December 2012
The
Radiology
100
The Fifth Annual Ranking of the 100 Largest Private Radiology Practices by FTE Radiologists
page 27
Featured in this issue
Future Tense: Radiology’s Clinical Path Ahead page 16 Regulatory Landscape: The 8 Top Legal Issues of 2012
page 35
Equipment-service Options: Total Cost of Ownership page 44
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December 2012
The
Radiology
100
The Fifth Annual Ranking of the 100 Largest Private Radiology Practices by FTE Radiologists
page 27
Featured in this issue
Future Tense: Radiology’s Clinical Path Ahead page 16 Regulatory Landscape: The 8 Top Legal Issues of 2012
page 35
Equipment-service Options: Total Cost of Ownership page 44
www.imagingBiz.com
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CONTENTS
December 2012 | Volume 5, Number 6
16
Features
16 Future Tense: Radiology’s Clinical Pathway
By Cat Vasko
Pioneering radiologists envision a future in which specialties collaborate to make personalized, predictive medicine possible.
27
The 100 Largest Private Radiology Practices
As volumes flatten and practices trim costs, size emerged as a differentiator in 2012.
35
Navigating the Regulatory Landscape: The 8 Top Legal Issues of 2012
Eight key legal issues emerged in 2012, both complicating and simplifying the regulatory landscape.
44
Equipment Service: Total Cost of Ownership
Service could be the last frontier where imaging managers can reduce costs.
54
Practicing Radiology In the 21st Century
Radiologists today have multiple practice options, but jobs are scarce, and salaries are dropping.
By Cheryl Proval 27
By Rich Smith
By Sheila Sferrella, MAS, RT(R), CRA, FAHRA
35
By Joseph Dobrian
4 Radiology Business Journal | December 2012 | www.imagingbiz.com
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CONTENTS
December 2012 | Volume 5, Number 6 Publisher Curtis Kauffman-Pickelle · ckp@imagingbiz.com
8
Departments
EDitor Cheryl Proval · cproval@imagingbiz.com Art Director Patrick R. Walling · pwalling@imagingbiz.com
AdView
What Is a Radiology Practice?
10
The Bottom Line
Technical Editor Kris Kyes
By Cheryl Proval
Associate Editor Cat Vasko · cvasko@imagingbiz.com Online Editor Lena Kauffman · lkauffman@imagingbiz.com
Huge Effort and Extraordinary Results: Interventional Radiology’s Official Recognition By Marshall E. Hicks, MD, FSIR
12
Contributing Writers Joseph Dobrian; Marshall E. Hicks, MD, FSIR; Sheila Sferrella, MAS, RT(R), CRA, FAHRA; Aalap Shah; Rich Smith
Priors 12 Digital Health | Health IT for Patient–Provider Connection 14 Marketing | Connecting With Patients, Search by Search
Associate Publisher Sharon Fitzgerald · sfitzgerald@imagingbiz.com
By Aalap Shah
62
Advertiser Index
64
Final Read
News Editor Thanh Le · tle@imagingbiz.com
Production Coordinator Jean Lavich · jlavich@imagingbiz.com Webmaster Robert Elmquist · relmquist@imagingbiz.com
What I Learned at Pearl Harbor By Curtis Kauffman-Pickelle
12
44
Corporate Office imagingBiz 210 W. Main St., Suite 101 Tustin, CA 92780 (714) 832-6400 www.imagingbiz.com PResident/CEO · Curtis Kauffman-Pickelle VP, Publishing · Cheryl Proval VP, Administration · Mary Kauffman
Radiology Business Journal is published bimonthly by imagingBiz, 210 W. Main St., Suite 101, Tustin, CA 92780. US Postage Paid at Lebanon Junction, KY 40150. December 2012, Vol 5, No 6 © 2012 imagingBiz. All rights reserved. No part of this publication may be reproduced in any form without written permission from the publisher. POSTMASTER: Send address changes to imagingBiz, 210 W. Main St., Suite 101, Tustin, CA 92780. While the publishers have made every effort to ensure the accuracy of the materials presented in Radiology Business Journal, they are not responsible for the correctness of the information and/or opinions expressed.
Please address all subscription questions to Jean Lavich at jlavich@imagingbiz.com.
6 Radiology Business Journal | December 2012 | www.imagingbiz.com
AdView What Is a Radiology Practice? Let’s get existential
E
very year, when we produce the ranking of the nation’s largest private practices, we are reminded of the contributions that radiology makes—not just to the health of the nation, but also to its economy. For a number of reasons, the profession has fostered many large and exceedingly complex organizations that employ—in the case of Radiological Associates of Sacramento in California—up to 900 people. From the interpretation of as many as 2 million procedures a year to the processing of a multitude of relatively small claims to the ownership, management, and maintenance of advanced medical technology and IT, radiology practices can be highly complex— and increasingly regulated—businesses. They employ small armies of technical, operational, and support personnel. To define a radiology practice, we begin with this: A radiology practice can be an economic force in its community. As we step farther into the pond, however, the waters become increasingly murky. When we began the rankings, five years ago, with partner CliftonLarsonAllen, we defined the private radiology practice as a PC or LLC, the traditional practice model for physicians of all types. Such companies typically distribute all earnings at the end of the year, save the amount needed to pay the January bills. Our intention was to include only those practices that performed the full range of services that a practice traditionally provided: interpretations as well as onsite consultation, special procedures, and participation in tumor boards and other medical-staff activities in the hospitals that they served. Over the intervening years, however, we have been increasingly pressed to make an absolute distinction between the private practice and the teleradiology company. As both practice models evolved, we successively refined the private-practice
definition, one year specifying that a practice could not be teleradiology only, and this year requiring that the practice be wholly owned by the radiologist partners, with no outside investors.
The Lines Converge The largest private practices are highly complex organizations, with many moving parts and with sizable economic impacts on their respective communities. The best of them have adopted corporate governance models and employed sharp nonphysician executive leaders to manage the financial, operational, and human-resource sides of the business. Many of these practices also operate management-services organizations (MSOs) through which they market their expertise in billing and IT. This year, we asked survey respondents whether they operated MSOs, and almost half of them said yes. While more than half of the responding practices in the largest size category acknowledged that they operated MSOs, a significant percentage of practices in each size category owned MSOs, effectively corporatizing—to some degree—these private practices. Over the past five years (the past decade, really) private practices adopted distributed reading solutions, increasingly using teleradiology to expand their geographic reach and maximize the efficiency of their subspecialized partners. During those same five years, we watched some of the largest teleradiology companies transition from nighttime-only coverage to daytime coverage, many gaining the ability to put feet on the street as they competed with private practices for hospital contracts (initially, in underserved rural areas). Some sophisticated teleradiology companies are growing through alignment with private practices: The teleradiology company provides IT infrastructure and services support and the practice provides teleradiology interpretations, in addition to providing full-service radiology to its local hospital clients.
8 Radiology Business Journal | December 2012 | www.imagingbiz.com
Looking Ahead Five years ago, perhaps we unconsciously exercised a bit of protectionism in excluding teleradiology companies from the ranking. The specialty appeared vulnerable, back then, with limited ability to compete with well-funded corporate entities that could speak the language of hospital administrators who were trying to cut costs. Today, the radiology marketplace is a changed place, and large practices are better equipped to compete toe-to-toe with the large teleradiology companies. In his introduction to this year’s report (page 29), Joseph P. White, CPA, MBA, postulates that we may have reached the tipping point— and (perhaps) the advent of the national radiology practice. Another article in this issue features representatives of private, academic, multispecialty, and teleradiology practices discussing the marketplace and their respective practice models (page 53), and no one disputes that teleradiology is one of them. One of the most progressive practices that I am aware of, Advanced Diagnostic Imaging, PC (Nashville, Tennessee), number 63 in this year’s ranking, just announced a joint venture with a teleradiology company that has backing from Health Evolution Partners, a private-equity company formed by David Brailer, MD, PhD, when he left his position as the first National Coordinator for Health IT to invest in the global health-care industry. What is a radiology practice? Clearly, there are many varieties of the practice, and next year, there may be even more. This year, we added a list of the eight largest radiology practices in the nation (including private, academic, and teleradiology practices), calling them the big eight. At the suggestion of publisher Curtis KauffmanPickelle, look for the big eight to be counted in the Radiology 100 list next year. I wish you the best of health and continued success in 2013.
Cheryl Proval cproval@imagingbiz.com
The Bottom Line
Huge Effort and Extraordinary Results: Interventional Radiology’s Official Recognition
A
fter countless hours and almost 10 years of Herculean effort from Society of Interventional Radiology (SIR) members and the American Board of Radiology (ABR), the American Board of Medical Specialties (ABMS)—the organization that oversees the 24 recognized medicalspecialty boards—approved the ABR’s application for a dual primary certificate in interventional radiology and diagnostic radiology. This action sent a clear signal that the interventional-radiology skill set is a unique combination of expertise in imaging, technology, and patient care. It affixes a publicly visible imprimatur on the specialty, ensuring that it will receive the recognition (from peers, legislators, and the public) that it so richly deserves. The ABMS announcement comes after significant behind-the-scenes activities by dedicated individuals, both within and outside SIR, who have worked to promote training and professional education as distinct to the specialty—and of paramount importance to the delivery of expert patient care. Indeed, after a prior application for a single certificate in interventional radiology was rejected in 2009, John A. Kaufman, MD, FSIR, chair of the SIR/ABR Dual Certificate Task Force, led members back to work on a new application. As interventional radiology becomes an increasingly complex discipline, it makes sense for its training to remain rooted in radiology, leading to the application for a dual certificate in diagnostic radiology and interventional radiology. This new certificate will provide all future patients with an ample supply of well-trained interventional-radiology specialists and will ensure that boardcertified interventional radiologists are trained and qualified to deliver nothing less than the highest level of care. The inclusion of periprocedural
care as an integral competency (along with interventional radiology’s technical and imaging competencies) reinforces this action. The new dual primary certificate in interventional radiology and diagnostic radiology will be the fourth primary certificate for the ABR and the 37th overall in the United States. The other three ABR certificates are in diagnostic radiology, radiation oncology, and medical physics. Moving to a primary certificate, as opposed to a subspecialty certificate, designates interventional radiology as a unique and distinct area of medicine, rather than an area of focus within an existing specialty. This elevation to a specialty level, with its own distinct residency program, places interventional radiology/diagnostic radiology on the same level as surgery, pediatrics, and internal medicine in the ABMS hierarchy.
