• improve work efficiency
• enhance patient satisfaction, and
• increase practice income.

Physician-owned outpatient cath labs are more efficient than inpatient labs, and can relieve the delay often experienced by patients scheduled for an elective diagnostic cath in a hospital lab. An outpatient lab schedule is not disrupted by acute MIs from the emergency room that can delay a scheduled elective case by hours. Similarly, an outpatient lab that is dedicated to elective diagnostic cases is never delayed by a complicated PCI or EP case. Therefore, the duration of cases is short and predictable. Efficiency results when the cardiology group, rather than the hospital, has control of hiring, staffing levels, and scheduling. Cath lab staff are more responsive to the cardiologist’s desire for a faster turnaround time because they are employees of the cardiologist, not the hospital. Cardiologist schedules are more predictable because the cases are all elective. A more predictable and efficient cath lab schedule results in greater physician satisfaction and productivity.

The American patient has come to expect personalized, convenient, and rapid service. In general, outpatient facilities can provide better customer service and amenities than hospitals, resulting in superior patient satisfaction. An outpatient lab relieves the bottleneck delay that stable outpatients experience in a hospital lab. Patient wait time is less and schedules for patients are more predictable, leading to greater patient satisfaction.

The shift to outpatient diagnostic cardiac catheterization is part of a larger migration of medical procedures from hospitals to outpatient settings over the past 20 years. This trend started with ambulatory surgery and renal dialysis centers, in which physicians typically participate as equity shareholders. In recent years, cardiologists suffered significant cuts in professional revenues. As a result, many cardiologists are motivated to capture the technical fee generated by the procedures they already perform. Having an outpatient cath lab can also help a group distinguish itself from other groups when trying to recruit new physicians into the practice.

The probable scenario is that outpatient facilities will gradually transform from diagnostic cath labs to therapeutic labs where peripheral interventions are performed. Many groups are unaware that as of January 1, 2005, Medicare began to reimburse for peripheral angioplasty in the outpatient setting. Due to the high prevalence of peripheral vascular disease, the aging of the population, and the twin epidemics of obesity and diabetes, the peripheral vascular disease market will continue to grow for the next two decades. As outpatient cath labs transition from diagnostic to therapeutic, CTA will help identify suitable candidates for peripheral interventions. Furthermore, if Medicare ultimately approves elective PCI for some patients in the outpatient setting, this will provide an additional growth opportunity for outpatient cath labs.

CT angiography will also identify patients with atherosclerosis that do not need revascularization procedures, but do require other services that can be provided by the practice and generate additional revenue, such as disease management and regular follow-up visits.

The American College of Cardiology/American Heart Association practice guidelines state that ad-hoc PCI should be individualized and not be a standard or required strategy for all patients. There are pros and cons to a staged approach (see table below).

The ultimate decision regarding which strategy is best for patient and cardiologist needs to be made on an individual basis. From a clinical perspective, there are advantages and disadvantages to either approach.

A: Your options for building an outpatient cath lab are to build 1) on your own, 2) in partnership with your local hospital, or 3) in partnership with a national company specializing in outpatient cath lab facilities (CCA). A summary of the benefits and risks of each approach is summarized in the table below.

A: Yes, if it makes sense strategically or in terms of establishing a critical mass, it is possible to bring more than one cardiology practice together to form a partnership to build an outpatient cath lab.

A: CCA will meet with key cardiologists and administrative personnel to identify preferences and agree on expectations with regard to design, equipment, staffing, scheduling, and clinical protocols. We develop an overall facility design with our cardiology partner and architect, negotiate with vendors, establish a timeline, then oversee the entire project development and communicate regularly with the practice to provide updates and receive input.

A: The partnership is organized as a limited liability corporation or equivalent (depending on applicable state regulations) and governed by a joint Board of Directors made up of partnering cardiologists and CCA representatives.

A: CCA is responsible for all cath lab management functions. We:

• Supervise cath lab management staff and assist the facility with both clinical and administrative operations
  
• Supervise billing and collections
  
• Provide monthly financial reporting to physician partners and present information at quarterly Board meetings
  
• Visit the facility on a regular schedule and on an as-needed basis to resolve problems
  
• Conduct periodic evaluations of facility and staff
  
• Identify and implement improvement opportunities regularly

A: CCA does not interfere with the clinical operation of the lab. CCA works with the cardiologists to implement their wishes regarding staffing, scheduling, types of catheters, and clinical protocols. The medical director of the lab is a member of the practice chosen by the practice.

