In November 2024, CMS finalized a 2.83% cut to the physician pay schedule for 2025, the fifth consecutive year that physicians have faced a pay cut from the agency.
Beyond that, supply and labor costs remain high due to a number of economic factors, including inflation. The median total direct expense per physician was about $1.1 million for Q4 of 2024, up 1.4% from Q3 and jumping 6.8% from the same time last year, according to data from Strata Decision Technology, which analyzed data from more than 135,000 physicians.
But a model to support independent physician practices has some thinking more optimistically about the transition to independent practice.
Carolanne O’Sullivan is the regional vice president of operations for CardioOne, a Houston-based, cardiology-focused management services organization that supports both existing independent and employed cardiologists looking to transition to private practice. It also provides ongoing infrastructure support to its partners, specifically in IT, revenue cycle management, benefits administration, finance and credentialing through a master services agreement.
Ms. O’Sullivan manages CardioOne’s operations in New Hampshire, and has overseen the development of nine-physician group Cardiovascular Specialists of New England.
CardioOne does not acquire, own or employ any of the practices it works with. Rather, it partners with groups of cardiologists to support every other aspect of starting a business, from finding real estate to securing funding and helping them grow.
Ms. O’Sullivan worked with this group of physicians for 20 years in the hospital setting and has a breadth of experience working with system-owned physician enterprises.
CSNE, with the support of CardioOne, was able to launch their physician practice in under a year, Ms. O’Sullivan said. She added that there was a strong sense of engagement and commitment among the physician group prior to their partnership with CardioOne, which was central to the success of their collaboration.
“Having been in this business for 35 years, I love the CardioOne model, because it provides the best of both worlds,” she said. “It provides the physicians with the ability to deliver the care the way that they philosophically believe it should be delivered, with infrastructure and support so that they can focus on that.”
She said the key to the success of this model is an embrace of physicians’ autonomy — particularly in an evolving specialty like cardiology, where an increasing number of procedures can now be performed in the outpatient setting.
“It’s a daunting thought to stand up an independent medical practice, because there’s so much to it. When you think about electronic medical records, billing, human resources, management and administration, compliance, there’s just a lot,” Ms. O’Sullivan said. “Finding models, and there’s an increasing number of them, that assist physicians in doing that while still giving them control over how they provide care to their patients … that’s really taking hold, and it’s very attractive to physicians.”
As the relationship between hospitals, health systems and physician practices evolve, these models have the potential to benefit all parties involved — all while forwarding positive care experiences and outcomes for patients.
“Finding that common ground and that win-win situation is the best way for patients to get the outpatient care when they need it, and get the inpatient care when they need it, in a way that is cost effective for both,” she said. “And that’s something that the payers are also very interested in, as we need to lower the cost of health care in our country.”