What’s Next The ABR will seek the approval of the Accreditation Council for Graduate Medical Education (ACGME) for accreditation of interventional-radiology residency programs. Once ACGME approves the plan to accredit programs in the new specialty, the Diagnostic Radiology Residency Review Committee will draft the residency training program’s requirements. These will be subject to a public comment period of 45 days and will then be reviewed by the ACGME Committee on Requirements. Once approved, programs can begin to apply for accreditation. It is unlikely that even the earliest programs accredited will be able to enroll any interventional radiology/diagnostic radiology residents before July 2015. Even after all of these steps, the process of conversion of vascular and interventional radiology fellowships to interventional-radiology residencies will take several years. All existing vascular and interventional radiology subspecialty certificates will
10 Radiology Business Journal | December 2012 | www.imagingbiz.com
by Marshall E. Hicks, MD, FSIR
be converted to interventional radiology/ diagnostic radiology primary certificates through a special maintenance-ofcertification pathway to interventional radiology/diagnostic radiology certification. Partly as a result of this pathway and partly as a result of future newly minted interventional-radiology residency graduates obtaining interventional radiology/diagnostic radiology certification, several years from now, the vascular and interventional radiology subspecialty certificate will cease to exist. Patients benefit from well-trained specialists, and only one credential should become the new standard: the interventional radiology/diagnostic radiology certificate. Although we will not get there quickly, or all at once, we must remain committed to getting there. The joint SIR–ABR task force that developed the dual primary certificate in interventional radiology and diagnostic radiology was a true collaboration between radiology’s two branches—diagnostic and interventional—in the fullest sense. The task force noted that although it was the specific qualities of interventional radiology that prompted the SIR and ABR decisions to apply for primary specialty status, competency in diagnostic imaging is of great benefit when using imaging to guide an intervention. I would be remiss if I did not note that this would not have been possible without the dedicated volunteers on the task force and from the ABR, the combined leadership of both societies, and many more members and staff too numerous to mention. Many associations, representing all branches of organized radiology, supported the effort.
Marshall E. Hicks, MD, FSIR, is president of the Society of Interventional Radiology and head of the division of diagnostic imaging at the University of Texas MD Anderson Cancer Center, Houston.
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{priors} d i g i ta l h e a lt h
Health IT for Patient–Provider Connection
D
igital health care gives patients a new opportunity to engage with their care providers on an unprecedented scale. With the electronic exchange of health information, consumers can access their medical records electronically, share them with providers, and make informed decisions. These advances in health IT make possible better consumer engagement, as well as more efficient and effective care. On October 17, 2012, Lygeia Ricciardi, acting director of the Office of Consumer eHealth at the Office of the National Coordinator (ONC) for Health IT, laid out the agency’s plan to increase patient engagement through health IT during a virtual briefing1 from the Health Information and Management Systems Society. Ricciardi presented “eConnecting With Consumers: Provider/Patient Engagement Through Health IT” as part of the briefing. Under HIPAA, she says, everyone has the right to access his or her medical records, but traditional paper access can be slow, cumbersome, and expensive. With a digital platform, access is quick and convenient, and it allows consumers to interact with their health data in new ways. The ONC sees the expansion of health IT as the perfect opportunity to engage consumers in health promotion. According to statistics presented during the event, consumer engagement reduces hospital readmissions, medical errors, and the health consequences of poor communication. The OpenNotes program,2 sponsored by the Robert Wood Johnson Foundation, allowed patients to look at their records and physicians’ notes online. The result was positive: 60% of patients improved their medication adherence, and 99% wanted to continue beyond the study. Physicians were initially reluctant, but 100% chose to continue, in the end. These findings
led the ONC to conclude that consumer engagement equals better care. From that premise, the ONC presented its Three As (access, action, and attitudes), a plan addressing consumer engagement using technology. The plan expands electronic health records (EHRs) through meaningful-use incentives, enables consumers to interact with their health data electronically, and promotes awareness of these new tools for consumers. Access According to Ricciardi, 90% of patients want access to their information electronically, and two out of three people consider switching to a physician who offers access to medical records online. People want access to their patient records, and widespread EHR adoption will make electronic access possible. Consumer engagement has been incorporated into meaningful-use requirements by establishing the necessary infrastructure for online data exchange, Ricciardi notes. Between 2008 and 2011, meaningful-use–driven adoption of EHRs by office-based physicians doubled.
12 Radiology Business Journal | December 2012 | www.imagingbiz.com
Stage 1 of meaningful use requires electronic access to health information, clinical visit summaries, and tailored educational resources. Under stage 2, the ONC is pushing for more data flexibility, so that patients will be able to view, download, and share their medical information (in addition to plugging it into third-party apps), with the goal of giving consumers ownership of their data. In addition, stage 2 calls for secure messaging channels between patients and providers. The ONC wants to expand its Blue Button program to include the general health-care consumer. Currently, more than a million veterans use Blue Button to access their medical data with one click. Information is downloaded into a text file that contains medication lists, conditions, and basic demographic information. With help from the Presidential Innovation Fellows program, Ricciardi says, the ONC hopes to expand those numbers by millions. The ONC is also mobilizing the community through Blue Button pledges, a loose coalition of organizations that have pledged participation in the
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program. There are two types of pledges: data holders (hospitals, providers, and payors holding patient data) and others that are not data holders (consumer organizations, employers, and technology developers). The program was launched in 2011, with 30 organizations on board initially, but that number has ballooned to over 400, ensuring compatibility across data holders and the development of new apps and tools by others. Action and Attitude The ONC will encourage the development of tools and apps to help patients make choices about their health outside the physician’s office, and it will run a series of challenges to encourage the development of apps for the medical data on Blue Button. These can include comparisons with national datasets and medical-product comparisons. For instance, the ONC has proposed a system (inspired by food labels) where
practices can be compared on their privacy policies at a glance. Patients can see how their medical information will be stored and shared by practices. A radiologyspecific app might cause a reminder for a woman’s annual mammogram to pop up on her smartphone, for example. The Healthy Apps Challenge supports development of third-party apps that can use data for modeling healthy behaviors. These apps cover a broad spectrum of apps in categories such as fitness/exercise and nutrition. Apps are judged on the degree to which they are usable, evidence based, innovative, and fun. For the health-care system to become more effective and efficient, patients will need to take responsibility for their care; to that end, the ONC is running an online awareness campaign to inform consumers about these new technologies through animated videos posted on its consumer website (www.healthit.gov). The goal of these videos is to motivate
others and inspire them to use technology to improve their health. Digital health care offers the potential for a new level of intimacy between providers and patients, Ricciardi believes. Health IT will continue to play a bigger role in the future as ongoing payment reform emphasizes efficiency and more effective care. While digital health care will be challenging for providers, patients, and hospitals, opportunities will also abound. —Thanh Le References 1. Government health IT & policy driven healthcare transformation: A HIMSS virtual briefing. http://www.himssvirtual. o rg / V B / 2 0 1 2 1 0 1 7 _ V B _ G H I T. a s p . Published October 17, 2012. Accessed November 8, 2012. 2. Delbanco T, Walker J, Darer JD, et al. Open notes: doctors and patients signing on. Ann Intern Med. 2010;153(2):121-125.
marketing
Connecting With Patients, Search by Search
I
by Aalap Shah
n today’s health-care landscape, how can you expand your volume in the face of falling reimbursements, competition from larger health-care systems, and increasingly complex regulations? How do practices, imaging centers, and radiology departments increase revenue and margins—and address the challenges of patients’ tight budgets? One powerful way is the use of a payper-click tool (such as Google AdWords or Bing Ads), which can drive patients’ behavior and increase margins and volume. Pay-per-click advertising can translate into increased revenue because ads can be configured to be displayed within selected geographic zones, at predefined times, and in conjunction with narrow or broad search terms. Prices for keywords (search terms that patients use to find your business) depend on their popularity and market size; they can range from a few cents to several
dollars. Clicks typically cost an average of a dollar or less, but this is contingent on your local competition, how your search campaigns are structured, and how relevant the landing page is to the search term on which you are bidding. Why use paid-search methods to drive Web traffic? Are those patients truly searching for you? According to a 2009 study,1 86% of patients research health-care choices using the Internet, and 81% have clicked on sponsored links. It’s even more important that 20% of health consumers search for healthrelated information on their mobile devices. With growing reliance on mobile computing and smartphones, pay-perclick advertising is an opportunity to influence patients as they search for nearby imaging centers. While your patients might continue to be referred to specific imaging facilities (or provided with a list of facilities)
14 Radiology Business Journal | December 2012 | www.imagingbiz.com
by their physicians, you now have the ability to disrupt this cycle via sponsored ads and search tactics. How is this possible? The hypothetical patient, upon receiving a referral for imaging, would typically search for this information prior to scheduling an appointment: Is the facility in my insurance network? How far is it from home or work? What types of reviews has this facility received? Will I be able to schedule a convenient appointment? Through paid-search methods, a facility has the opportunity to interject itself into the sales cycle, capture prospective patients, and redirect them. Building the Campaign Pay-per-click advertising works in three key ways. First, you may bid for targeted keywords that describe your business, such as open MRI, CT scan, or Chicago. Second, you may bid or place an ad on blogs and content networks that
your target consumer might read often, such as a hometown newspaper’s website or a popular local blog. Third, pay-perclick advertising with phone links allows patients searching for the nearest imaging center using their mobile devices to call you with just one click.
