How to assess a Cardiology practice opportunity?

Cardiac care is a $500 billion industry. This revenue is divided among hospitals, physicians, technology firms, pharmaceutical companies, insurance companies and their intermediaries,

and others.  On average, about 650 cardiologists are trained in the US each year.  Additionally, 10% of already practicing cardiologists decide to relocate.  Hence, in a given year, there are a number of cardiologists assessing practice opportunities nationwide for a “perfect fit.”  Most often, they depend on other cardiologists to help them decide whether an opportunity is worth consideration.   The adviser typically draws from his/her experience and may focus on avoiding or creating a similar situation for the advisee.   Such advice may be limited based on the experience of the adviser.  The only professional help that is sought/ available may be during contract negotiation.  The attorneys assessing these contracts, though experts at the legal language, have limited understanding of cardiology as a specialty and its unique demands, to effectively guide the candidate. Hence, most candidates are unprepared to appropriately assess the practice opportunity. In this white paper, we discuss hard and soft factors that may guide a candidate in assessing an opportunity and to be cognizant of the pitfalls.


The demographics:

No matter how well the other cardiologists in the community are doing, there is no getting around the demographics of the population of a given area.  There are about 26000 cardiologists in the US of which 60% are general cardiologist (average of 55 general cardiologists per million).  This means that a town of 25000 people (with a catchment area of another 75000) will most likely not be able to support a tenth cardiologist, no matter how well the other nine may be doing.  When there is a disparity between the town size and number of cardiologists actually needed to support a given population, it is wise to suspect that the candidate may be helping decrease the call burden for the other cardiologists but may not necessarily have enough volume to sustain a good income in the long run.  In a locale with such disparities, one typically notices a lower threshold to perform diagnostic testing and interventions to sustain enough productivity (typically measured in RVU’s).

It is critical to assess the demographic makeup of the town. Is it a predominantly older population? Who are the biggest employers? If the hospital claims to be the biggest employer of the region, that may signal a potential problem.  This means, there may not be enough other industries around to support any real growth and, hence, one may not have enough insured patients in the practice.



Check on how many cardiologists make up the group being considered and how many take call.  Sometimes, there may be more cardiologists, but they may not all be in the call schedule rotation.  Also, find out how many of them are going to phase out of the call schedule in the coming years.  It will help to have a clear understanding of the call schedule and expectations.  If a balanced lifestyle is important to the candidate, it may help to specify a maximum number of call days per month or a year in the contract.

It may be critical to find out how are the new outpatient consults being split among cardiologists.  If there is a couple of cardiologists who have much higher volume compared to others, figure out why that is.   “They are good” is not a satisfactory answer.  All of the providers are cardiologists and all attended medical school, cardiology fellowships, etc.  Are there other factors playing a role? Is there a systematic bias towards one or two providers, if so, why? Are these high volume cardiologists encouraging the candidate to join the practice or were they trying to dodge the issue? The candidate will do well ask a direct question as to whether the other cardiologists believe that there is enough patient volume to keep him/her busy.  Trying to gauge if any of the partners are apprehensive about it will be helpful.  Also, if one is being interviewed by a group of 7 cardiologists, one should expect to meet nearly all of them.  If the candidate is interviewed by only half of them it is worth coming back to meet the rest of the group.  In a larger group, of course, it may not be logistically feasible to meet all of them.  However, a subspecialist (eg. Interventional cardiologist) should expect to meet all the others from his subspecialty.  If not, one needs to be concerned.   Though these considerations may seem minor, answering some of these questions may lead one to understand the realistic patient volume that can be expected.  Also, figuring out if the other cardiologists are wanting to increase their volume?   If they are, is there a need for the new candidate?   Is there enough extra space in the office to see new patients? Are there areas nearby that need cardiology services?  Does the group have outreach program?  Will you be a part of it?  How often and how much travel is involved? What is the volume expected in these outreach areas? If one expects to see a good volume in the outreach clinics, meeting up with the VP of outreach programs may help understanding the lay of the land.


Though most candidates concern themselves with the workings of the group that is being considered, finding out the details of the other groups in town may shed light on the important aspects of the group interviewing.  How many other cardiologists are there in town? Do they share call? How is interventional call covered?  What are the politics between the groups in the area? Are there established referral patterns to the individual groups? What are the hospital’s views of the groups? Is there a group or groups employed by the hospital? Hospitals prefer increased volume of patients and procedures, regardless of the physician source.  However, they do prefer the source to be the physicians employed by them.  If the candidate is a sub-specialist, such as an Electrophysiologist (EP) or interventional, it is important to consider how the different cardiology groups interact with one another. Will the competing groups send patients to the new physician for subspecialty care or are they likely to refer elsewhere? Will the new physician’s practice be competing with his/her referral sources?  For example, if an EP is providing general cardiology care, the referring cardiologist may try to undermine the EP’s practice and refer elsewhere.  In such cases, the new EP may get relegated to general cardiology and the EP practice may never take off as expected.

