume) will further erode total valve surgery volumes.  
  4. Combination/concomitant procedures only 8% and diminishing – A significant percentage of valve patients also have CAD, making combined AVR or MVR with CABG (and/or PCI) an additional part of overall cardiac surgery volume. Concomitant valve/CABG procedure volumes have been impacted by transcatheter procedures as TAVR (and eventually presumably TMVR) are currently considered “stand alone” procedures.  Pre-procedural PCI can also be performed on some valve patients.  Ultimately, these patients are being excluded from low-volume programs on an increasing basis due to clinical complexity and higher-risk status alone.
  5. Surgical competence is critical – While all cardiac surgery requires a skilled surgeon supported by a highly competent team, valve procedures are highly specialized where valve patients are at higher risk than with other procedures. Program volumes/patient referrals and clinical outcomes are highly dependent upon individual surgical skill, mix of procedures, careful patient selection, technology available (e.g., TAVR, TMVR), overall team experience, post-op care and many other factors.  Low volume simply does not support this complex mix of critical factors.  Consequently, each local situation is unique.
  6. Implications for Low-Volume Cardiac Surgery Programs – Each cardiac surgery program is unique and therefore reflective of its hospital and cardiac physician reputation, referral pattern, market area competition and targeted population size and demographics. That being said, the success of any surgical program relies entirely on the combined abilities of its surgeons, appropriate case selection/risk evaluation and the clinical outcomes produced over time.  Additionally, general market conditions and reimbursement practices (particularly episode-of-care and quality outcome-based pricing) increasingly disadvantage low-volume providers. 

CFA was worked with a variety of hospital cardiac surgery programs in a wide set of circumstances.  Some programs do virtually no valve surgery; others do a higher proportion of valves than CABGs.  Some surgeons do AVR’s but not MVR’s; AVRs and MVRs but not many combination procedures.  This all relates, as stated above, directly to the skill of the surgeon(s).  Further complicating this situation is the development of evolving non-surgical procedures for AVR and now MVR.  When fully realized, both these procedures will seriously reduce the number of traditional surgical valve repairs/replacements in favor of transcatheter-based technologies.  Currently, this technology is, and will continue to be, concentrated at higher-volume centers that can also produce higher volumes, superior outcomes and lower cost-per-case/episode than low-volume providers could ever hope to achieve.

If you are interested in learning more about low-volume cardiac surgery programs strategies, please download our updated and expanded whitepaper (see Low-Volume Cardiac Surgery Programs:  Grow, Consolidate or Divest:  Self-Preservation Strategies and Excellence Expectations, our expanded and updated White Paper).  If you are interested in cardiac services strategic development, service expansion and/or other programmatic needs for cardiovascular or other services, please contact CFA at (949) 443-4005 or by e-mail at

 low volume cardiac surgery programs have options

Topics: low volume cardiac surgery programs

The Importance of Effective Hospital-Physician Negotiation - Part I

Posted by Peter J. Spiers

6/8/18 7:53 AM

Negotiation blog image 6-6-18

Last year CFA posted a cardiovascular physician-oriented blog entitled “6 Keys to Successful Hospital - Physician Negotiation” (  The premise of that 2017 blog was this: All physicians, including cardiovascular physicians, whether in private practice or employed, should consider becoming better skilled in the art and science of hospital negotiation.  The motivation behind crafting that blog was due, in part, to the significant growth occurring in the capital markets in late 2016 and into 2017.  Many reputable financial publications, including in the healthcare space, were documenting improved capital positions and expressing a positive outlook for improved capital formation across many business sectors including hospitals and healthcare organizations. Recent numbers continue to affirm this notion, and we believe, the environment for cardiovascular physicians to negotiate more advantageous operating positions is favorable. 

Convincing Evidence: Capital Investment on The Rise

Healthcare investment and research data demonstrates the upside value of investing in healthcare facilities is becoming more and more attractive1. In addition to the emerging, positive trends in the financial landscape, CFA has been seeing, for more than a year, an uptick in the growth and expansion of cardiac services in selected U.S. markets2.  Last year’s blog post highlighted the need for many cardiovascular physicians to improve their negotiating skills to take advantage of improving hospital and healthcare financial portfolios and best position themselves to leverage potential growth opportunities for their practices.

We believe a little more than one year later the premise of that previous blog carries even more significance today and, quite likely, into the near-term planning horizon for hospitals and physicians.  In an article posted February 27th, 2018 in the Washington Examiner, Jessica Goldstone, a senior VP and healthcare sector analyst with Moody’s stated “Improving capital formation and access will drive expansion and growth initiatives. Hospitals are a very capital-intensive industry,” Gladstone said, “and 2018 is going to be a big capital-expenditures year for a bunch of hospitals and healthcare companies” In the same article, HCA CFO Bill Rutherford stated “We are boosting our three-year capital-spending plan by about 28 percent to $10.5 billion”.  CEO Milton Johnson said “most of the new tax savings would be channeled into expansion, improvement of the company’s medical facilities and technological upgrades”.