is driving traffic to your practice. Many imaging centers choose to assign their business accounts to an internal marketing manager or outsource the work to an outside pay-per-click specialist. Though pay-per-click campaigns require dedicated time and
A medium-sized imaging center offering MRI, CT, ultrasound, and radiography in the Midwestern United States used pay-per-click advertising to increase its patient base by more than 150%. Once you set up a pay-per-click account, you can buy targeted ads by location, keywords, and other criteria. The key opportunity is to create specific campaigns built around themes. For example, one theme might be self-pay rates and might include keywords such as low-cost MRI, low-cost imaging, cash rates for MRI, cheap MRI, and related phrases. A campaign built on these keywords would then drive traffic to a specific page on your website that would discuss your self-pay options and invite the patient to call. An alternative approach is to display your ad when patients are looking for your competitors. For example, you can build an ad group that will ensure that your ad will show either above the natural search results and/or on smartphone map apps every time a prospective patient searches for a direct competitor. While there are many types of search campaigns with a multitude of options, other factors to consider are your budget and the amount of time/resources you can dedicate to managing this tool. Any pay-per-click tool requires time and effort to manage. Not only are you selecting keywords and creating ad copy, but you are also creating related landing pages and specific calls to action. Another consideration is the time it takes to analyze each campaign to see whether pay-per-click advertising
effort, results are compelling. The sheer number of impressions and traffic that a pay-per-click campaign can drive to your business, if targeted effectively and managed daily, is astonishing. An Imaging-center Example A medium-sized imaging center offering MRI, CT, ultrasound, and radiography service in the Midwestern United States used pay-per-click advertising to increase its patient base by more than 150%. On average, for a $1,000 monthly investment, this center is able to generate 30 new-patient referrals. The campaign targets only selected zip codes, including a nearby city within a 30-minute driving time. It bids on selected keywords, including imaging center, diagnostic facility, open MRI, CT scan, and same-day MRI appointments, among others. It creates specific landing pages to drive specific actions (call today for an appointment, for example), and its ad copy uses compelling headlines that include the phrases same-day appointments, low self-pay rates, and comfortable open MRI. Over a period of six months, this MRI center was able to increase its patient base. It also created opportunities to market itself to new physicians who normally would not have considered sending referrals to this center. Of course, pay-per-click advertising
is only one of several tools in your marketing arsenal. While it’s a powerful tactic to drive targeted traffic to your imaging center (and it can capture the attention of prospective patients), remember that it coexists in context with your online brand. Before you ramp up your paid-search efforts, consider the types of content that can be optimized on your website to make those campaigns more efficient. Increase your presence on other socialmedia platforms, and consider writing a weekly blog entry. Once you have established valuable content for your targeted patients to view, you’ll not only begin to rank higher in search results, but your paid traffic will cost you less (as payper-click vendors can correlate the search terms you are bidding on with content on your website). Patients no longer have to rely solely on a physician’s referral to find their way to an imaging center. With the power of paid-search methods, in combination with other online tactics and strategies, you can drive traffic to your imaging center within your geographic targets— and with a monthly budget that you control. In the face of increasingly complex health-care regulations, the dwindling numbers of independent physicians as referral sources, and the increasing importance of cost to patients, payper-click advertising is one avenue to the patient that is within your control. While it requires daily maintenance and continuous analysis, it is a powerful method of acquiring new patients, changing prospective patients’ behavior, and creating awareness of your center in a targeted market. Moreover, it’s one tool that can be used effectively to drive your imaging volume and revenues. Aalap Shah is a social-media marketing consultant; aalap.shah@someconnect.com. Reference 1. Health consumer study: the role of digital in patients’ healthcare actions & decisions. http://www.thinkwithgoogle. com/insights/library/studies/healthconsumer-study/. Published December 2009. Accessed November 6, 2012.
www.imagingbiz.com | December 2012 | Radiology Business Journal 15
The Future | Radiology’s Clinical Pathway
Future Tense:
Radiology’s Clinical Pathway Pioneering radiologists envision a future in which specialties collaborate to make personalized, predictive medicine possible
R
oderic Pettigrew, MD, PhD, is director of the National Institute of Biomedical Imaging and Bioengineering (NIBIB) of the National Institutes of Health (NIH). He states his organization’s goal simply: developing technology that can detect disease early, even at the molecular level, long before physical symptoms begin to appear. “We want to achieve the earliest possible detection so the disease can be treated at its earliest stage,” he says. “In addition, in the past, those processes have been separate: You detect; later, you decide how to treat. We are focused on merging diagnosis and treatment in a single setting, with the ultimate goal of preventing disease.” Pettigrew defines imaging broadly as the science of observation, and he is not alone in his perception of imaging as a clinical tool that far exceeds the confines of what is known today as radiology. Hedvig Hricak, MD, PhD, chair of the department of radiology at Memorial Sloan-Kettering Cancer Center (MSKCC), New York, New York, and a past president of the RSNA, takes a similarly open view. “Rather than being owned by one specialty, integrated diagnostics will be a collaborative effort. Large amounts of data (generated by each of the involved specialists) will be integrated, with the help of analytical computers, in order to provide the most comprehensive and detailed overview of a certain pathology or disease,” she predicts. The dovetailing of clinical specialties will be made possible by advanced IT— technology so powerful that it will make today’s informatics systems look like filing cabinets by comparison, Hricak says. “In health-care centers today, we use computers largely for storing patient data,” she says. “Tomorrow, we will use them as intelligent systems that think with
By Cat Vasko
Preload: Preview v From the vantage point of the NIBIB, Roderic Pettigrew, MD, PhD, sees the merging of diagnosis and treatment. v Developments such as Trojan-horse nanoparticles and the deliberate application of traditional modalities create the potential for personalized, preemptive medicine.
16 Radiology Business Journal | December 2012 | www.imagingbiz.com
v To prepare, leading radiology departments are experimenting with new collaborative models to integrate diagnostics. v Advanced IT will be key to managing massive amounts of imaging, pathology, and laboratory data.
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The Future | Radiology’s Clinical Pathway
What we are trying to do is create an integrated report from different databases in different departments, and those databases aren’t currently designed to communicate with one another. —Dieter Enzmann, MD
For radiology to be relevant in the future, as medicine becomes more of a science and less of an art, we have to rely more on quantitative results that are consistent and standardized. —Daniel Sullivan, MD
us to help us integrate large quantities of information productively.” Integrated Diagnostics Models for this productive integration of clinical data are already being developed in leading institutions around the country. Hricak and her colleagues at MSKCC have a collaborative agreement with IBM to work with the Watson artificialintelligence system in a clinical setting; on the opposite coast, the University of California–Los Angeles (UCLA) recently formed a Radiology Pathology Center headed by Dieter Enzmann, MD, chair of radiology for Ronald Reagan UCLA Medical Center in Los Angeles. “A lot of imaging is ordered for either the detection of cancer or the monitoring of cancer treatment,” Enzmann says. “To round out the data, we need something in addition to the imaging phenotype. As molecular therapies become more sophisticated, the clinician choosing between these therapies needs molecular information. Just being aware of a tumor’s size and where it is may not be enough to determine the proper therapy or to follow that therapy.” While physically integrating the two specialties was comparatively simple—pathologists were located with radiologists in an imaging center—the
informatics side of the equation presents a bigger challenge, Enzmann says. “What we are trying to do is create an integrated report from different databases in different departments, and those databases aren’t currently designed to communicate with one another,” he notes. “Then, there is the question of how referring physicians should interact with the integrated report. The goal is to make it easy to use, understandable, and interactive. It’s a work in progress.” At the University of Florida College of Medicine, Anthony Mancuso, MD, chair of the department of radiology, and Christopher Sistrom, MD, MPH, PhD, CIO in the department of radiology, are collaborating on a conceptual model of diagnostic imaging that maps clinical scenarios and imaging procedures in a 2D matrix. “It’s a way of picturing the domain of imaging. It’s a big space, with millions of plausible cells; any one radiologist might be able to know only a small cluster of cells in the matrix. This is a huge domain that requires a team to figure out,” Sistrom explains. Daniel Sullivan, MD, professor of radiology at Duke University, heads another such initiative, the Quantitative Imaging Biomarker Alliance (started by the RSNA in 2007). It brings together academic researchers, device manufacturers, and
18 Radiology Business Journal | December 2012 | www.imagingbiz.com
information from clinical trials and clinical practice to develop quantitative measures for imaging. “We can’t get good studies if we just use subjective interpretations of imaging tests,” Sullivan notes. “We need objective measures. For radiology to be relevant in the future, as medicine becomes more of a science and less of an art, we have to rely more on quantitative results that are consistent and standardized.” He continues, “That’s the goal. We want to keep radiology relevant in the era of modern, molecular-based medicine.” Collaborating to Thrive Maintaining that relevance could well mean redefining the profession of radiology entirely. Hricak does not mince words when it comes to the importance of further research into imaging’s impact on outcomes. “Radiology is facing economic challenges that make policymaking more complex than ever, and informed policymaking requires evidence-based knowledge that can only be derived from research,” she says. Udo Hoffmann, MD, a cardiac radiologist at Massachusetts General Hospital in Boston, has firsthand experience with Hricak’s point. As the lead researcher behind the groundbreaking ROMICAT and ROMICAT II trials,1,2 Hoffmann has done work validating the diagnostic and prognostic value of coronary CT angiography (CCTA) in the triage of emergency-department patients with chest pain. “The important question, for a new technology such as CCTA, is how it works in clinical practice,” Hoffmann notes. “The big debate was whether CT imaging was justified or those resources were being spent unnecessarily. Now, we know that when you have CT, you are much better able to differentiate between patients who have no disease and those who do have disease—and you can spend your resources on the latter group.” Hoffmann and his team’s research has moved using CCTA in the emergency department to rule out myocardial infarction into the mainstream, he says. “It gets the attention of clinicians across medicine now,” he notes. “Integrated diagnostics means symptom-based
Business Intelligence Series: TRA Medical Imaging SIxTh PROfIlE In A SERIES Of SIx
Evolving the Radiology Practice With Confidence
TRA Medical Imaging uses business intelligence to support culture change among its physicians, positioning it for the future TRA Medical Imaging, like many practices in the United States, has seen sweeping consolidation in its market of Tacoma, Washington—and the trend looks likely to continue, according to Michael T. Dowd, MD, president of the 51-radiologist practice. “In our market, both health-care systems have been on a buying spree of physician groups, both primary care and specialist,” he notes. “The systems are also starting to align themselves with other hospitals, forming large health-care networks. What we are seeing here is a microcosm of what is happening with health care on a national level.” As a result, the practice (which reads for seven hospitals from two health systems, as well as an array of specialty clinics) has seen shifts in its referral base that have resulted in declining outpatient volume—making the ability to evaluate and serve new sites critical, Dowd notes. “We need to know where the good payor mixes are to understand what it will mean if we pick up more emergency-department business somewhere,” he says. Dennis Carter, CEO of the practice, concurs. “Over the next three to five years, we believe you’re going to have to be bigger to provide value-added services consistently across health-care systems that may span multiple states,” he says. “That will be a big challenge to grow into; practices are going to need help.”
Current Position TRA Medical Imaging found that help from its revenue cycle
Zotec Partners. The total solution.
management provider, Zotec Partners. After five years as a user of Zotec’s billing software, in 2011 the practice made the decision to outsource its billing through the company as well, deepening its access to the business intelligence that Zotec provides. “We realized our costs of billing were continuing to go up, even as our revenues were going down, and we wanted to tie our cost of billing directly to revenue,” Dowd says. “We’ve been using Zotec’s business intelligence, in some fashion or another, for five years, but Zotec understands how to use it much better than we did.”
“We realized our costs of billing were continuing to go up, even as our revenues were going down, and we wanted to tie our cost of billing directly to revenue.” — Michael T. Dowd, MD, president The practice uses business intelligence to track core financial measurements such as volume, days in accounts receivable, and payor mix, Carter says; Dowd adds that these measurements can also be tracked historically, over five years, to paint a broader picture of trends that the practice is facing. “Very recently, that access to historical data helped us, as a group, to evaluate one of our hospitals that was pushing exams from
PROfIlE a site where we read to another site,” Dowd says. “having data gives a lot more meaning to those conversations among business partners. It stabilizes the discussion, so we don’t make any decisions we might regret later.” It is, perhaps, most critical to the future health of the practice that Zotec gives TRA Medical Imaging data on physician productivity as part of a broader conversation about how the group will evolve to fit the changing paradigm of care delivery. By correlating physician-productivity data with data from the voicerecognition system, Dowd says, “We Dennis Carter, CEO can see what a given radiologist is doing, in a given seat, on a given day. Once we started doing that and sending the data out to people, it brought their productivity up quite a bit.”
