Today marked the official announcement that the 12-man cardiology group, North Shore Cardiology, will officially join NorthShore University HealthSystem on 1 January 2011.
In other words, they'll be employees of our large hospital system like me.
For long-term readers of this blog, most will recognize this as an expected result of our most recent health care climate change. These days with reduced payments for services and tests, paired with the threat of bundled payments for episodes of care around the corner, such a consolidation is a logical consequence for cardiology practices in large urban environments. Private cardiology groups have felt a particularly heavy blow to revenues after the government slashed payments for some diagnostic tests nearly 40% since the first of the year (hospital systems were not affected to this extent).
For patients, they shouldn't note much difference, but referrals to hospital facilities will now be along hospital affiliation lines, rather than patient geographical preference. Subspecialist referrals also might be a bit different, since subspecialist utilization will be along the lines of hospital affiliation as well. It will not be to the employee-cardiologist advantage to refer cases outside your own system since that would be like biting the hand that was feeding you.
There used to be some advantages to cardiologists to remain independent. For instance, they could advocate for greater roles on leadership in the hospital administrative levels or insist on better staffing for their patients by threatening to refer their patients to a competing health care system. But this method also used patient referrals as pawns in these political games.
No longer will that occur.
But doctors will increasingly find greater conflicts between the needs of their patients and the needs of their business-minded hospital employers. Their loss of independence will require they been seen as "productive" lest their salaries or jobs be cut. They are now dispensable workers rather than critical caregivers and entrepreneurs.
There is also the challenge of joining cardiology groups and maintaining a fair compensation arrangement. Hospital systems need skilled specialists and deals are always cut to consummate these unions. No doubt there was a long process of bargaining on both sides of the deal. For those already in large systems, they understand that they also are at risk as hospital systems look to thin their payroll overhead. Fortunately, the expected bolus of patients to the system in 2014 paired with the stiff competitive environment locally is likely to help deter physician layoffs in the near future.
But there are competitive advantages - a strength in numbers if you will - to having a solid group of cardiologists at your health center, especially ones based close to the hospitals themselves. It forms a formidable competitive environment for others who want to stake a claim to the geography inhabited by these doctors for they are the locals - well known by the community - and supplanting them will come with significant costs in terms of marketing and facilities to those who might desire to enter the area.
The seismic shifts in health care delivery are well underway - from ongoing practice consolidations like ours with larger and larger competing urban health systems, to McDonald's threatening to drop their "mini-med" insurance plans and Principle Financial Group exiting health insurance altogether.
It's going to be an interesting time, but one thing's for certain...
... resistance (at least for the forseeable future) is futile.