Friday, February 11, 2011

How Hospitals View Cardiology Groups

It is no surprise that hospitals are acquiring cardiology and primary care groups groups in droves lately. It seems there is a signficant financial incentive to do so for now, but doctors (and especially cardiologists) should read the tea leaves ahead:
While hospitals are limited to paying fair market value for practices, they can gain an edge over competing hospitals by offering longer employment contract terms or better electronic medical record systems and management services. If hospitals move forward with a transaction, Ms. Kaplan suggests they limit employment contracts to no more than two years if possible and rebase compensation annually based on productivity.

"In healthcare you shouldn't assume anything is permanent," says Ms. Kaplan. She cautions that the revenue increases that are currently available to hospitals through expanding outpatient cardiology services may not last forever, which is why she urges hospitals to limit employment contracts and other agreements to only a few years. Doing so will afford an "out" for the hospital if the service line goes from a money-maker to a money pit.

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