The Balanced Radiologist Increasing radiologists’ productivity is a key goal in an era of declining reimbursements, and the use of hard data supports change on an individual-by-individual basis, Dowd says. “People definitely ratcheted up their productivity as soon as they knew they were going to get a monthly statement,” he says. “In the future, we’d like to identify who our most productive people are and why; on the other end, we’d like to look into why someone sitting in the same seat is reading half as much.” Cross-referencing Zotec’s productivity data against voicerecognition data makes possible apples-to-apples comparisons that preclude exceptions and excuses, resulting in rapid change, Dowd says. “The more granular the data, and the better the data can be defined by time period and seat, the more useful the data will be,” he notes. “Until that point, people can always make excuses. having productivity data in hand allows the conversation to be more structured.” While productivity is important, Dowd adds, “There are many other things that make a complete radiologist.” With that in mind, the practice is developing what Dowd calls the balanced scorecard, which will incorporate (in addition to
Zotec Partners. The total solution.
productivity) each physician’s level of engagement, quality of reports, and more. “You get what you measure, so if you only measure productivity, you might not get the level of service you want,” he says. Right now, Dowd and Carter anticipate including five factors in the scorecard, one of which is productivity. The others, Carter predicts, will prove more difficult to quantify, which makes accurate productivity data particularly useful. “Whatever you want to make your corporate culture among your radiologists, it needs to be reflected in the metrics that make up your scorecards,” he says. “There are many things that make a balanced radiologist; productivity is important, but you can’t focus on it alone. We see ourselves as a hands-on, customerfocused practice.”
Culture and Confidence Execution of the practice leaders’ vision for its corporate culture is supported through the use of business intelligence, Carter says. “having data helps with cultural change,” he observes. “Every group needs to evolve, and achieving that evolution without some kind of motivating factor is a difficult challenge.” A key issue is that of confidence, he says—confidence that changes are having the desired result, and confidence in the practice itself, as a business. Accurate data and measurements reinforce that confidence—an effect that TRA Medical Imaging saw firsthand when it began receiving business intelligence from Zotec, instead of producing it in-house.
“The more granular the data, and the better the data can be defined by time period and seat, the more useful the data will be. Until that point, people can always make excuses. Having productivity data in hand allows the conversation to be more structured.” — Michael T. Dowd, MD, president “In the past, if one of our physicians requested a report, it would take a couple of accountants getting together to run all these reports and compile data, which would then be prone to human error,” Carter says. “When you are trying to run a
Payments per Procedure, Payments per Total RVU and Charge Count by Without Denial and With Denial
Provider Count
Without Denial
With Denial
$90.71 $39.81 971,789
$97.67 $41.99 39,582
Payments per Procedure Payments per Total RVU Charge Count
Total Charges Charges KPI Goal Payments Total RVU Insurance Payments Total RVU Guarantor Payments Payments KPI Goal Net Collection % Net Collection % KPI Goal Total RVU Work RVU Practice Expense RVU Malpractice RVU Charges per Total RVU Payments per Total RVU
$275,769,598.30 $723,166,537.00 $92,016,086.34 $78,638,804.73 $5,527,758.66 2,109,589.8628 653,739.2763 1,414,878.3823 40,972.2042 $123.59 $39.90 1,011,371 $119.64 $42.58
2011 Q4 2011 $76,159,766.82 $180,791,632.00 $24,283,412.30 $20,997,888.76 $1,275,999.16 591,253.8912 180,507.3826 398,816.0038 11,930.5048 $121.96 $37.67 286,930 $118.64 $39.54
2012 Q1 2012 $74,406,154.24 $180,791,637.00 $22,714,947.79 $19,354,779.71 $1,375,234.23 565,965.0241 178,808.7321 375,905.3976 11,250.8944 $124.19 $36.63 274,221 $120.45 $38.86
Q2 2012 $68,667,125.14 $180,791,636.00 $24,456,543.47 $20,825,337.79 $1,550,783.05 519,769.7765 164,557.5471 345,247.1091 9,965.1203 $125.06 $43.05 150,301 $121.18 $46.02
Q3 2012 $56,536,552.10 $180,791,632.00 $20,561,182.78 $17,460,798.47 $1,325,742.22 432,601.1710 129,865.6145 294,909.8718 7,825.6847 $123.26 $43.43 199,919 $118.02 $47.95
Work RVU 17,128 14,403 13,136 13,115 13,033 12,933 12,351 12,286 12,189 12,036 11,943 11,923 11,713 11,588 11,438 10,672 10,511 10,496 10,358 10,277 10,257
Payments, Total RVU and Charge Count per Carrier – Primary Type BL MB % Pymt % RVU % Proc
MC CP VA SA HM 0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
Payments, Total RVU and Charge Count per Procedure Group
CT US PT % Pymt % RVU % Proc
SR Injections PQRI Tracking 0.0%
5.0%
Sample Zotec data
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
PROfIlE practice on real-time data, you cannot have reports that aren’t really accurate or reflective of what you are looking for. That eats away at the confidence levels of physicians and leaders.” With Zotec’s support, on the other hand, TRA Medical Imaging has access to reliable, accurate information that boosts the confidence level, positively reinforcing change. “With Zotec, even questions about very minute details—levels of payment per exam, per payor, per time period, for instance—are answered quickly and can be conveyed accurately. They aren’t just interpretations or impressions,” Carter says. The result is information that moves the practice in the right direction, keeping its physicians unified around common goals. “Accurate business intelligence goes a long way toward raising the confidence level, in the organization, that people’s efforts are being properly rewarded,” he concludes. “I have seen our ability to gather information and report it in a timely manner really build the confidence level of our physicians.”
Looking Forward looking into the future, Carter and Dowd see the consolidation trend in health care continuing, and they want to position TRA Medical Imaging to work well with large networks. In the short term, that means deeper subspecialization for the practice, which already has a large subspecialty base. “We have four pediatric radiologists, but I’d like to get to the point where we have a pediatric radiation oncologist available seven days a week,” Dowd says, by way of example. he adds, “We need more volume in order to be able to do that.”
“To have unbiased input, in the form of business intelligence, is a huge advantage to groups. It maximizes the teamwork, camaraderie, and efficiency of an organization.” — Dennis Carter, CEO Again, business intelligence helps the practice assess its current position in order to grow, Dowd says. “One of the metrics we get from Zotec shows how efficiently we are using our subspecialists,” he notes. “It can tell us, for instance, that our
musculoskeletal section is reading 75% of all shoulder MRIs. That helps us use our subspecialists more, and it helps us when we discuss whom to hire in the future.” Expansion will enable the group to provide deeper subspecialty coverage, but it will also serve a Michael T. Dowd, MD, larger goal: aligning the practice with president ever-growing health-care systems and networks. “If I were a large entity, I’d rather deal with one or two radiology groups than seven or eight,” Dowd observes. “In a larger radiology group, it’s easier to have that conversation with a big health system. You can spread out IT and administrative costs while providing the value-added service the health system needs.” If the practice grows, it will also be in a better position to work with payors, which will become particularly critical as delivery moves away from fee-for-service models, Dowd predicts. Another way that the practice positions itself for the future is by participating in federal initiatives such as meaningful use of health IT and the Physician Quality Reporting System (PQRS)—where, again, it is supported by its partnership with Zotec. “Zotec is very good at helping us collect the PQRS data and give feedback to our radiologists,” Dowd says. “When it comes to these federal initiatives, we want to understand what the game is all about to avoid the penalties. With PQRS, we didn’t get a huge amount of incentive money, but we got knowledge of how to play the game.” Carter and Dowd conclude that the use of business intelligence is critical to supporting the practice through multiple facets of its long-term strategy. “In the future, we believe radiology practices will need to be aligned very closely with the hospitals they serve,” Carter says. “As hospitals grow, practices need to grow. To have unbiased input, in the form of business intelligence, is a huge advantage to groups. It maximizes the teamwork, camaraderie, and efficiency of an organization.”
11460 N. Meridian St., Carmel, IN 46032 sales@zotecpartners.com zotecpartners.com 317.705.5050
evaluation—in this case, for chest pain—that integrates imaging into the care episode, with physicians who work together, as a team, to determine an effective treatment.” This is the goal at UCLA, where Enzmann’s vision of the future is one in which a more accurate and complete diagnosis is a prerequisite value proposition for participation in bundled payment models. “The accountable-care organization needs an accurate diagnosis, and that may mean more than just imaging,” he says. “One of the complaints about medical care is the lack of integration and communication. On the diagnostic side, radiology and pathology can organize themselves to make the diagnostic component of the patient experience highly integrated.” Sullivan shares that vision. “Radiology and pathology will become integrated,” he says. “It is unrealistic to think that a single imaging test would be specific enough, in a predictive way, to be the sole factor for choosing one therapy over another. It would have to be a combination of information from a variety of diagnostic tests, some of which we would traditionally think of as pathology tests.” Emerging Clinical Techniques To comprehend the role that pathology and other disciplines outside radiology can play in diagnosis, it is imperative to understand the emerging clinical techniques that are transforming the field of imaging. “Investigating life processes at the microscopic scale opens up a lot of room for new innovations. When you think on that level, integrated diagnostics makes absolute sense. If we think of diagnostics as the science and field of medical observation, it’s radiology and pathology—looking for patterns, shapes, orientations, sites, dynamics, and functional changes—and mapping what occurred and what it occurred in relation to,” Pettigrew explains.
