Cardiothoracic Surgeon Compensation in a Low-Volume Cardiac Surgery (LVCS) Setting: Part 2
Overview
According to the Society for Thoracic Surgeons (STS) Adult Cardiac Surgery Database: 2018...
Given trends in healthcare, and in cardiovascular services specifically, it is instructive to look at the issue of low volume cardiac surgery programs in California. Consider these data:
(For the moment, we won’t enter into the persistent debate over quality = volume, although that topic obviously underlies this discussion and is deserving of further review.)
Any discussion of declining program volume starts with the national downward trend in cardiac surgical volume, but how does one go about explaining and justifying these low volumes in 39 hospitals in the state? There are many factors at work:
Despite countervailing pressures on hospitals to report hospital and individual surgeon outcomes and volumes; continuing efforts to achieve transparency in volume, outcomes and pricing; consolidation and network development; pricing pressures (including the use of “reference pricing”); and other trends designed to channel patient volume to high-value centers; few, if any low surgical volume hospitals have moved to divest or “right-size” in recent years.
A significant factor in this equation may be the new California law that allows hospitals with licensed cardiac cath labs to apply for certification to do elective PCI without on-site cardiac surgery. Hospitals that chose to provide cardiac surgery only as a way of accessing elective PCI will now be faced with an important strategic decision: divest or look for alternative ways to boost their cardiac surgery program volume and/or re-tool their operating model to achieve required financial (and perhaps clinical) performance. Another significant fear is that closing cardiac surgery will result in negative consequences to the remaining interventional cardiology and electrophysiology/cardiac rhythm management programs. CFA believes that closing one’s cardiac surgery program does not have to be fatal to the remainder of cardiac services if the divestiture is carefully planned and managed.
Many other states have dealt with the issue of low volume directly through regulation and licensure, as opposed to letting market forces prevail. Some states still use CON or other regulations that require minimum volumes for new and/or continuing licensure of existing services. For example, New York, (admittedly a highly regulated state), requires programs to perform a minimum of 500 surgeries per year; in New Jersey the threshold is 350. Michigan recently changed its minimum volume requirements from 200 to 150, reflecting the new reality of lower volume trends. Some states are getting away from minimum volumes altogether and focusing on quality outcome measures alone. In California, market forces, rather than regulation, predominate as the way of controlling proliferation. However, one could argue that this approach, with few exceptions, has yet to shift significant volume between providers or to a few, large volume providers.
There are many strategic as well as practical, local market-based reasons to continue to operate a low-volume service such as cardiac surgery, whether you are a single hospital or part of a multi-hospital system. Now that elective PCI is permitted without on-site surgical back-up, that justification is no longer a part of the analysis. CFA firmly believes that several hospitals, if certified to perform elective PCI, will eventually divest their surgical programs. In the near term, other low volume providers will need to take a hard look at their strategic and operational options. Cardiac surgery programs performing under 100 cases/year typically cannot be financially sustainable without cross-subsidization. These questions arise:
These are difficult and complex decisions, but will need to be addressed by all hospitals attempting to prosper in these challenging times.
If your hospital is faced with low cardiac surgical volumes and you would like to discuss these questions, strategies or other options, we are available to talk to you at any time.
As always, CFA welcomes your comments, suggestions and questions.
According to the Society for Thoracic Surgeons (STS) Adult Cardiac Surgery Database: 2018...
In a previous blog, CFA asked the question, “Can a low-volume cardiac surgery program be excellent?...