Our internal research indicates the early evidence is in and shows that improved capital positions are allowing many small-sized to medium-sized “for profit” and some “not for profit” health systems, including many freestanding hospitals, to join the “expansion” trend. This is driving health services organizations and physician groups across the country to come together to plan and/or build new outpatient facilities, ambulatory services centers  and add new clinical services and technology, in an effort to improve their financial health, address regulatory changes, launch overdue infrastructure/capital projects, provide new patient care capacity, enter new and emerging markets, expand ambulatory strategy and, yes, more closely align with their physician partners. Physicians who are adept at negotiation are well positioned to take advantage of this current and, potentially, longer term market dynamic.

Effective Negotiation: A Critical Success Factor

What is the essence of negotiation? Negotiation, in its simplest form, seeks to maximize value or benefit and minimize loss or risk between one or more parties.  A key factor in successful negotiation for physicians is to acquire, develop and deploy effective business negotiation skill-sets -- something that was not likely part of their medical training.  Obviously, physicians are experts in assessing complex problems and making appropriate, effective decisions. However, in our experience, when physicians need or want to strike a deal with hospital administration it can often result in” cognitive dissonance” when attempting to negotiate mutual value or workable agreements with hospital administration.  Frequently, this can be quite vexing for physicians to be sure!

So, what are the “critical success factors” that drive effective negotiation with hospital leadership? Here are six foundational keys:

  1. Know Thyself:  Front-load for Success. Assess your negotiation strengths and weaknesses.  You need, at a minimum, to prepare yourself through studying successful negotiation methodology and producing a thorough, best case presentation for your target audience. If you’re a novice at this or have not been as successful as you would have liked to have been in the past, seek subject matter experts to assist you.

  2. Know Your Hospital Administrators’ Negotiating Position:  Maximize Your Leverage.  Assess the operating strengths and weaknesses of your hospital, including market share, level of quality, profitability, and competitive position in your specialty and current state of their operational/clinical capabilities. Finding the strongest position for you and leveraging their weaknesses or adding new strengths to the hospital’s position in the marketplace is the goal.

  3. Understand Barriers Upfront:  Assess the Landscape.  Assess the “value proposition” from the hospital’s perspective -- does it put them at moderate to significant risk legally, strategically, and/or operationally?  If yes, you will need to craft or adjust your plan to address those issues; create attainable, mutual value; and decrease/mitigate risk.

  4. Use Data in Your Deal Presentation:  Use Visual Aids to Describe the Proposal.  Like physicians, highly performing hospital managers are trained to use data to drive decisions.  Presenting your concept and proposal with supporting data, such as incidence/prevalence data, growth projections, financial/operational impact, or evidence-based quality improvement research is effective. Again, this is an area that may be new or unfamiliar to physicians; seek subject matter experts to assist you.
  1. Employ Effective Interpersonal Skills:  What You Say and How You Say It Matters. 
    The manner in which you communicate with one another and negotiate deals is positively or negatively impacted by the way you speak and interact.  Employing interpersonal techniques that share information clearly, build trust and seek to positively mold and shape negotiations is very important.  The goal is to decrease stakeholder risk and increase mutual reward. 
  1. Think Outside the Box:  Always Assess Alternatives.  Sometimes the best thing to do when considering negotiating a deal with a hospital or health system is to not negotiate at all!  On occasion, the best way to maximize value for you and/or your practice is to develop something on your own or with others. We often counsel CV medical groups to conduct a feasibility assessment when considering alternatives to developing and negotiating hospital deals.  With current trends in capital access, patient care reimbursement, maximizing practice/operational growth, efficiency and convenience; improving financial metrics; and creating greater leverage in the healthcare marketplace may best be accomplished through joining with other medical specialties or other non-hospital capital partners. 


For CV physicians, the ability to craft and negotiate the best business deal (s) possible, regardless of their particular practice operating model, whether employed or unaffiliated, increasingly requires a level of deal-making sophistication many cardiovascular physicians have not been trained to use, had the time to develop or have not been as successful in previous hospital negotiations as they would have liked to have been. CFA believes, given the improved hospital capital formation landscape and the steady move to outpatient care, the opportunity for negotiating new and/or more favorable alignment strategies between hospital and physicians are quite good at present. Successfully employing the six keys to effective negotiation outlined herein will help CV physicians improve their ability to secure value-added practice agreements, create strategic advantage and /or joint business ventures with or without hospital administrators. Working to better understand, develop and leverage your strategic position is a skill many cardiovascular physicians would do well to develop. 