The role that imaging will play in preemptive medicine remains uncertain, but it may include the use of molecular imaging, allowing us to visualize cellular function. —Hedvig Hricak, MD, PhD
Radiology converges with all of the natural sciences to become diagnostic medicine. It really takes all of those disciplines to understand and to use the information you have gained in order to fashion a therapeutic approach. —Roderic Pettigrew, MD, PhD
Hricak’s vision for the future involves what she calls preemptive medicine: care that begins at such an early stage that even the term preventive falls short of describing it. “The role that imaging will play in preemptive medicine remains uncertain,” she says, “but it may include the use of molecular imaging, allowing us to visualize cellular function to assess alterations that lead to cancer, or the use of interventional radiology to deliver highly targeted preemptive treatments to the location of the disease.” At the NIBIB, Pettigrew and his teams are developing nanotechnology that does just that. Trojan-horse nanoparticles carry therapeutic molecules directly to tumor cells, breaking down once they have penetrated these cells and releasing therapeutic agents to destroy them from the inside (with minimal impact on healthy cells). “These therapeutics work in conjunction with the targeting agents and the imaging agents, so you can determine where the particle is going, whether it reached the target, and what the response is,” Pettigrew says. “Having the imaging component allows one to make that observation.” Pettigrew sees imaging coming together, in the future, with cellular and
molecular biology (as well as pathology) to implement these highly personalized and site-specific therapies. “You have a growing convergence of these specialists who are experts in the scientific subtleties of image interpretation with those who understand molecular biology and genetics, and they can work to achieve health-care approaches that are optimized on a patient-by-patient, disease-bydisease basis,” he says. He adds, “Radiology converges with all of the natural sciences to become diagnostic medicine. It really takes all of those disciplines to understand and to use the information you have gained in order to fashion a therapeutic approach.” Innovation is by no means limited to molecular imaging, however. David Bluemke, MD, PhD, director of radiology and imaging sciences for the NIH Clinical Center (Bethesda, Maryland) and a senior investigator at the NIBIB, describes MRI tractography, which measures neurological function. The NIH-sponsored Human Connectome Project is working to create a complete map of structural and functional neural connectivity. “This initiative seeks to determine the normal neural circuits in the healthy brain,” Bluemke says. “Tractography is especially important
www.imagingbiz.com | December 2012 | Radiology Business Journal 23
The Future | Radiology’s Clinical Pathway
In this new world of health-care payment, the organization needs to do all of the imaging that is necessary and none of the inappropriate imaging—and it has to do it within a budget. —Christopher Sistrom, MD, MPH, PhD
That requires sophisticated, riskadjusted, and hierarchical analysis of the utilization data. If you want other clinicians to change their behavior, they have to know you are being fair. —Anthony Mancuso, MD
in relationship to neurosurgery and removal of brain tumors, as well as in assessment of neurodegenerative disease and brain trauma,” he continues. “One of the more discrete and earlier applications is to use it prior to brain surgery: You have essential connections between different portions of the brain, and they can be spared, during surgery, to avoid leaving the patient with severe deficits.” Bluemke says that tractography also has implications for improving the understanding of neurodegenerative diseases and disorders of the central nervous system. “We can determine how the disease is affecting certain portions of the brain and can look at connections between where the signals in the brain are originating and their ultimate destination and function,” he says. Hricak also sees a growing role for the informatics tools that aid diagnosticians, particularly computer-aided detection software. “Computer-aided detection tools will become increasingly necessary to help radiologists deal with the evergrowing amounts of data generated by sophisticated imaging techniques,” she predicts. Rather than displacing radiologists, Hricak believes that these
tools will help radiologists spend more time in consultative roles. “The hallmark of our profession will be to deliver simplicity out of complexity,” she says. “To do this, we will need not only to be technologically savvy, but to cultivate a deep understanding of disease processes and an eagerness to be full participants in clinical care.” Economics of Integration No discussion of the future direction of imaging is complete without a vision of the business models that will enable the profession to evolve. It is self-evident that imaging is facing an imperative to become both more collaborative and more consultative, but that dream might not sound achievable to radiologists already beleaguered by reimbursement cuts and turf battles. These challenges are not likely to subside soon. “In fee-for-service medicine, some providers will make money, even if an imaging test is inappropriate,” Sistrom says. “In the new world, inappropriate tests will be unacceptable. You definitely won’t make money, and you are going to harm your patient population to the extent that it will cost you more somewhere else.”
24 Radiology Business Journal | December 2012 | www.imagingbiz.com
Sistrom continues, “Even marginal (appropriate, but not necessary) tests will have to be rationed in the bundledpayment or capitated environments. In this new world of health-care payment, the organization needs to do all of the imaging that is necessary and none of the inappropriate imaging—and it has to do it within a budget.” For that reason, Enzmann envisions a future of varied business models for radiology. “The previous approach, that of the general radiology practice, won’t be enough, in terms of strategic positioning,” he predicts. “Radiology will wind up with different business models. One will be focused on operational efficiencies: a teleradiology-type model that manages just imaging studies—very efficiently and at a low cost. The integrated-diagnostics approach is a higher-end business model in which radiologists will provide these other consultative services.” Enabling organizations to use that business model will be advanced informatics tools, including computerized decision support to aid clinicians in choosing appropriate exams. This will free the time of both referring physicians and radiologists, thus leaving more time for consultation and patient care. “The new paradigm is order-entry decision support, which gives you the ability to analyze utilization on a physician-by-physician, quarter-byquarter basis. You can see whether there are physicians who are ordering more inappropriate tests, and you can give feedback,” Mancuso says. “That requires sophisticated, risk-adjusted, and hierarchical analysis of the utilization data. If you want other clinicians to change their behavior, they have to know you are being fair.” For the additional services that radiologists can provide to be more consultative, Mancuso and Sistrom have no shortage of ideas. Their vision of the radiology round trip includes consultation at the time of ordering, consultation on optimal modality protocols, and the development of a scenario-specific report that truly enables the ordering physician to take the next step in decision making. Sullivan concurs: “Radiologists need to be paying attention to what information
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The Future | Radiology’s Clinical Pathway
You need a strong base of trainees, and to mentor those individuals, you need a strong senior staff—and those mentors are increasingly busy with clinical activities. —David Bluemke, MD, PhD
their referring physicians need,” he says. “Increasingly, treating physicians have more therapeutic options available to them, and they have a lot of questions about which are most important or relevant. Radiologists need to hear what questions treating physicians have and focus on helping them choose the best therapeutic options.” Hoffmann is optimistic that new payment models will actually encourage radiologists to play a more consultative, integrated role. “Integrated care is driven by how things are reimbursed,” he says. “If the reimbursement for the patient is based on a care episode, it becomes more critical that all the pieces work together. Radiologists will need to be willing and able to connect
with patients and to see themselves as an active part of patient care.” Further Research Required Moving the specialty along this path will require a much deeper investment in research. “Research involving new imaging technology is often seen as especially costly—and, therefore, risky,” Hricak says. “Such innovative research, however, is essential to making optimal use of the tools at our disposal. Although it may seem counterintuitive, in these difficult times, greater expenditures on science, technological innovation, and clinical research are called for, as they will fuel economic growth and increase the precision and efficiency of health care.” As Hricak indicates, radiologists will probably have to prioritize this research themselves, as the economic crisis has led to a decline in federal funding. “The NIH landscape has changed dramatically, over the past three years or so,” Bluemke notes. “Before, one in four or five grants would be funded; now, grant funding is less than one in 10.” Further, he observes, radiologists in practice have been so focused on efficiency and productivity that making time for research has fallen by the wayside. “For radiology, the background, training, and full-time dedication are sometimes not quite as intense as in other fields,” he says. “It’s partly because of all the clinical activities in radiology: There are tremendous amounts of imaging being done, and a lot of clinical translational researchers are halftime workers. It’s difficult to do a halftime world-class discipline.” Bluemke believes one solution to this problem would be the development of more grants for clinical trainees in radiology. “We really have not invested
26 Radiology Business Journal | December 2012 | www.imagingbiz.com
heavily in research for clinical trainees, compared with other specialties,” he says. “You need a strong base of trainees, and to mentor those individuals, you need a strong senior staff—and those mentors are increasingly busy with clinical activities. It’s a catch-22, and the only way to solve it is through dedicated effort to making research training for more individuals a priority.” Comparative-effectiveness research based on quantitative imaging measures is equally critical, Sullivan says. “The goal is to determine what effect different diagnostic tests have on patient outcome,” he says. That investment will pay big dividends in the future, Hoffmann predicts. “In general, integrated care has tremendous potential to be more cost effective, but it’s an initial investment—a downpayment on the future of care,” he says. “For some of these projects, it may be hard, initially, to show an impact on health. It is better to look at integrated care as an investment in future management of the patient.” Pettigrew’s vision for future patient management takes a philosophical turn as he analogizes integrated diagnostics with the functioning of the human body. “Biology, chemistry, electrical engineering, and physics—the disease inside the person involves all of these fields,” he says. “There are no lines drawn between them inside the patient. We know the convergence of the sciences will happen because it already exists: It lives within all of us.” Cat Vasko is associate editor of Radiology Business Journal. References 1. Hoffmann U, Bamberg F, Chae CU, et al. Coronary computed tomography angiography for early triage of patients with acute chest pain: the ROMICAT (Rule Out Myocardial Infarction Using Computer Assisted Tomography) trial. J Am Coll Cardiol. 2009;53(18):16421650. 2. Hoffmann U, Truong QA, Schoenfeld DA, et al. Coronary CT angiography versus standard evaluation in acute chest pain. N Engl J Med. 2012;367(4):299308.
