Cardiology: The Implications of Value-Based Care

Vertical: Cardiology
Author: JC Lupis
Date: March 2020

“Cardiovascular professionals… need to embrace the idea that in order to drive the most value they have to accept risk in the delivery of care.”

Tim Attebery, CEO of the American College of Cardiology (ACC) and MedAxiom

The U.S. health care system is in the early stages of transitioning from volume-based reimbursement (fee- for-service) to value-based care. Value-based care involves rewarding health care providers for improving people’s health and outcomes, rather than for delivering clinical services. This industry-wide shift is particularly relevant to CV care, given that $1 out of every $6 dollars spent on health care in the U.S. is spent on CV care, and an estimated 30% of this spending is considered avoidable.

One area in which CV practices are affected is PCP referrals. New alternative care models such as Accountable Care Organizations (ACOs) place PCPs at the center of a patient’s care network and make the PCP responsible for coordinating care and ensuring seamless transitions. These models have yet to clearly define a role for specialists, including cardiologists, which may explain why cardiologists participate in ACOs at relatively low rates. Nonetheless, the emergence of ACOs has implications for CV practice leaders.

The growth of independent, risk-bearing PCPs—primary care providers capable of assuming full financial risk for clinical care — signals that community PCPs are learning how to successfully become accountable for their patients’ outcomes and costs. This increased level of accountability warrants greater scrutiny on the part of PCPs over their downstream referrals. Cardiology practices that have experience with risk-taking and value-based care, and can help share financial accountability for care with PCPs, are at a competitive advantage in this environment because they are able to secure the trust of these PCPs and lock in referral networks.

The probability that an ambulatory visit to a physician resulted in a referral to another physician increased from 4.8% in 1999 to 9.3% in 2009 — a 94% increase. Rates of referrals of patients to cardiologists increased from 8.5% to 14.9% during this time period, and are expected to continue to rise as patient complexity increases.

Ultimately, the greater responsibility that PCPs garner for population health translates to a bigger role – and opportunity – for CV practices aligned with value-based care. Not only will CV practices be poised to capture greater numbers of referrals and increasing market share, but they’ll also set themselves up for greater financial success. As ACC CEO Tim Attebery declared: “If you say you don’t want to take risks, essentially what you’re doing is paying somebody else to take a risk… You’re giving up some of your potential income to someone else who is taking risks. So, I would say you’re leaving money on the table.”

Cardiology Market: Key Data Point

Experts estimate that, by 2035, CVD will afflict 45% of the US population in some form, and account for $1.1 trillion in direct medical costs.

Source: Advisory Board, Cardiovascular Market Trends, January 2019

Cardiology Market: Key Chart

Proportions of US Cardiologists in Private Practice vs. Integrated Employment,
2008-2018

GHA’s Cardiology Market Brief includes the following sections:

  • Cardiology Market-At-A-Glance
  • Cardiology Market Trends
  • Key Cardiology Market Data
  • The Implications of Value-Based Care
  • The Mergers & Acquisitions Landscape

To inquire about a copy, please contact research@ghadvisors.net.