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Integration of cardiologists with hospitals

Effects on physician compensation and productivity

Chunn, Vance M.; Sen, Bisakha; O’Connor, Stephen J.; Jessee, William F.; Sasson, Joseph; Landry, Amy Yarbrough

doi: 10.1097/HMR.0000000000000223
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Background Hospital–physician vertical integration involving employment of physicians has increased considerably over the last decade. Cardiologists are one group of specialists being increasingly employed by hospitals. Although hospital–physician integration has the potential to produce economic and societal benefits, there is concern that this consolidation may reduce competition and concentrate bargaining power among providers. In addition, hospitals may be motivated to offer cardiologists higher compensation and reduced workloads as an incentive to integrate.

Purpose The aim of the study was to determine if there are differences in compensation and clinical productivity, measured by work relative value units (RVUs), for cardiologists as they transition from being independent practitioners to being employed by hospitals.

Methodology/Approach This study was a quantitative, retrospective, longitudinal analysis, comparing the compensation and work RVUs of integrated cardiologists to their compensation and work RVUs as independent cardiologists. Data from the MedAxiom Annual Survey from 2010 to 2014 were used. Participants included 4,830 unique cardiologists that provided 13,642 pooled physician-year observations, with ownership status, compensation, work (RVUs), and other characteristics as variables for analysis.

Results Results from the multivariate regressions indicate that average compensation for cardiologists increases by $129,263.1 (p < .001) when they move from independent to integrated practice. At the same time, physician work RVUs decline by 398.04 (p = .01).

Conclusion Our findings support the conjecture that hospitals may be offering higher pay and lower workloads to incentivize cardiologists to integrate.

Practice Implications Although hospitals may have goals of quality improvement and lower costs, such goals may presently be secondary to service line growth and increased market power. There is reason to be cautious about some of the implications of hospital integration of cardiologists.

Vance M. Chunn, DSc, is Chief Executive Officer, Cardiology Associates of Mobile, Inc., Alabama. E-mail: vchunn@cardassoc.com.

Bisakha Sen, PhD, is Professor, Department of Healthcare Organization and Policy, University of Alabama at Birmingham.

Stephen J. O’Connor, PhD, is Professor, Department of Health Services Administration, University of Alabama at Birmingham.

William F. Jessee, MD, is Managing Director and Senior Medical Advisor, Integrated Healthcare Strategies, and Adjunct Professor, Department of Health Services Administration, University of Alabama at Birmingham.

Joseph Sasson, PhD, is Vice President–Strategic Initiatives, MedAxiom, Inc., Neptune Beach, Florida.

Amy Yarbrough Landry, PhD, is Associate Professor, Department of Health Services Administration, University of Alabama at Birmingham.

The authors report no relationship or financial interest with any entity that would pose a conflict of interest with the subject matter of this study.

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