The
Radiology
100
The Fifth Annual Ranking of the 100 Largest Private Radiology Practices by FTE Radiologists
Sponsored by
Foreword By: Hélène Gey Vice-President, Marketing Intelerad Medical Systems Radiology Business Journal’s 2012 survey, The 100 Largest Private Radiology Practices, provides an enlightening and insightful look at the industry. Intelerad is proud to sponsor this effort for the third consecutive year. We recognize and salute the accomplishments of this select community of physician-owned radiology groups, many of which rely on Intelerad technology as they continue to grow and improve patient care. Just as the practices included in this year’s ranking have met the challenges of growth and expansion, so too has Intelerad. In 2012, we opened new offices on multiple continents, expanded our product line, and added more hospitals and imaging centers to our customer base. Throughout this growth, we worked diligently to continue providing superior service and support. Intelerad was recently ranked number one in KLAS for PACS Ambulatory Care, earning this honor for an unprecedented sixth year in a row. We continue to embrace a customer-centric approach in all that we do. In October, several of the radiology groups listed in this ranking, along with leading industry analysts, attended the inaugural edition of the InteleOne® Visionary Forum. Participants exchanged knowledge and experiences while exploring perspectives and vision for the future of the industry. Forum attendees also shared valuable insights on how they are using InteleOne®, our Enterprise Workflow Solution, to increase efficiency, expand operations, collaborate with specialists, and dissolve distance challenges with rural points of care. Strategies for streamlining InteleOne deployment across care organizations were also discussed. The inherent shared and disparate qualities of Forum participants allowed them to create cross-learning opportunities and forge valuable ties among themselves. In a recent report, KLAS took a closer look at InteleOne, giving it an A- based on Implementation and Training, Sales and Contracting, Functionality and Upgrades, and Service and Support. KLAS spoke with 22 healthcare providers running InteleOne and the top benefits reported back were increased efficiency, intuitive user interface, improved client relationships, excellent ROI and a proven ability to interface with at least 36 PACS, RIS, and EMR solutions. At RSNA last year, we successfully announced our new InteleRIS™ solution, which is now deployed to customers and earning much praise. This year at RSNA, we are again expanding our portfolio. Our new Flow™ Enterprise Diagnostics Solution and InteleConnect™ Clinical Hub build on our awardwinning IntelePACS® Solution. Our Nuage™ Disaster Recovery Services™—built on the Nuage Cloud Imaging Platform by Intelerad®—kick-starts a new service delivery model. We are proud that leading healthcare providers are choosing Intelerad. Regardless of the size of your practice, we hope to see you at RSNA and look forward to learning how we can meet and exceed your technology needs. Visit us at Booth 4814, Hall A | www.intelerad.com/rsna100
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COVER | The 100 Largest Private Practices
Introduction Welcome to the fifth annual radiologygroup survey results. A different approach in gathering information was used this year. In the past, the survey was 100% based on submissions provided by the groups themselves. This year, the Radiology Business Journal staff researched the practice market and sought out large groups, asking them to submit information. Some entries were based on information taken from the groups’ websites. The results look complete and do represent the largest 100 radiology groups owned by radiologists in the country. In 2005, I wrote1 about the existence of national law and accounting firms, speculating about whether national radiology groups would develop. In 2005, the correct answer would have been: not soon. Now, I wonder whether we are at a tipping point and seeing the advent of nationwide radiology groups and megagroups of 250 or more radiologists. The pressures related to decreased reimbursement, mergers, and the growth of hospitals and health systems—and the probability of payment models other than fee for service— are driving changes related to group size. As we see the number of larger groups grow, I predict that in the next five years, we will see some mergers of the largest groups in the country. It is not reflected in the survey results, but we did see the merger of Inland Imaging (Spokane, Washington) and Seattle Radiologists to create another 100-person radiology group. The 100 largest groups represent 4,602 radiologists, and the 20 largest groups represent 1,504 radiologists. There are approximately 25,000 radiologists in private (nonacademic) practices, so it is still a very fragmented industry. In past surveys, many of the groups showed actual decreases in their numbers of radiologists. For 2012, it appears, the trend has reversed. Only three of the top 50 groups that responded in the past had decreases of more than one FTE radiologist. We are optimistic about the future for radiology groups. Keep in mind the saying that if a business does not grow, it will die. Thank you for your participation, Joseph P. White, CPA, MBA Partner CliftonLarsonAllen Reference 1. White JP. Nationwide radiology, PA: coming soon to your city? http:// www.imagingeconomics.com/issues/ articles/2005-11_08.asp. Published November 2005. Accessed November 8, 2012.
The 100 Largest
Private Radiology Practices As volumes flatten and practices trim costs, size emerged as a differentiator in 2012 By Cheryl Proval
A
fter tracking the nation’s largest private practices for five years, we saw the benefits of scale become obvious in 2012. Volumes were relatively flat in 2011, and the median number of procedures performed dropped slightly in two of four practice-size categories. Median procedure volumes increased modestly in the smallest practice-size category (but so did its median number of FTE radiologists). Procedure volumes also increased in the largest practice cohort; its median number of radiologists actually declined, adding credence to the idea that size matters. Other evidence that practice size could be advantageous is the direct link between size and revenue: The larger practices reported the greatest revenue per FTE radiologist, and the revenue number stepped down with each descending practice-size category. This is the first time since we launched the survey, five years ago, that this could be said. We increased the number of practices ranked from 50 to 75 in 2011 and from 75 to 100 this year. In the past, we ranked only practices that self-reported their data. This year, we included all sizable practices; in some cases, we obtained figures for their radiologist totals from their websites. The names of those practices are printed in light blue (see table), and their rankings are likely to be undeservedly high because they are ranked by total (not FTE) radiologists. Evidence that radiology is struggling under seven years of payors’ costcontainment efforts is the fact that, in two of the four practice-size categories, the median number of imaging centers owned declined (Figure 1). Because imagingcenter operation is labor intensive, this probably contributed to a decline in FTE employees in each practice-size category
(Figure 2). Another troubling trend is that the median number of hospital contracts declined in all but the very largest practice-size cohort (Figure 3), signaling a more intense, competitive climate in the marketplace. Survey collaborators Radiology Business Journal and CliftonLarsonAllen are pleased to welcome many new practices into the ranking this year. We made a Web-based survey available at www.imagingbiz.com from July 15 to September 20, 2012. We contacted those practices that did not fill out the survey by email and phone, asking each practice to tell us its number of FTE radiologists, FTE employees, hospital contracts, and owned imaging centers. For the survey, private practices were defined as wholly owned by the radiologists, with no outside investors. The financial information contributed by more than half of survey participants is confidential, but is used to identify trends. We would like to thank those practices for their trust and their contribution to the knowledge base of the specialty. At the Summit Radiology Associates of North Texas (RANT), Fort Worth, Texas, climbed from the number-two position, last year, to claim the top spot, this year, with 122 radiologists. RANT was formed from the merger of three North Texas practices last year, topping out at 105 FTE radiologists, adding 17 FTE radiologists in one year. It shed one imaging center (for a total of 13) and 17 FTE employees in 2012, and it retained the 24 hospital contracts that it held in 2011. RANT took the top spot from Advanced Radiology Services (ARS) PC, Grand Rapids, Michigan, which held the top position for four years running. The practice weighed
About the Survey The survey to rank the 100 largest radiology practices is the result of a collaboration between CliftonLarsonAllen and Radiology Business Journal. CliftonLarsonAllen is a nationwide professional-services company counted among the top 20 accounting firms. Radiology Business Journal is a next-generation bimonthly economics journal serving leaders in medical imaging. The sponsors gratefully acknowledge the support of Laura Tierney, manager, health care, CliftonLarsonAllen, who provided the computations for this survey, and Thanh Le, news editor, imagingBiz, for market research.
Milwaukee Radiologists, Ltd, SC
51
Mesa, AZ
East Valley Diagnostic Imaging, LLC
Medical Imaging of Lehigh Valley, PC
49
50
Garden City, NY
Drs Mori, Bean and Brooks
NRAD Medical Services PC
47
48
Dearborn, MI
Milwaukee, WI
Allentown, PA
Jacksonville, FL
Asheville, NC
Drs Harris, Birkhill, Wang, Songe and Associates, PC
Asheville Radiology
45
Richmond, VA
Nashville, TN
Voorhees, NJ
Germantown, TN
Lindenhurst, NY
Las Vegas, NV
Greenville, NC
Winter Haven, FL
Indianapolis, IN
Greensboro, NC
Houston, TX
Pembroke Pines, FL
Tacoma, WA
Houston, TX
East Providence, RI
East Hartford, CT
Raleigh, NC
Lakewood, CO
Powell, OH
Walnut Creek, CA
Dallas, TX
Phoenix, AZ
Spokane, WA
Springfield, IL
Minneapolis, MN
Englewood, CO
Novato, CA
Columbus, OH
San Antonio, TX
St Paul, MN
Minneapolis, MN
South Portland, ME
Miami, FL
Sacramento, CA
Harvey, IL
Fairfax, VA
Austin, TX
46
Radiology Associates of Richmond
Memphis Radiological, PC
41
44
Zwanger-Pesiri Radiology
40
South Jersey Radiology Associates, PA
Desert Radiologists
39
Radiology Alliance, PC
Eastern Radiologists, Inc
38
42
Sunshine Radiology, LLC
37
43
Greensboro Radiology
Northwest Radiology Network, PC
35
36
Synergy Radiology Associates PA
Rhode Island Medical Imaging
30
34
Jefferson Radiology
29
