The CFA Perspective

Cardiothoracic Surgeon Compensation in a Low Volume Cardiac Surgery (LVCS) Setting: Part 1

Posted by Peter J. Spiers, Ph.D.

10/17/18 10:00 AM


physician comp imageAdvances in coronary heart disease (CHD) prevention, diagnosis and treatment has progressed significantly over the past two decades.  From primary prevention, risk factor reduction and effective noninvasive early screening techniques, to pharmacologic and interventional procedures, the overall volume of coronary artery bypass surgery (CABS) in the U.S. as steadily declined for several years.  Coupled with these preventive, clinical and technologic advances, the proliferation of cardiac surgery programs across many U.S. healthcare markets in past decades has distributed and diluted cardiac surgery volumes adding an additional burden to program viability for many full-service cardiovascular providers.

According to the Society for Thoracic Surgeons (STS) registry data, nearly 80 percent of U.S. CABG programs are considered “low volume,” defined as 200 cases or less per year with a large percentage of these having 100 cases or fewer.  In the most recent reporting year. these 80 percent of programs account for just 54 percent of total CABG volumes.  It is extremely burdensome for a single surgeon to cover a cardiac surgery program, even a low-volume program, so there is likely to be a second surgeon, even though the volumes alone would not support this second physician.  To attract and retain competent surgeons, low-volume programs often have to pay market competitive compensation, while their available production will most likely be low compared to peers.  The resulting math is a higher compensation per wRVU for employed CT surgeons in the low-volume setting. These and other factors have resulted in a challenging dilemma:  What is the most equitable way to compensate employed CT surgeon(s) in a low volume cardiac surgery (LVCS) operating environment?

In part 1 of this blog we will address the complex predicate underlying the challenge of CT surgeon compensation in a low volume setting.  We will examine 1.) multi-factorial market dynamics and 2.) clinical and technologic dimensions impacting the successful maintenance of a profitable, high quality LVCS program.  In part 2, we will present customized, innovative strategies designed to help recruit, retain and compensate CT surgeons in the LVCS setting.

Market Dynamics – Optimizing Your LVCSP

Being designated a “low-volume cardiac surgery program” should not be considered a monolithic phrase or situation.  Not all LVCS programs are cut from the same cloth.  Cardiac surgery volume, cost, quality and profitability is a multidimensional thing.  Depending on the level of demonstrable CT surgeon expertise and quality, payer mix and cost-effective post-op care, a program doing 100 surgeries a year can be as, if not more, profitable per case, than many larger volume programs[i].  High quality, cost-effective cardiac surgery can drive significant contribution margins: nationally, according to a recent Advisory Board cardiac surgery profitability study, the average hospital receives a contribution profit per case of approximately $13,700 for cardiac surgery services, and the profit per case can range from $6,700 to $26,350 for Medicare patients.  Particularly for hospitals with limited risk-based contracting, these highly profitable procedures may subsidize less profitable (but still important) work in other areas.

This factor weighs heavily on the LVCS CT surgeon compensation question.  CFA’s internal data show that LVCS CT financial resource allocation can be well tolerated in high quality, lower cost settings when a cost-effective program performance model drives enhanced contribution margins.

The equation becomes more complex when some or all of these factors are limited or declining.  Surprisingly, for many hospitals, CFA has found that through conducting a comprehensive market assessment and program development evaluation incremental volume growth and/or stabilization can occur in many LVCS programs, even in saturated markets. Through the use of robust, multi-factorial market assessments hospitals can: identify reversable volume leakage, strategies for capturing new growth and provide hospitals and cardiac physicians with an open, honest and rigorous CV surgery program cost, quality and program development evaluation. Additionally, developing an operating environment where greater clinical, operational and performance collaboration and incentives help drive improved CV physician and hospital alignment and treatment strategies can help CV surgery volume stabilization, improve financial performance and improve cost-effectiveness.  This coupled with improving contribution margin helps hospitals better absorb the often-needed addition and cost of a back-up surgeon in LVCS programs.