A: Large cardiology groups have significant influence with hospitals, particularly when there is more than one quality hospital in a growing market, and such influence is often crucial when planning new clinical programs that compete with hospital services.

A physician-owned outpatient cath lab will ultimately benefit the hospital by identifying more patients in need of inpatient interventional procedures and cardiac bypass surgery as a result of increased volume of outpatient diagnostic cath lab procedures (resulting from more efficient operation of the outpatient cath lab facility). By allowing physicians to focus on providing outpatient services in the most patient-friendly and lowest-cost setting, the hospital will be able to focus on providing inpatient care for patients in need of acute care. In markets where cardiologists own an outpatient cath lab facility, it can be demonstrated that the entire market for inpatient and outpatient cardiac services grows. The referral of more patients to the hospital for coronary interventions and surgical procedures is good for the hospital. This is an example of a “win-win” scenario where patients receive optimal care in the most cost-effective and appropriate clinical setting. If desired by the group, the hospital can be included as a third partner in an outpatient cath lab joint venture.

A: CCA can navigate complex regulatory barriers to get a facility built. Expertise in overcoming regulatory hurdles to create an outpatient cath lab is required in most states, even when a CON is not required. Many cardiology groups have not built cath labs because they have been deterred by formidable regulatory complexity. CCA offers comprehensive experience dealing with CON, Stark, Stark II, Stark III, individual state anti-kickback legislation, and state quality rules.

Examples of the types of service that CCA can provide are:

• Petition a state attorney general to grant an exemption in their state anti-kickback law
  
• Petition a state regulatory agency to accept new and extrapolated interpretations of the rules based on the new ACC guidelines regarding where a cath lab can be located (e.g., redefine what constitutes a “hospital building”)
  
• Manage the need for CON with sophisticated financial management (i.e., manage costs below the threshold for filing a CON)
  
• Negotiate with the CON office to obtain waivers or favorable interpretations
  
• Introduce new legislation to remove old regulatory barriers that are not consistent with the most recent ACC/SCA&I Expert Consensus Document on Cardiac Catheterization Laboratory Standards and the precedent set by inpatient specialty heart hospitals
  
• Submit Medicare Carrier Application and Application for IDTF Certification
  
• Orchestrate timing of inspections for Certification by Medicare and State Department of Health
  
• Obtain accreditation from AAAHC (Accreditation Association for Ambulatory Health Care)

A: Here are ways in which a partnership with CCA can benefit a cardiology practice:

• CCA will lower a group’s risk of building its own cath lab by co-investing in the facility. This is an advantage when there is so much uncertainty about the future of the outpatient cath lab.
  
• As a long-term partner in an outpatient cath lab, CCA will provide capital to enable the group to acquire new expensive technologies (such as 64-slice CTA) for outpatient services as they become clinically relevant.
  
• Partnering with CCA to develop and manage ancillary services will substantially improve cardiologist efficiency in the cath lab and, by extension, the overall profitability of the practice
  
• Unlike a hospital partner, we have no competing constituencies: our sole focus is the on our shared outpatient cardiovascular services and our cardiology partners
  
• We have professional management resources that many groups do not possess
  
• Our partners have an opportunity to own equity in a private company before it becomes public
  
• Unlike other options for building a cath lab, with CCA you can maintain your ordinary practice income while start-up costs are incurred
  
• We have extensive experience in securing contracts with third party payers
  
• We are experts in building and regulatory experience
  
• Unlike a hospital partner, we are able to respond quickly to changes in the way cardiology is practiced
  
• As a national company, we have access to numerous groups around the nation for sharing experience and information
  
• For smaller groups, we can serve as an independent third party to facilitate the formation of a partnership involving multiple groups

A: Yes, we can form a joint venture with an existing lab by purchasing an equity interest based upon a multiple of the lab’s current financial performance. Payment to the practice for purchasing a portion of their facility is attractive to many groups who would like to reduce their risk of experiencing declining revenues due to the emergence of new technologies