Radiology Associates of Hollywood, PA
Wake Radiology
28
33
Diversified Radiology of Colorado, PC
27
Singleton Associates
Radiology Inc (OH)
26
TRA Medical Imaging
Bay Imaging Consultants Medical Group, Inc
25
31
American Radiology Associates, PA
24
32
Inland Imaging
Clinical Radiologists, SC
21
Southwest Diagnostic Imaging, LLC
Suburban Radiologic Consultants
20
22
Radiology Imaging Associates, PC
19
23
Riverside Radiology & Interventional Associates
California Advanced Imaging Medical Associates, Inc
17
18
St Paul Radiology, PA
South Texas Radiology Group, PA
15
16
Spectrum Medical Group
Consulting Radiologists, Ltd
13
Radiology Associates of South Florida, PA
12
14
Radiological Associates of Sacramento
11
Peoria, IL
Central Illinois Radiological Associates, Ltd
Radiology Imaging Consultants, SC
9
Fairfax Radiological Consultants, PC
Mountain Medical Physician Specialists, PC
7
8
10
Murray, UT
Austin Radiological Association
6
Charlotte, NC
East Brunswick, NJ
Charlotte Radiology
University Radiology Group
Everett, WA
4
Radia Medical Imaging
3
Grand Rapids, MI
Fort Worth, TX
Location
5
Radiology Associates of North Texas, PA
Advanced Radiology Services, PC
1
2
Group
2012 Rank
Ray A. Beauchamp, MD
Keith Radecic
William P. Moore II
Vincent Mathews, MD
Worth Saunders, MHA, FRBMA
Dennis Carter
Ethan B. Foxman, MD
Robert E. Schaaf, MD
Chris (Kip) McMillan
Steve Duvoisin
Thomas C. Dickerson, FACHE
Jim Tierney
Michael P. Belick, CRA
Marcia Flaherty
Neeraj Chepuri, MD
David Landry
Jay Bronner, MD
Doyle W. Rabe
Thomas Dunlap
Mark Jensen
Richard Moed
Mark J. Kleinschmidt
CEO
Michael P. Belick, CRA
Steve Duvoisin
Thomas C. Dickerson, FACHE
Robert Breger, MD
Robert Kricun, MD, and Elliot Shoemaker, MD
C. Edward Hancock, MD
Geraldine McGinty, Paul Lang, and Jay Bosworth
Dennis Wulfeck, MD
David S. Yates, MD
Ray A. Beauchamp, MD
Greg Lassiter, MD
William Muhr, MD
Steven L. Mendelsohn, MD
Randall Shelin, MD
Michael G. McLaughlin, MD, MBA
David Rippe, MD
Vincent Mathews, MD
Eric Mansell, MD
Stephen C. Dalton, MD
Benjamin Freedman, MD
Michael T. Dowd, MD
Edward B. Singleton, MD
Richard Noto, MD
Ethan B. Foxman, MD
Robert E. Schaaf, MD
Stephen George, MD
G. Patrick Cain, MD
Ira Finch, MD
J. Mark Fulmer, MD
Russell M. Lein
Greg Palmieri
Dean W. Marks
Jonathan Friedman
Jason Carter
John Brazil
Dawn E. Portelli
Bryan Larsen
Kirk A. Hintz
Robert Day, RT
William P. Moore II
Walter Lindstrand
Roberta Cove
Linda Wilgus, CPA
Worth Saunders, MHA, FRBMA
Harley Robinson
Dan Strub
Dennis Carter
Wayne Arruda
Jonathan Pine
Margaret King
Chris (Kip) McMillan
Michael Murphy
Mary Gerard
Craig Cunningham
Rodney Owen, MD, and Chris Dewald, MD Lisa Mead
Daniel Murray, MD
Charles E. Neal, MD
40.4
40.5
41
42
42
42
43
44
44
45
45
46
46
49.5
50
50
50
51
51.03
52
53
54
54
55
55
56
56
56
57
60
60
62
62
63
64
65
Marcia Flaherty
66
Phil Russell, MBA
66
67
68
68
Mark Martin
Charles Engmark II
David Landry
Neil Miller
68.4
70
71
75
83.25
85
85
86
108.08
122
2012 FTE Radiologists
Steven Newell and Tara McKennie
Gregory Q. Hill, JD
Lynn Elliott, MBA, CPA
Doyle W. Rabe
Thomas Dunlap
Mark Jensen
Bill Ziemke
Mark J. Kleinschmidt
Lead Nonphysician
Aaron Binstock, MD, and Rich Thompson, MD Jim Tierney
Jay A. Kaiser, MD
Mark Alfonso, MD
David Golden, MD
Michael T. Madison, MD
Neeraj Chepuri, MD
Daniel Landry, MD
Jonathan Breslau, MD
Jay Bronner, MD, and Perry Gilbert, MD
Sean Meagher, MD
Michael Webb, MD
Marshall C. Mintz, MD
Gregory C Karnaze, MD
Robert E. Epstein, MD
Robert Mittl Jr, MD
Richard Satre, MD
David Patrick, DO
John Queralt, MD
Lead Physician
31
39
42
51
42
49.1
48
41
53.2
52
50
55
55
61
56
57
65
56
55
63
62
63
63
71
66
60
73
80
85
81.5
113
105
2011 FTE Radiologists
35
33
43
45
38
47
41
58
50
50
53
55
50
56
54
67
63
56
63
64
80
67.7
65
61
60
72
76
80
80
105.7
2010 FTE Radiologists
33.1
35
45
38
51
41.5
52
52
41
50
55
61
60
65
63
85
67
57
71
72
78
61
65
106.2
2009 FTE Radiologists
32.2
43
208
560
42
70
55
62
600
214
138
10
115
177
48
50.99
52
178
347
310
58
150
12
554
463
79
62
105
101
67
190
129
32
30
900
80
23
386
610
315
379
150
103.5
213
2012 FTE Employees
12 0
2
7
9
0
5
1
9
5
7
10
7
0
6
6
8
0
10
12
9
18
5 3
8
6
8
12
3
7
7
13
7
12
6
6
17
25
15
15
18
14
23
37
14
5
5
18
16
3
17
5
14
14
13
24
Hospital Contracts
0
0
9
5
10
19
0
2
7
1
22
8
0
7
6
0
7
3
4
0
18
0
0
15
15
10
27
3
13
Imaging Centers
479,640
625,000
667,611
350,000
895,000
680,000
834,000
550,000
1,250,000
733,329
360,000
875,000
820,000
739,100
817,000
750,000
870,000
600,000
750,000
855,000
1,000,200
750,000
1,126,329
900,000
1,000,000
800,000
873,580
1,149,301
1,155,000
1,027,000
905,000
790,000
667,885
1,450,000
1,300,000
1,100,000
1,600,000
940,000
1,400,000
1,200,000
1,597,050
2,000,000
Procedures
5
1
1
1
1
2
1
1
2
1
1
1
2
1
2
1
3
3
2
13
1
5
2
3
3
1
2
1
Teleradiology States
COVER | The 100 Largest Private Practices
Table. The 100 Largest Private Radiology Practices for 2012 (Ranked by FTE Radiologists)
Milwaukee, WI
Galloway, NJ
Fresno, CA
Amarillo, TX
Advanced Medical Imaging
Akron Radiology
Central Valley Community Medical Imaging/ CMI Radiology Group
74
75
76
Columbus, OH
Trumbull, CT
Cincinnati, OH
Radiologic Associates of Fredericksburg
Advanced Radiology Consultants
79
80
Radiology Inc
Advanced Diagnostic Imaging, PC
Boise Radiology Group
Hackensack Radiology Group
87
88
89
90
Radiology, Inc
100
Fort Wayne, IN
FWRadiology
Radiology and Imaging Specialists, PA
98
99
Easton, PA
Progressive Physician Associates, Inc
97
Richmond, VA
Huntington, WV
Lakeland, FL
East Syracuse, NY
Commonwealth Radiology, PA
Crouse Radiology Associates
95
Fort Collins, CO
Toledo, OH
Denver, CO
Cincinnati, OH
Hackensack, NJ
Mishawaka, IN
Crestview Hills, KY
Lancaster, PA
96
Toledo Radiological Associates, Inc
Advanced Medical Imaging Consultants
93
94
ProScan Reading Services
Boise, ID
Radiology Associates of Northern KY
86
Rocky Mountain Radiologists
Saginaw, MI
Lancaster Radiology Associates, Ltd
91
Huntsville, AL
Radiology of Huntsville PC
84
85
92
Cedar Rapids, IA
Radiology Consultants of Iowa
83
Springfield, MA
Professional Radiology Inc
Radiology & Imaging, Inc
81
82
Fredericksburg, VA
Hamilton, NJ
High Plains Radiology Associates
Radiology Affiliates Imaging
77
78
Akron, OH
Fresno, CA
Neenah, WI
Columbus Radiology Corp
Radiology Associates of the Fox Valley, SC
72
St Louis, MO
Tampa, FL
Orlando, FL
73
West County Radiological Group, Inc
71
Little Rock, AR
Radiology Associates, PA
Tower Radiology Center
69
Newport Harbor Radiology Associates Medical Group, Inc
68
70
Newport Beach, CA
Medical Center Radiology Group
67
Northridge, CA
Fort Wayne, IN
Renaissance Imaging Medical Associates
Summit Radiology PC
65
Clearwater, FL
Nashville, TN
Bayside, WI
Seattle, WA
Memphis, TN
66
Advanced Diagnostic Imaging, PC
Radiology Associates of Clearwater, PA
63
64
Seattle Radiologists, PC
Wisconsin Radiology Specialists, SC
61
62
Atlantic Medical Imaging, LLC
Mid-South Imaging & Therapeutics, PA
59
60
Knoxville, TN
Vista Radiology, PC
58
Lowell, MA
Atlanta, GA
Commonwealth Radiology Associates
Northside Radiology Associates, PC
Marietta, GA
Tucson, AZ
Ann Arbor, MI
Greenville, SC
56
Quantum Radiology
55
Mesa, AZ
Allentown, PA
57
Huron Valley Radiology, PC
Radiology Ltd
53
54
Milwaukee Radiologists, Ltd, SC
Greenville Radiology PA
51
52
East Valley Diagnostic Imaging, LLC
Medical Imaging of Lehigh Valley, PC
49
50
Ed Goodemote
Joe Wolfcale
Mary Ann Drumm
S.H. Podolski III
Stephen J. Pomeranz, MD
C. Chad Wiggins
Alan Kaye
Edwin W. Swager
Robert Carfagno
Charles McRae
Mark Schaefer
Brian Barbeito
Robert M. Glassberg, MD
Steve Moss
Eric C. Ferguson, MD
C. Edward Hancock, MD
Hans G. Dransfeld, MD
Christian Schmitt, MD
Timothy Grissom, MD
James W. Sherwood, MD
Karen L. Killeen
Peter Koplyay, MD
Daniel A. Dessner, MD
Stephen J. Pomeranz, MD
Harvey K. Yee, MD
Bradley L. Miller, MD
Robert F. Latshaw, MD
Brian C Randall
Laurie E. Gianturco, MD
Alan Kaye, MD
David L. Glasser, MD
Rahul Mehta
Marc J. Miller, MD
Jason H. Fox
Thomas Applewhite, MD, and Jeffrey Thomasson, MD
Kathleen Sitarik, MD
Michael Roossin, MD
John Bormann, MD
Andrew Deutsch, MD, MBA
Chad Calendine, MD
Michael J. Peters, MD
Dexter Witte
Robert M. Glassberg, MD
Steve Moss
Allan Hoffman, MD
Alan Zuckerman, MD
Edward J. Woolsey, MD
Eric C. Ferguson, MD
Robert Breger, MD
Robert Kricun, MD, and Elliot Shoemaker, MD
Dean W. Marks
Bill Wright, MBA
Ed Goodemote
Joe Wolfcale
Mary Ann Drumm
Jerry Fosselman
S.H. Podolski III
Richard G. Wagner Jr, FACMPE
Judith Turner
C. Chad Wiggins
Bob Still
Kathy Epley
Vasilios Tourloukis
Edwin W. Swager
Cindy Keesee
Monica Nichter
Charles McRae
Carol Hamilton, MBA
Alicia Kunert
Michael Madler
Mark Schaefer
Michael Moreland
Karen Leppert
Brian Barbeito
Daniel H. Seiders, CMA, MBA
John Friedel
Adam Fogle, MBA
Chip Hardesty
Keith Collin
Russell M. Lein
Greg Palmieri
41
23
25
25
27
27
27
27
28
28
28
28
28
28
29
29.5
29.5
30
30
30
30
30
30.5
31
31
31
31
31
32
32
33
33
33.5
34
34
34.35
35
36
36
37
37
37
37.5
38
38
38
39.3
40
40
40
40.4
40.5
25
23
31.8
25
28
28
30
32
24
28
30
30
29.5
45
31
32.5
33
35
34
34
34
36.35
30
36
34.8
36.2
40
38.4
40
40
31
25.2
28
26
27
22
28
31
26.5
34
36
37.5
30
31
32
36
39
40
39
39
40
35
26.7
29
29
27
25
32
35
38
39
34
34
30
38.1
40
37.5
30
33.1
37
94
80
4
47
13.7
306
11.5
109
89
32
200
39
39
37
48
120
6
60
195
53
22
294.5
6
57
393
14
32.2
43
208
0
5
2
3
1
1
28
0
6
4
7
7
3
0
0
0
3
2
0
9
1
0
9
0
4
11
1
2
7
5
5
9
4
11
4
40
8
2
2
2
3
22
10
7
2
13
3
16
6
1
10
2
3
5
3
7
10
7
667,611
538,129
608,081
478,500
404,484
451,949
250,274
600,000
450,000
400,000
400,000
432,351
605,000
500,000
650,000
470,316
600,000
495,000
690,000
850,000
425,000
558,135
555,000
610,783
739,221
600,000
795,000
479,640
625,000
3
1
4
1
3
1
46
1
1
2
1
2
1
1
1
2
2
1
1
2
1
1
5
1
COVER | The 100 Largest Private Practices 12
350
10
300 250
Key
8
< 35 FTE radiologists 6
200
35–49 FTE radiologists
150
50–65 FTE radiologists
4
100
> 65 FTE radiologists 2
2010 2011 2012 2010 2011 2012
2009 2010 2011 2009 2010 2011
80
1,200,000
9
60
900,000
6
40
600,000
3
20
300,000 2010 2011 2012 2010 2011 2012
12
2010 2011 2012 2010 2011 2012
1,500,000
2010 2011 2012 2010 2011 2012
100
2010 2011 2012 2010 2011 2012
15
in at 108.8 FTE radiologists this year—4.2 fewer than the 113 that it reported in 2011. ARS serves 13 hospitals, with the assistance of 103.5 FTE employees. This year’s number-three practice, Radia Medical Imaging, Everett, Washington, last participated in the survey in 2009, when it reported 60 FTE radiologists. This year, Radia reported 86 FTE radiologists, 150 FTE employees, three imaging centers owned, and 14 hospitals served. Charlotte Radiology in North Carolina retained the number-four spot this year, adding 3.5 FTE radiologists, for a total of 85. The practice, a regional powerhouse in breast imaging, was one of the few practices that added imaging centers this year, reporting a total of 27 (seven more than last year). Last year’s third-ranking practice, University Radiology Group, East Brunswick, New Jersey, maintained the same number of FTE radiologists—85—