In part 2 of this blog we will address proposed new regulatory changes on the horizon that may make physician - owned health services an attractive option for some cardiovascular medical groups and physicians.  We will also highlight a CFA case study between a health system and a cardiothoracic surgery group that resulted in forming and executing a new professional services agreement that significantly benefited both parties. 

For additional detail, see CFA’s white paper, “Six Keys to Successful Hospital Negotiations.” via the link provided above. 

As always, CFA welcomes your comments or suggestions. 


  2. CFA - Definitive Healthcare National Database Hospital Profile Review 2017 - 2018

Rethinking Ambulatory Cardiovascular Strategy:  Part Two – Example Approaches

Posted by John Meyer, LFACHE

5/11/18 8:08 AM

Rethinking Ambulatory Cardiovascular Strategy:  Part Two – Example Approaches

Posted by John W. Meyer, LFACHE

In the previous blog post (refer to Rethinking Ambulatory Cardiovascular Strategy:  Part One – The Big Picture posted on 4/19/18), I discussed the rationale for the need to reconsider your ambulatory strategy.  From the perspective of the cardiovascular service line administrator, let’s look at example approaches and some real world situations to illustrate these issues.

Example Approaches to Enhancing Ambulatory Strategy

Ambulatory strategy starts at the clinical and operational level.  Here are some examples of areas that can make a direct or an incremental impact on your approach to ambulatory care:

1. Adapt Rapidly to Changing Technology – Options for treating patients on an ambulatory basis are continuously expanding. Be attuned to these changes and move as rapidly as is feasible to adapt and change. Note that the transition period could lead to an unintended consequence – a short-term drop in (inpatient versus outpatient) revenue – but will yield long-term incremental results.

Example:   Creating same-day discharge PCI programs using/expanding transradial arterial access.Transradial access lowers bleeding complication rates; access closure is more reliable with pressure alone (without closure devices); and earlier patient ambulation helps reduce nursing time required per patient.  Research in example hospitals has shown a savings of from $1,200 to $1,900 per case when radial access is used.[1]  Estimates of the use of radial access in the U.S. are currently in the 25% range, with wide variation by geographic location.

Example:   ED-Based Chest Pain Observation Units. Care of the patient presenting to an ED with chest pain and/or angina remains a common yet challenging aspect of emergency medicine.  Acute coronary syndrome typically presents in nonspecific fashion.  The development and evolution of the ED-based observation unit has helped to safely assess and diagnose those most at risk for an adverse cardiac event.  Furthermore, there are several provocative testing modalities to help assess for CAD.  (High Sensitivity troponin screening (HSt) possesses extremely high predictive power to rule in or out acute MI, so this may decrease need for increased space considerations.)

2. Incorporate Best Practice Guidelines. The latest expert consensus documents, incorporating best-practice guidelines, protocols and algorithms, inclusive of their recommendations, should be incorporated into hospital care practices and revised policies and procedures. More specifically, patient risk-assessment/stratification and resultant treatment recommendations, applicable to those patients that can be treated safely and effectively on an ambulatory care basis.

Example:   Case selection criteria for hospitals performing PCI without on-site surgical backup. The SCAI/ACC/AHA Expert Consensus Document – 2014 Update on PCI without On-Site Surgical Backup documents the recommendations for patient selection, treatment and potential transfer.  This assists the attending physician in making clinical decisions, including ultimate judgements about ambulatory versus inpatient versus transfer-out treatment planning.

3. Re-Engineer Care. Re-engineering patterns of care, particularly across the continuum in an episode of care model, is critical to financial success. Integral to this process is the clinical discussion that should take place to evaluate each patient category, apply the most progressive care practices, identify barriers to success and gaps in performance, and make appropriate changes. Inherent in this process is the identification of outpatient treatment opportunities, either through the application of best-practice guidelines and protocols, or locally-derived care practice improvement efforts.

Example:   Many hospitals have successfully re-engineered their heart failure care by assigning case managers and implementing rapid-response to patient follow-up – including telephonic monitoring, cardiac rehab, outpatient clinic visits and other ambulatory approaches.  Particularly applicable to bundles, such programs have successfully decreased inpatient stays, readmissions, ED visits and overall cost per case, while stressing carefully managed ambulatory processes.

Example:   Cardiac rehabilitation programs reduce readmissions and save money, but most patients don’t participate.  Maximizing rehab participation can have a dramatic impact on overall utilization and must be a key part of any ambulatory strategy.  Ensuring that physicians stress its importance and incorporate cardiac rehab referrals for their patients can aid in increasing participation.