Case in point, CFA is currently assisting a regional hospital in the mid-west grow its cardiovascular market-share, and in a particular CV surgery volume.  This program has experienced an annual CV surgery volume decreas of approximately 40-50 cases over the past 3 years.  Increasing PCI volume was one factor impacting cardiac surgery volume as well as significant out-migrating case volume within the client’s secondary service area.  With outmigration estimates ranging between 75-125 cardiac surgeries per year, the CV surgery program remained a driver of contribution margin during the past 3 years, albeit in a decreased amount, due to consistently posting some of the best clinical, cost-effective and operational outcomes in the state (and in some cases the nation!).  Due to a consistently cost-effective, best practice CT surgery program, the hospital was able to support their primary CT surgeon with a part-time, back-up surgeon for call coverage and time off.  As a result of the CFA market assessment and strategic growth plan, volumes are steadily growing, some of the “volume leakage” has begun to re-direct, and interventional cardiology is working more closely with the CT surgeon to collaborate on patient treatment strategies.  Currently the hospital is actively developing an expanded second CT surgeon support plan.

Clinical and Technologic Impacts – Not a Death Sentence for LVCS Programs

Coronary intervention has continued to grow substantially in the U.S.  In a large portion of full-service cardiovascular programs, the ratio between PCI and CABS is 3:1 or greater. Additionally, for many programs as much as 30-40% of total cardiac surgery volume is cardiac valve surgery or combination valve/CAB cases.  With the growth of structural heart therapies including TAVR and Mitra Clip surgery, surgical aortic valve replacement (SAVR) and, ultimately, mitral valve surgery (MVS) has begun to further erode cardiac valve surgery volumes with further declines into the future.  According to recent published reports CMS TAVR program requirements may change to become less stringent as the national experience increases and safe, high quality outcomes become commonplace.  This too will have a downward volume effect over time on all cardiac surgery programs including LVCS programs.  However, CFA believes the need for CABS and cardiac valve surgery will be needed into the near to longer term future.  CABS still enjoy a best practice status for many patients with multi-vessel CHD[ii]. Not all valve patients are good candidates for TAVR or Mitra clip intervention.  Plus, reimbursement for cardiac valve surgery versus TAVR is higher in nearly all instances due to substantially reduced cost per case.  Hence there is even a greater need to understand, optimize and maximize the operating performance of your LVCS.


The purpose of part 1 of this blog post was to provide a concise predicate and review some of the key factors impacting the performance and profitability of low-volume cardiac surgery programs (LVCS).  CFA believes understanding this framework provides important, baseline insights when addressing the challenge of compensating primary and secondary surgeons in the low volume setting.  Not all LVCS program are the same strategically, financially and operationally.  Understanding the key internal and external factors impacting your LVCS comprise one part in developing a sound, sustainable compensation model for adding a second CT surgeon in the LVCS setting.

In part two of this blog we will address how to establish CT surgeon value beyond the use of wRVU’s when adding a second CT surgeon and creative ways to craft an equitable and attractive CT compensation in a LVCS setting.

If you are interested in learning more about low-volume cardiac surgery program strategies and options, please download our updated and expanded whitepaper (see Low-Volume Cardiac Surgery Programs:  Grow, Consolidate or Divest:  Self-Preservation Strategies and Excellence Expectations, CFA’s 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





Cardiovascular Program Strategy:  TAVR for All Moves Ever Closer

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

9/19/18 12:41 PM

Time to PlanHospitals with small to medium-sized cardiac valve surgery programs need to know that the era of TAVR for most or all aortic valve replacement cases (AVR) – regardless of overall risk category – is moving ever closer to reality.  A recently published clinical trial of low-risk TAVR patients did not find any significant differences in the rate of all-cause mortality between low-risk patients undergoing TAVR and a control group undergoing surgical aortic valve replacement (SAVR).[i]  Positive results for high-risk, then medium-risk, and now low-risk patient cohorts would suggest that the clinical appropriateness of TAVR for all or certainly the majority of patients requiring AVR is now one step closer to becoming best practice. 

Recognizing that regulatory and reimbursement changes historically lag behind both clinical trial outcomes and professional society guidelines and recommendations, hospitals with cardiac valve surgery programs will need to evaluate their program volume and SAVR/TAVR procedure mix as the dust finally settles on both clinical appropriateness and reimbursement-related issues.  Consequently, low-volume cardiac valve surgery programs are rapidly approaching a crossroads where strategic decisions will need to be made if program viability is at stake in those markets where higher-volume TAVR providers take more volume away from existing non-TAVR providers.  In the future, a hospital left with only SAVR capability will be at a distinct disadvantage.

The Current State

CFA has blogged extensively on TAVR-related issues and strategy.  Here is a recap of important past and current information, followed by strategic implications.

