JOHNSON CITY, Tenn. (WJHL) — It’s about the patients. That’s Karing Hearts Cardiology CEO Dr. Jeff Schoondyke’s stated rationale for a now successful effort to gain permission for a freestanding cardiac catheterization lab in Johnson City.

Karing Hearts succeeded in gaining a certificate of need for a standalone cath lab in a hearing on Sept. 28, before Tennessee’s Health Facilities Commission (HFC).

Schoondyke discussed with News Channel 11 the application, the plans and his hopes that eventually the cath lab coexists with Ballad Health’s cardiology operations. The hospital system, which runs Johnson City’s only cath lab at Johnson City Medical Center (JCMC), actively opposed the certificate of need application.

Dr. Jeff Schoondyke, founder of Karing Hearts Cardiology. (WJHL photo)

News Channel 11 also reached out to Ballad, where officials said they preferred to stand on their reasons for opposition stated in the hearing and a brief statement released Sept. 28.

Schoondyke answered questions about some of the reasons that Ballad and ETSU Physicians, which also opposed the application, presented in their arguments. And he continued to insist, as he has since announcing an interest in establishing the facility, that it will benefit consumers and won’t be dangerous to patients or involve so-called “cherry picking” of patients with more financial resources.

“I think the insinuation that we are solely based on financial gain is absolutely false,” Schoondyke said. “We serve every patient regardless of their insurance, whether they are underinsured, overinsured or no insurance.”

He said he’s never turned a patient away due to lack of insurance or underinsurance and added that Karing Hearts supports all the charity care efforts in the region including Project Access, which wrote a letter supporting the application.

Schoondyke said two primary benefits will result from the one-lab facility Karing Hearts hopes to open at its existing headquarters in early 2024. The first is access. Some of the impetus for Karing Hearts’ application lay in what Schoondyke and other doctors have complained is an ongoing issue with low availability and staffing at JCMC’s cath lab.

“First and foremost it’s going to be access,” he said. “There is an access problem for a number of reasons.”

Schoondyke said the second is nearly as important: that patients receiving catheterizations at the freestanding facility will save a significant amount of money compared to the existing options.

“We can significantly reduce each patient’s cost, not just for cardiac catheterization but for many of the procedures that we do including device implants like pacemakers or defibrillators,” Schoondyke said. “There’s a lot of things that each and every time they step foot in our lab they will save money, a significant amount of money, and I think that’s good for consumers.”

He said the catheterization charges are likely to be about 50% below hospital-based costs and that the device data “is similar if not more.”

Ballad argued that the project would actually cause additional patient expense, noting that 25% of Karing Hearts cath patients “also need an interventional procedure” like a stent. It said that in such cases, patients who had to be transferred from Karing Hearts would pay more than they currently do — $975 in the case of Medicare payments — in what it called “completely avoidable and unnecessary costs with no value to the patient or payor.”

Schoondyke said that argument discounts all the other procedures that would save patients money. He also pushed back at the notion that a Karing Hearts lab would put patients at risk and pointed to the rising number of standalone cardiac cath labs that are being opened around the country.

“There will be patients that need a PCI (stent requiring hospital treatment),” Schoondyke said. “But our goal is to limit that number quite significantly because the patients that need a cath in the hospital who have high risk findings that will likely need a PCI, we will send them to (JCMC’s cath lab) preferentially.”

The hospital system also presented data showing what it said indicated a higher number of cath procedures performed by Karing Hearts doctors than comparable cardiologists in the region, including a higher number of so-called “clean caths” that don’t reveal heart disease.

Schoondyke said Ballad didn’t give his team access to the data they used but said he didn’t agree with it.

“They didn’t define what they thought a normal cath was,” he said. “A normal cath is something that, you may have a 50% blockage. It doesn’t require PCI. Are they saying a normal cath is a normal cath with absolutely no blockage, or is it not requiring a stent? Those are two very different (patients).”

A table in the HFC staff report to the board showed proposed Karing Hearts charges for a variety of cath lab procedures in comparison to JCMC. Year one charges, which were slightly higher than year two, were well below JCMC’s for most procedures.

Six types of caths listed all showed gross charges of $3,048, for instance. JCMC’s gross charges ranged from a low of $8,985 for a standard right heart cath, to more than $20,000 for several of those procedures.

Pacemaker insertions were $17,098 at Karing Hearts (first-year proposed) versus $26,277 at JCMC. Karing Hearts projected 64% of its revenue will come from Medicare, TennCare and Medicaid and 26.1% from more traditional private insurance. Those figures are similar to Ballad’s payor mix.

“They did not challenge our cost data,” Schoondyke said. “Never. We put up there the cost of them and the cost of us. Zero response to it. It’s factual. Saving consumers money will happen. I don’t think that’s a fact that any hospital organization can deny. Everyone knows an outpatient service is markedly less money.”

Ballad is not alone in grappling with moves to increase the availability of non-hospital-based care in cardiology and other areas that were once dominated by hospital outpatient surgery departments (HOPDs).

A March 2022 analysis by Moody’s Analytics said that the Centers for Medicare and Medicaid Services (CMS) has moved more orthopedic and cardiac procedures from inpatient-only to the option of HOPDs or ambulatory surgery centers (ASCs), which is what Karing Hearts’ center will be.

The Moody’s analysis says the use of ASCs “will continue to grow, crimping hospital revenues and margins. Payers are promoting them as more cost-effective care settings…”

It specifically mentions orthopedic and cardiac procedures. Even at the lower rate paid to a hospital-based outpatient department, that outcome is better for hospitals than losing the cases entirely to ASCs. As the study notes, “the shift to an ASC would typically be even more significant” than lost revenue by shifting from inpatient reimbursement to the hospital’s own cath lab, for instance.

Schoondyke argued that a freestanding cath lab won’t be significant enough a revenue hit to Ballad to justify denying a certificate of need when the main data criteria the HFC reviews were met, which they were.

“They heard a lot of testimony back and forth from both sides and I think they did a fantastic job of weighing it,” Schoondyke said. “Ultimately there are criteria that you have to meet to gain a certificate of need. If there wasn’t a need…I think that our application would have fell short.”

Ballad CEO Alan Levine has argued that when Ballad opposes certificate of need applications, which it has been able to do since the COVID pandemic began, it’s been for good reasons and because approval would result in a loss for the region’s overall healthcare and for consumers in the long run.

“Ultimately I’d really like a relationship with Ballad that would benefit both of us but at the same time mostly put the patients first,” Schoondyke said. “I hope in time this is in the rearview mirror because it’s not about us, it’s about the patients.”