February 14th, 2011

How Hospitals View Cardiology Groups

CardioExchange welcomes this guest post, reprinted with permission, from Dr. Westby Fisher, an electrophysiologist practicing at NorthShore University HealthSystem in Evanston, Illinois, and a Clinical Associate Professor of Medicine at University of Chicago’s Pritzker School of Medicine. This piece originally appeared on his blog, Dr. Wes.

It is no surprise that hospitals are acquiring cardiology and primary care groups in droves lately, as described in this article from Becker’s Hospital Review. It seems that, for now, there is a signficant financial incentive for hospitals to do so, but doctors, and especially cardiologists, should read the tea leaves, exemplified by this advice to hospitals in another article:

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.


One Response to “How Hospitals View Cardiology Groups”

  1. Mark Berry, D.O., M.S. says:

    I don’t think this view point only applies to cardiology. This is how hospitals view all of their service lines. One thing to keep in mind, a hospital is useless without physicians.

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