  • We have previously made the point that cardiac valves cases can represent a significant portion of the total cardiac surgery population (refer to Low-Volume Cardiac Surgery Programs: Valve Surgery Trends and Implications, posted 6/28/2018).  Nationally in CY 2016, 23% of total cardiac surgeries were cardiac valve cases.[ii]  Low-volume cardiac surgery programs in particular, cannot afford to lose additional volume of potential surgical cases to hospitals with both TAVR capability and reimbursement approval.  While the actual (and potential) number of valve cases performed in individual hospitals varies tremendously, it is a factor that must be considered in assessing both overall program viability and conceptualizing offensive and defensive strategies.

  • Currently, Medicare’s 2012 National Coverage Decision spells out specific criteria for TAVR reimbursement and continuing approval. Between 25% and 33% (or roughly 50% of all hospitals doing valve surgery) of all hospital cardiac surgery programs are now approved to perform TAVR.  The procedure, and the regulations surrounding it, have become hotly contested.  CMS held a July meeting of its Medicare Evidence Development and Coverage Advisory Committee (MEDCAC) to discuss procedural volume requirements for procedures including TAVR.  Under some industry pressure to relax its existing minimum volume requirements, the group produced no consensus specific to this issue (although the majority favor retaining minimum volume requirements).  Prior to the meeting, JACC released for prepublication 2018 AATS/ACC/SCAI/STS Expert Consensus Systems of Care document:  Operator and Institutional Recommendations and Requirements for TAVR.  Important findings from this consensus document include: 1) that 38.9% of approved centers perform less than the recommended 50 TAVR’s/year; and, 2) that the STS-ACC TVT Registry shows “a clinically meaningful association of higher mortality and other major complications with site annual volume below the recommended threshold of 50 procedures per year.”[iii]  Further, the Consensus document recommends some lowering of recommended minimum volumes from 50 to 40 per year.

  • Hospitals are actively competing for TAVR market share. Lower volume hospitals and hospitals in geographic areas without ready access to TAVR, and medical device manufacturers are complaining that the current reimbursement criteria are too stringent and needs to be modified.  They claim discrimination issues for minorities and rural residents due to lack of access that force SAVR or no surgery at all.  As noted in Hospitals Battle For Control Over Fast-Growing Heart-Valve Procedure,[iv] it is all about money and market share of a cachet-carrying service of importance to all full-service cardiovascular program hospitals.  The seemingly perpetual battle between the “haves and have-nots,” and the quality outcomes/volume argument goes on.

Strategic Implications

On the surface, the broadening of clinical indicators for TAVR to include nearly all patients requiring AVR, has the potential to reconfigure local marketplaces.  This should allow the average TAVR provider to increase its volume and thus come closer to meeting or exceeding the national minimum volume standards – especially if minimum thresholds are decreased.  It may also allow some lower volume providers to establish TAVR programs for the first time.  Lowering of the volume standard by Medicare would potentially assist this scenario.  Low-volume cardiac valve surgery programs will now be faced with a complete loss of AVR surgery cases, potentially putting an additional strain on overall program volume and forcing them to make hard decisions about program viability and financial performance.

In our last related blog post, we commented on the need for any hospital contemplating entering this market to think long and hard before making a decision.  Optimizing TAVR programs specifically, and valve surgery programs in general, has been challenging even in high-volume situations.  The potential for virtually all AVR candidates to receive TAVR at approved centers certainly needs to be factored into every hospital’s unique market and circumstances.  Increasing the overall surgical volume may very well help some programs achieve a degree of viability, but careful consideration of potential volume, reimbursement, competitive position, cost and associated factors will be needed to make a robust strategic decision going-forward.

If you are interested in learning more about low-volume cardiac surgery program strategies and options, 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  



[i] Waksman, Ron, et al, Transcatheter Aortic Valve Replacement in Low-Risk Patients with Symptomatic Severe Aortic Stenosis, JACC:  August 2018, DOI: 10.1016/j.jacc.2018.08.1033

[ii] D’Agostino, et al, The Society of Thoracic Surgeons Adult Cardiac Surgery Database:  2018 Update on Outcomes and Quality, Annals of Thoracic Surgery, 2018; 105; 15-23.

[iii] 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.

[iv] Galewitz, Phil, Hospitals Battle For Control Over Fast-Growing Heart-Valve Procedure, Kaiser Health News, posted online August 17, 2018.

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