4. Enhance Physician Strategy. No ambulatory care strategy is complete without physicians, both PCP’s and cardiovascular specialists. Increasingly, hospitals and health systems are having difficulty recruiting top talent both to staff expanding primary care networks and the CV service-line. Integrating physicians into the organizational and operational infrastructure of the service-line and incentivizing them through appropriate vehicles should inevitably lead to stronger ambulatory approaches, while mitigating potential efforts by physicians to directly compete for ambulatory business with hospitals. Ambulatory hospital-physician integration strategies are structured along a minimalist to maximum continuum: from professional physician services agreements to cover outlying clinics with diverse geographic coverage, to co-management agreements (see example below), to compliant JV outpatient facilities, to employed physician arrangements.

Example:   Simple Integration through Co-Management Agreements.  CV physicians participating in co-management agreements can be legally incentivized to address a specific set of priority goals and objectives, including prioritized ambulatory strategies custom to the organization.  Examples are numerous, such as staffing outreach clinics, developing best-practice protocols/policies and procedures, re-engineering care, lowering cost per procedure, enhancing patient experience, hitting a target percent of outpatient versus inpatient cases, and others.

5. Minimize Leakage. Ambulatory strategy suggests that the hospital needs to capture and retain its fair share of this market. Building utilization by keeping patients within the system results from offering services that are accessible, geographically located and medically appropriate, as well as managing individual care to maximize clinical effectiveness and overall patient care experience.

ExampleCase Managers/Care Coordinators/Nurse Navigators. To prevent leakage, many hospitals have re-engineered care through the use of case managers who are responsible for individual patients throughout the entire episode of care.  They insure patients are linked to appropriate providers, follow-up appointments are scheduled, and patient experience is enhanced.  Additionally, minimizing readmissions through case management has proven to be very successful.

6. Improve Interoperability/Optimize the CVIS. Increasingly, interoperability issues with and between information technology systems are present in ambulatory development – between inpatient and outpatient systems, physician practices, and off-campus facilities – and even within the hospital’s cardiovascular information system (CVIS). Historically, inpatient and outpatient data management have utilized different IT platforms. Increasingly, systems will need to be adapted to monitor and manage patients between facilities – in real time -- throughout an episode of care. At the service-line level, CVIS optimization is a significant problem that can impact all levels of patient care, physician reporting and information generation for ongoing operations management.

Example:  Proprietary Episode of Care Case Management Platforms.  New IT platforms are being designed to facilitate the management of individual cases over a defined episode of care with interoperability between networked facilities and real-time reporting.  Primarily used by case managers, they seek to coordinate inpatient and outpatient utilization to maximize efficiency, effectiveness and overall cost of care.

ExampleOptimization of CVIS.  Most hospitals have invested in state-of-the-art data collection and reporting systems for their cath lab, cardiology and vascular services which offer structured reporting – either with or without cardiovascular picture archiving and communication systems (CPACS).  Many are still dysfunctional.  Optimization projects focus on customizing interfaces with hospital IT systems, structuring and customization of reporting templates for local physicians, and maximizing technology to support existing clinical work flow.  The efficient operation of CVIS can have a dramatic impact on ambulatory work flow.

7. Continue Ambulatory Facility Development. While “right-sizing” facilities for the ambulatory challenge is a big picture issue – and a high priority given budgetary implications – the CV service-line administrator must optimize utilization of existing facilities, while actively participating in the planning of new, expanded/relocated, geographically disparate outpatient capabilities. Additionally, robust planning needs to occur to adapt to new technology and incorporate rigorous risk-stratification/patient selection criteria for all procedures to produce the highest percentage of outpatient-appropriate patients.

ExampleLowest-Cost Setting.  A teaching hospital with a full-service cardiovascular program purchased a rival “heart hospital” near its main campus for use as an ambulatory care and short-term surgical facility.  This facility has a fully-licensed cath lab.  With the goal of utilizing the lowest-cost setting to lower its cost per case, the main hospital’s cath lab manager is attempting to schedule elective diagnostic caths at the other facility to free-up its main cath lab schedule, enhance the patient experience and lower the overall costs of routine scheduled procedures.


As inpatient volumes are impacted by ambulatory strategies, and value-based reimbursement and episode of care models continue to proliferate, hospitals will be challenged to provide appropriate access to care through ambulatory facilities.  Cardiovascular services play a vital role in such strategies through maximizing the appropriate applicability of outpatient-related services, the distribution of services among its geographic market area, and the operation of such services to maximize both physician participation/integration and the overall patient experience.  Service line administrators have a vital role to play in this strategy development.

If you are interested in learning more about ambulatory strategies, bundled pricing, cardiac services strategic development, service expansion or low volume cardiac surgery programs and/or other programmatic needs for cardiovascular or other services, please contact CFA at (949) 443-4005 or by e-mail at


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