Hospital compensation and salary guarantees:

Hospitals routinely attract candidates by offering good starting salaries (See Appendix below). This trend will continue to be true for the next couple of years in the industry, especially if the candidate is bringing a new skill set to the hospital.  Though hospital-owned cardiologists routinely have a higher take-home compared to those in group practice, in the long run, a candidate should consider that ongoing compensation over and above the professional fee collection should not be expected.  This is in part because it constitutes violation of Stark Law.  Hospitals are expected to regularly assess the fair market value to determine if you are being compensated beyond your professional fee collections.  Therefore, most hospital contracts have a clause to reassess the fair market value after the first year even when there is a multi-year “guarantee”.

So, how to figure out what is the true earning potential in a certain place in the long run?  Ask the hospital or the group about the minimum and maximum take home for the partners/ other employees.  If one is a subspecialist, ask for the previous subspecialists’ RVUs as well collections.  A hospital should be able to provide you with these numbers.  Based on these numbers and the Appendix below the candidate will get a good understanding of the earning potential.

In some cases, a hospital may not employ a physician directly but will support one or two years of a salary guarantee for a group employing that physician.  In these situations, please understand the contract and the terms of this financial support. Some hospitals will expect the physician to stay in the community for 1 additional year after the contract period for every year of salary support. This will mean that if the physician is not happy with the environment and decides to leave after the initial period, he/she may have to return some of the “salary.”  If the candidate is getting into this contract, they should remember that 30% – 50% of new fellows will leave their first group in the first 3 years.  Some hospitals support the salary through a “loan” system and it turns out to be similar to the above arrangement.

Other compensation related issues:

In a group practice, there are other issues to be considered while assessing the income potential.  If the income is dependent on collections, what is the typical insurance mix for the area and for the group specifically?  How are new patients assigned to providers within the group?  There are some groups (as unfair as it may sound) where all the insured patients go to the high volume providers!!!

Another compensation model is an RVU-based productivity model.  Here, the physician is paid per work RVUs produced (for basics of work-RVUs check out: (See Appendix below for average work RVUs produced by cardiologists nation-wide).  Typically, a hospitalist is paid $60 per RVU If the compensation offered is dependent on productivity, how is the productivity being evaluated – total RVUs for services performed or is it work RVU’s only?  What is the threshold RVUs that the physicians are expected to attain to meet their salary guarantees?  What are the consequences of not meeting the threshold?  What is the average monthly productivity (and what does it look like when assessed by CPT code) of the busiest provider in the practice?


The work day of a cardiologist is often determined by his work-flow in the hospital as well as the clinic.   What support staff is available to assist the new cardiologist?  Does every physician have a dedicated RN or a medical assistant assigned to his patients?  If not, will they be obligated to assist the other providers and if so, what are the expectations of time appropriation?  Are there mid-level providers assisting with hospital work?

How is the time in the cath lab distributed among the various cardiologists in the hospital? What is the mechanism if a certain case is delayed?

No matter whether considering a group practice opportunity or a hospital based employment, it is important to understand the expectations in terms of coding for services performed?  Does the practice/hospital employ a certified coder?  Will this coder meet with physician to review documentation on a regular basis?  Even with a fully operational EMR system, this can be essential.


Most candidates detest the idea of meetings.  However, it will serve one well to recognize that some critical decisions are made at meetings which can disrupt one’s practice.  It is important to understand the structure of the administration. How often are business/partnership/service line meetings held?  Do all the cardiologists have a voice in the operations or is there a board that makes practice/operational decisions?  At what point will the new physician have a vote?

While reviewing an independent group practice, a candidate should ask about the ratio of debt to assets?  Is there a cash reserve for new equipment purchases and/or how does the practice consider capital expenses?  How does the practice manage its accounts receivable? Is it in-house or outsourced?  What is the average number of days it takes the practice to collect on a service one performs?   What percentage of the total accounts receivable are over 60, 90, and 120 days old?

