Insecurity about falling insurance payments and the impact of impending health-care changes are driving droves of cardiologists - among the highest-paid doctors - to leave private practice and become hospital employees.
The doctors are seeking to protect their income and get relief from the hassles of managing a business, as pressure mounts to reduce costs and invest in expensive computer systems. Hospitals, meanwhile, want closer relationships with doctors as changes loom that will reward efficiency and care coordination both in and out of the hospital.
The deals, said Bob De Luca, managing partner of IMA Consulting in Chadds Ford, "are an attractive alternative in this time of chaos and uncertainty."
Lourdes Health System in South Jersey has embraced the trend. Last year, it put 47 cardiologists from two large private practices on salary.
Main Line Health, which employed six cardiologists in 2008, now has 28. This month, it announced the hiring of the last four, a group in Roxborough. And Temple University Health System announced that eight cardiologists from Chestnut Hill Cardiology Group in Flourtown would join its physician group in March.
The acquisitions apparently are a touchy subject. Many area hospitals did not respond to requests for information about their strategies or the number of employed cardiologists.
At least for the time being, there are financial rewards: Medicare often pays more for procedures and treatments performed in hospital-owned facilities than it does for the same services in offices owned by doctors. The higher bills from shifting doctors to hospital employment in general, not just cardiologists, have already caught the attention of Washington policymakers. An influential advisory agency has recommended that payments be equalized for standard office visits. That alone could save Medicare from $250 million to $750 million a year, the Medicare Payment Advisory Commission says.
While the tighter relationships between doctors and hospitals could improve care, some experts say the trend, along with insurers' efforts to control costs through smaller networks, may mean that patients more often have to choose between their doctor and the hospital they prefer.
Michael Mirro, a Fort Wayne, Ind., cardiologist active in the American College of Cardiology, sold his practice in 2009 to Parkview Health, a large hospital system. He said he and fellow Parkview employees initially kept their privileges at a competing hospital, but gave up when the other hospital "really didn't make it a friendly environment for our patients." In the future, he said, "if you want to go to a different institution, you'll have to get a different doctor."
Cardiologists who have chosen to sit out the exodus from private practice think their fellow doctors are panicking and may come to miss their autonomy. They also question whether the new arrangements will stabilize income or are necessary to improve care.
Alice Gosfield, a health-care lawyer in Philadelphia, said many of the deals were fueled by "mutual delusions." Because aging baby boomers will need more heart care, she said, cardiologists don't necessarily need to become employees.
Whether or not they give up private practice, though, doctors will need to get more efficient. "The doctors are going to have to change their behavior," she said.
Everyone is trying to avoid the problems in the mid-1990s that plagued the last round of practice acquisitions by hospitals. Many hospitals then scooped up primary-care doctors in an attempt to capture patients and market share. Many of those relationships fell apart. Hospitals felt they had overpaid for the doctors and complained that doctors stopped working as hard once they went on salary. The new contracts typically include productivity and quality incentives. Doctors also are often involved in managing hospital cardiac care.
The trend is stronger in other parts of the country, local experts said, but is picking up steam here.
On average, cardiologists make about $450,000 a year. Their income has fallen slightly as Medicare has cut reimbursements for imaging and procedures like catheterization.
A survey last spring by MedAxiom, a practice-improvement group, found that 30 percent of cardiologists had integrated - sold or leased - their practices to hospitals. That figure had climbed to 40 percent by October, said president Patrick White, and another 40 percent said they were in the process of integrating or were seriously considering it.
He said other specialists, such as orthopedists, oncologists, and gastroenterologists, were also being sought.
The idea of working for a hospital has become more palatable in recent years, and the change is particularly noticeable among young doctors, who put a greater priority on work-life balance than peers from earlier generations. In 2003, just 4 percent of medical residents said their first choice was to get a hospital job. By 2011, 32 percent said that, according to consultants Merritt Hawkins & Associates.
The largest cardiology practice in the region is "planning to buck the trend," said Mark Victor, managing partner of Cardiology Consultants of Philadelphia (CCP). While the physicians who joined Main Line Health from Roxborough came from CCP, the group still has more than 70 doctors and practices in 18 hospitals.
Victor said the group's geographic scope and early heavy investment in information technology has put it in a stronger position than many smaller practices. It is engaging in "strategic alliances and virtual integration" with several health systems, he said, but he declined to describe what those entail.
Private practice allows for quicker and more direct decisionmaking by the doctors, he said, and gives patients more choices of health systems. Also, "controlling one's own destiny is a good thing."
At Lourdes, doctors and administrators saw their new relationship as a way to revamp care in ways that would better position the health system for change.
Most payments are still based on the amount of care hospitals and doctors provide. In the future, though, doctors and hospitals will receive "bundled" payments that reward efficiency and quality. There will be penalties if patients are readmitted to the hospital too fast. The hospital also hopes that high quality will earn it better deals from insurers.
The newly employed cardiologists at Lourdes, who have become co-managers of the hospital's cardiac services, have ushered in a raft of changes:
- They have standardized treatments and switched to a cheaper blood thinner.
- They have encouraged the hospital to equip ambulances and the emergency department with machines that allow doctors to diagnose a heart attack before a patient leaves home. That measure has reduced by 15 minutes "door-to-balloon" time - the time a hospital takes to perform a catheterization.
- They have created units staffed with expert nurses for heart-failure and heart-surgery patients. These have reduced the length of hospital stays without increasing readmissions. They also have improved patient satisfaction.
- The hospital has hired two family physicians to do home visits with heart patients.
Asked why the changes had not been made before the two cardiology groups went on salary, Reg Blaber, a member of one of the groups who is now vice president of the cardiovascular service, said, "These are things that we never really talked about before because there were all these stakeholders before, because nobody was organized to do it before. . . . These doctors are totally engaged in this process. And why? Because they suddenly feel like what they say matters."
The Lourdes doctors are also continuing to see patients at nearby Virtua and Kennedy hospitals.
Frank McGeehin, chief of clinical cardiology for Main Line Health, left a 54-person private practice in October 2009 to become a health-system employee. More than 20 of the doctors in the group now work for hospitals, he said. The doctors were facing decreasing reimbursements, coupled with the need to invest in equipment and information systems. "We were entering into an era," he said, "where we were having difficulty getting capital together to equip ourselves with the technology that was coming down the pike."
McGeehin said he was doing the same work in the same office with the same staff. The only difference is that he has more time to see patients.
Abington Medical Specialists, a 17-cardiologist group that says it provides 80 percent of the cardiac care at Abington Memorial Hospital, is embroiled in the kind of insurance-contracting headache that makes many doctors eager to give up private practice.
As of Jan. 1, the group's doctors are out-of-network for their 8,000 to 10,000 Aetna patients. The doctors say that Aetna hasn't increased reimbursements since 2006 and that they are paid well below national averages. The doctors and the insurer's offers remain far apart.
Marc Cohen, the group's managing partner, said the doctors have lost about 10 percent of their pay in the last two years, but remain committed to private practice. They still like making their own decisions and having the option of taking an afternoon off to watch their kids play sports.
"Like every other practice in the country, we have thought about being acquired or leased," Cohen said. "I guess we're still relatively fiercely independent."

Contact staff writer Stacey Burling at 215-854-4944 or