The CFA Perspective

Cardiothoracic Surgeon Compensation in a Low-Volume Cardiac Surgery (LVCS) Setting: Part 2

Posted by Peter J. Spiers, Ph.D.

11/14/18 12:48 PM

physician comp imageOverview

According to the Society for Thoracic Surgeons (STS) Adult Cardiac Surgery Database: 2018 Update on Outcomes and Quality, across the 1,119 participating cardiac surgery programs in the database, the average adult cardiac surgery procedure volume in 2016 was 200.8 cases.   This is virtually 

equal with the STS definition of “low-volume,” defined as 200 cases or less per year.  As we all know, there are several high-volume to very high-volume cardiac surgery centers across the U.S.  This results in a large percentage of the rest of the cardiac surgery programs having well under 200 annual cases with many providing 100 cases or fewer.  In the most recent reporting year, 80% of total number 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, given the need for 24/7/365 coverage. Therefore, to attract and retain competent second or “back-up” surgeons, low-volume programs often have to pay market competitive compensation, while their available production will most likely be low compared to its peers.  The resulting “math” results in  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 and effective way to address this issue?

In Part One of this blog (see Cardiothoracic Surgeon Compensation in a Low Volume Cardiac Surgery (LVCS) Setting: Part 1) we addressed the multidimensional predicate underlying the challenge of CT surgeon compensation in a low volume (LVCS) setting.  We examined the diverse nature and operating performance of LVCS programs across the country, the need to thoroughly understand each programs’ specific market dynamics, and the changing clinical, technologic and financial factors impacting the successful maintenance of a profitable, high quality LVCS program.

Enhancing Baseline Performance in a LVCS Program

We have learned in our consulting practice not all LVCS programs are cut from the same cloth.  In our experience, many LVCS have opportunities to enhance their strategic operating profile/position through:

  1. Redirecting/reducing CT volume leakage. We have found thorough market/program analysis that LVCS programs can identify and slow and/or reverse leakage to competing hospital programs including bypass graft, valve and thoracic cases, leading to increased total case volume/revenue.
  2. Recognizing cardiac surgery volume, cost, quality and profitability is a multidimensional equation. Depending on the level of well-planned strategic market and business development activities, many programs can improve their case volume and case mix through smarter competitive and growth strategies.  This is often overlooked and/or untapped within many LVCS programs.
  3. LVCS programs with exceptional, outcomes driven CT surgeons leading the service experience decreased operating expense – especially over an entire episode of care – as well as increased quality outcomes, and cost-effective post-op care. Consequently, a program doing 100 surgeries a year can be as, if not more, profitable on a per case basis, than many larger volume programs[i].  (CFA has had the honor of assisting a number of the heart programs listed on the current and past Watson Health Top 50 Cardiovascular Programs lists.)
  4. High quality, cost-effective cardiac surgery, even in the low volume setting, can drive significant contribution margins and help dilute the cost of additional CT surgeon support! (nearly 30% of those on the top 50 heart program list qualify as LVCS programs under the aforementioned STS definition!)

In Part Two of this blog we will present an approach to second CT surgeon compensation designed to address the value inequities inherent in wRVU based payment methodology.

Driving the Value Equation – CT Surgeon Compensation Beyond the wRVU Standard

In Part Two of this blog we will present an approach to second CT surgeon compensation designed to address the value inequities inherent in wRVU based payment methodology.

As mentioned above and, in part one of this blog, CFA uses the following dual strategy approach to assist LVCS hospitals to address the second CT surgeon compensation dilemma: 

  1. Drive customized program optimization
  2. Re-define and expand the CT surgeon value equation

Our firm strongly believes the key issue surrounding the second CT surgeon compensation dilemma is to thoroughly understand and develop a measurable “value play” approach.  It is nearly impossible to retain a competent second CT surgeon based on a compensation methodology using wRVU standards alone.  The “math” simply doesn’t work!  So, besides the obvious “cost of doing business” challenge associated with the need to recruit a second CT surgeon, LVCS programs need to identify, quantify and drive the “total value equation.”  We recommend hospitals develop and use another “value standard” other than the wRVU approach alone.

CFA frequently advises and assists our clients to build into their compensation methodology a set of program development/value drivers.  We have found that most CT surgeons are willing and able to help drive business and optimize the overall cardiac service line!  So, using measures that decrease cost, drive operating outcomes and grow the business can create demonstrable “value.”  Meeting to analyze privately and, also with the entire CV service, a defined set of program growth and development metrics driven by the CT surgeons supports the value play approach to CT surgeon compensation.  Along with operating on a scheduled/fill-in basis, experienced, second CT surgeons can and often have great ideas that help address most of the optimization activities mentioned earlier.  One of our clients has built into their compensation agreements with their second surgeon a set of initiatives that drive cost reduction strategies, improve clinical outcomes, assist the business development team identify and re-direct lost volume, and help the hospital to seek and develop new lines of business (e.g., thoracic, valvular, vascular, etc.)

We recommend that during the recruitment process this approach beyond the wRVU standard be presented in the recruitment job postings and discussed during recruitment interviews so that expectations are clearly understood.  It is not uncommon, and we have seen CT surgeons actually augment the hospitals initial set of “value drivers” during the recruitment and contract negotiation period with their own new, fresh ideas.  CFA understands paying for second CT surgeons to sit in the doctors’ lounge is not a good thing.  While having a second surgeon is almost always needed, LVCS programs can create a methodology to justify and dilute some of this “cost of doing business” through bringing greater, more demonstrable value to their cardiovascular program through measuring and increasing the second CT surgeon’s contributions to the LVCS program via a value-driven agreement!

 

Footnotes


[i] Watson Health  50 Top Cardiovascular Hospitals Study, 2019 20th edition  |  November 5, 2018