Over time, most cardiologists realize that the community they serve matters to them.  It is important to be in-sync with the mission of the organization one is considering.  If the stated mission, as well as the practice’s mission match one’s philosophy, one is bound to be happy being a part of the community as well as the organization.   Candidates should find out what is the organization’s mission statement?  Do they have a continued interest (and do they demonstrate it) in the community?  Do the colleagues/ potential partners contribute to the community?  Are they a part of it?   How do you see yourself contributing towards this goal in the short and long term?


Remember, no employment situation is perfect.  There are day to day frustrations of all employment opportunities.  However, one will do well to understand the strengths and weaknesses of the potential employment while making a decision.  Though, candidates, especially fellows fresh out of training, need to and do focus inordinately on the pay, most of the day to day frustrations are not necessarily money related.  They often occur due to problems of work-flow or poor interaction with colleagues and staff.   The practice of Medicine is enjoyable if, in addition to being valued financially, one is working with like-minded, fair colleagues in a positive work environment with opportunities to grow and succeed.


Cardiology services and RVUs associated

Patient evaluation RVU*
New consult level 3 1.88
New consult level 4 3.02
New consult level 5 3.77
New office visit level 3 1.42
New office visit level 4 2.43
New office visit level 5 3.17
Established patient visit level 3 0.97
Established patient visit level 4 1.50
Established patient visit level 5 2.11
In-patient new consult level 3 2.27
In-patient new consult level 4 3.29
In-patient new consult level 5 4.0
In-patient initial care level 2 2.61
In-patient initial care level 3 3.86
Subsequent in-patient care level 3 1.39
Subsequent in-patient care level 4 2.0
Hospital discharge 1.9
Initial observation services level 2 2.14
Initial observation services level 3 2.99
Subsequent observation services level 2 0.96
Subsequent observation services level 3 1.44
Discharge from observation 1.28
Same day hosp. admit/DC level 2 3.41
Same day hosp. admit/DC level 3 4.26
Critical care initial 30 min 4.5
Critical care each additional 30 min 2.25

RVUs for cardiology procedures

Procedure RVU*
Echo interpretation 1.30
EKG interpretation 0.17
Dual chamber PPM implant 8.77
ICD implant 15.17
EP study 11.57
RF ablation 16.23
Left heart cath 5.85
PCI 10.96
Thallium 1.46
TEE 2.2
Stress echo 1.48

RVUs are approximations and may change from year to year

Median cardiologist incomes* (approximation)

National Hospital


Group practice Northeast Midwest South West
Non-invasive 425000 460000 370000 350000 470000 450000 440000
Invasive 475000 550000 375000 425000 530000 510000 350000
EP 525000 600000 470000 475000 600000 575000 450000
Interventional 525000 590000 475000 460000 580000 610000 440000

Median cardiologist work RVUs * (approximation)

National Northeast Midwest South West
Non-invasive 6500 5500 6500 8800 6200
Invasive 8500 8600 8700 10000 6500
EP 11500 11000 9500 13500 9500

Recommended checklist for Cardiologists interviewing for job

How many Cardiologists are in the group?
How large in the town?
Are there other competing hospitals or groups?
How large is the catchment area?
Who are the big employers locally?
What is the percent of elderly (>60 years) constitute the area?
Do all cardiologists in the group take calls?
What is the call frequency?
How is the weekend call schedule structured?
How is the outpatient volume distributed?
Is the patient volume distribution within the group lop-sided?
Did you meet all the cardiologists? (in a small group)
Did you meet majority of senior cardiologists? (in a large group)
Did you meet all your sub-specialty colleagues?
Did everyone seem optimistic about your patient volume?
Did you discuss outreach program?
Are there other groups in town?
How is the interaction between groups?
Is one of the group owned by the hospital?
As a sub-specialist, will you see referral from other group?
What is the salary guarantee?
Is the “guarantee” subject to restructuring before end of guarantee period?
What is the penalty for early termination of employment?
What is the target RVU to earn the full guarantee?
What is the range of take home for the cardiologists not on guarantee?
How many RVUs were generated by previous subspecialist?
How many cardiologists have left the area/group/hospital in past 5 years?
How many support staff (RN, MA) etc. will be dedicated to your practice?
Is there support mid-level staff helping in the hospital?
How is the cath lab/ EP lab time distributed among various cardiologists?
What if there is a delay in cardiologist showing up for his case?
Does the group/hospital have certified coder?
Is your coding going to be reviewed periodically?
How frequently are service line/group meeting held?
Does everyone have a vote?
How long before you have a vote?
In group practice, what is debt to asset ratio?
Is there a cash reserve for capital expense?
Is the group/hospital’s mission in-sync with your goals?
Is the group well integrated into the community?
Do other cardiologists contribute to the community?