Integration of cardiologists with hospitals: Effects on physician compensation and productivity.

ABSTRACT

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.