2010 2011 2012 2010 2011 2012
0 Figure 2. Median FTE employees, 2010–2012.
0 Figure 1. Median imaging centers, 2010–2012.
0 Figure 3. Median hospital contracts, 2010–2012.
2009 2010 2011 2009 2010 2011
2010 2011 2012 2010 2011 2012
2010 2011 2012 2010 2011 2012
50
0 Figure 4. Median FTE radiologists per practice-size category, 2010–2012.
0 Figure 5. Median procedures performed, 2009–2011.
but dropped to number five in the ranking, edged out by Charlotte Radiology, which reported the same number of FTE radiologists, but more FTE employees. University Radiology Group has ownership interest in 10 imaging centers and serves five hospital clients. University Radiology Group displaced Austin Radiological Association (ARA) in Texas from the number-five position, even though ARA added 3.5 FTE radiologists this year, for a total of 83.5. The IT-savvy practice, however, kept the distinction of being the most productive private radiology practice in the nation, measured as procedures per FTE radiologist: 19,162. Practice Trends Are radiology practices getting larger, as is widely believed? Because we increased the sample size, it would not have surprised us if the median practice size had decreased,
as it did when we widened the ranking from 50 (median size: 52) in 2010 to 75 (median size: 39) in 2011. The median practice size actually increased almost two FTE radiologists, at 40.5 for 2012. The median practice size increased in two of the four practice-size categories (Figure 4). The median practice size for groups of fewer than 35 FTE radiologists was 30 in 2012, compared with 27.5 in 2011; in the 35-to49 category, it was 40.2 in 2012, compared with 40 in 2011; in the 50-to-65 category, it decreased to 55.5 in 2012 from 56 in 2011; and in groups of more than 65, it was 71 (compared with 80.8, last year). Further evidence that practices are growing larger is the fact that the elite club of private practices of more than 65 radiologists doubled in 2012 to 15 practices, compared with eight in 2011. Practices in that category that did not grow slipped a place or two in the rankings.
Referrers Don’t Miss a Beat RSNA Booth # 4814
The Big Eight
In a salute to size, a new feature of this year’s report is a list (see table) of the nation’s eight largest radiology practices, regardless of practice model, including teleradiology and academic practices that operate as radiology (not multispecialty) practices.
Table. Largest US Radiology Practices (All Types) Rank
Practice
Location
Lead Physician
Lead Nonphysician
FTE Radiologists
FTE Employees
IT Spending (% of Revenue) 5%
1
vRad
Eden Prairie, MN
Pat Basu, MD
George Morgan
393
398.3
2
Radiology Associates of North Texas
Fort Worth, TX
John Queralt, MD
Mark J. Kleinschmidt
122
213
3
Brigham and Women’s Radiology
Boston, MA
Stephen E. Seltzer, MD
Brian Chiango, RT, MBA
120
471
>5%
4
Radisphere National Radiology Group
Frank Seidelmann, DO
Scott Seidelmann, CEO
111
139
13.3%
5
Advanced Radiology Services
Grand Rapids, MI
David Patrick, DO
RIchard Moed
108.7
110.2
4%
6
Massachusetts General Radiology
Boston, MA
James Thrall, MD
Jae W. Lee, MBA
91.1
606.2
2.9%
7
Radia Medical Imaging
Everett, WA
Richard Satre, MD
86
150
8
Charlotte Radiology
Charlotte, NC
Robert Mittl Jr, MD
Mark Jensen
85
379
Of the practices that participated last year, 29 added radiologists, 19 shed radiologists, and 14 stayed the same. Another widely held belief—that radiologists are working harder—was also borne out by the data, at least for practices of more than 65 FTE radiologists. While the median number of FTE radiologists in this practice-size category actually declined in 2012, the median number of procedures performed increased from 1,007,731 in 2011 to 1,177,500 in 2012 (Figure 5). This increased productivity could be attributed to the greater resources available to larger practices for IT and support staff, although the percentage of revenue spent on IT was consistent across practice-size categories. The two larger practice-size categories reported spending an average of 3%, and the two smaller size categories spent 2.9%. Nonetheless, that 3% of revenue is a much greater figure for the larger practices than it is for the smaller ones. The Public-policy Effect Last year, we reported that the median number of imaging centers owned by radiology practices had increased in all size cohorts, except for the largest practice-size group. In 2012, the median number of imaging centers owned increased in just two of the four practice-size groups: The median number of centers owned by the 35-to-49 cohort increased from four to five and the median number of centers owned by the 50-to-65 group increased from two to five. The largest practices shed imaging centers, for a median of seven (compared with 12 in 2011), and the smallest practices reduced their median imaging-center ownership by half, from four to two. While the nation’s largest practices continue to see the value of owning technology and operating imaging centers, repeated cuts to the technical component of reimbursement have made it more difficult
to turn a profit. Practices also could be under pressure from hospital clients to divest centers that compete with their interests. This divesting of imaging centers might have been a factor in an across-the-board decline in practice employees: Practices with more than 65 FTE radiologists reduced their median number of FTE employees from 190 in 2011 to 170 in 2012, practices of 50 to 75 radiologists went from 125 to 104 FTE employees, practices of 35 to 49 radiologists reduced FTE employees from 87.5 to 62, and FTE employees of practices of fewer than 35 radiologists declined from 89.9 to 47. Not all practice-size categories shed centers, however, so the decline across all settings could reflect austerity measures due to the application of the CMS Multiple Procedure Payment Reduction to the professional component of reimbursement. Another disquieting trend across practice sizes was a decline in the median number of hospital contracts in all practice-size categories except the largest. The median number of hospital contracts declined from six in 2011 to five in 2012 in groups having fewer than 35 FTE radiologists, from eight to six in the 35-to-49 cohort, and from 12 to 11 in the 50-to-65 cohort. Practices of more than 65 FTE radiologists increased their median number of contracts from 13 in 2011 to 14 in 2012. The proliferation of teleradiology companies, which were not included in the ranking unless they could meet the private-practice criteria, might have been a factor. Our list of the eight largest radiology practices—regardless of practice model (see sidebar)—shows a teleradiology company as the nation’s largest radiology practice. Big Is Beautiful The information provided by this year’s participating practices suggests, for the first time, that size is a clear advantage in the current, competitive marketplace for
2%
radiology services. The largest practices generated more revenue per FTE radiologist, increased their median number of hospital contracts, and performed more procedures per FTE radiologist than the smaller groups, in general. Practices clearly appear to be recognizing the benefits of size and strategically growing their size, whether through mergers or by steadily adding new partners. This year, the percentage of groups in the largest practicesize category increased to 15% of the total, compared with 11% in 2011, and the percentage of groups in the smallest category dropped to 34% (from 43%, in 2011). In reaching out to known large practices that had not completed the survey, we discovered that many simply were unaware that the survey had been posted. Next year, we will do a better job of alerting readers of Radiology Business Journal about how they can participate and of communicating directly with practice representatives when the survey is posted. The issue of whether to move to a ranking method that would count total radiologists instead of FTEs is more complicated, and we would very much appreciate your thoughts on this. On one hand, practices that actively participate have a ranking disadvantage, compared with practices that are ranked through a count of radiologists on their websites. On the other hand, moving to a ranking method that is less precise would dilute the revenue data. In conclusion, we extend our congratulations to the practices included among the 100 largest private radiology practices: It is not easy to achieve what you have done, and we salute your practicebuilding skills. We also extend our gratitude to the practice leaders who took the time to participate in the annual survey. Cheryl Proval is editor of Radiology Business Journal.
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Regulatory Landscape | 8 Top Legal Issues
Navigating the Regulatory Landscape: The 8 Top Legal Issues of 2012 Eight key legal issues emerged in 2012, both complicating and simplifying the regulatory landscape By Rich Smith
I
dle hands are said to be the devil’s workshop; in 2012, government regulators proved the same to be true of hands that are busy, as evidenced by the new and modified rules that they churned out to address perceived problems in the delivery of radiology services. Many of these rules—brought forth by DHHS agencies—were unhelpful to radiology practices striving to keep their heads above water. In fairness, though, one or two rules were of the opposite character. During 2012, there also were nonregulatory developments that affected (or seemed likely to affect) various radiology care-delivery models. Foremost among these: intensifying efforts by hospitals to integrate the independent radiology groups providing coverage for them. Whether introduced by regulation or by private-sector dynamics, the challenges of 2012 were shaped—and defended against—by legislation, judicial precedents, and legal interpretations. Practice Mergers The merger of radiology practices continued without letup during 2012. Spurring this activity—as in recent years—was continuing reduction in reimbursements for the professional component, coupled with the growth of multipleprocedure discounts. W. Kenneth Davis Jr, JD, a partner in the law firm Katten Muchin Rosenman, says, “Revenue per work unit is
going down, and radiology practices have responded by increasingly trying to consolidate, pulling out costs where possible.” Also occurring with somewhat more frequency in 2012: hospital systems stepping in and prodding radiology services to merge. “It happens where a system is served by more than one radiology group,” Davis explains. “Some of this is driven by a desire, among the hospital systems, to gain access to more capacity and to subspecialty radiology services.” The groups being pressed to merge do not always fit well together. “Their organizational structures and cultures may be incompatible,” Davis notes. Whether such action is a decision of the parties alone or a step taken at a hospital system’s behest, there remained, in 2012, at least one significant legal impediment. “Mergers carry with them antitrust considerations,” Davis says. “This year, there was some heightened scrutiny of physician-practice acquisitions and mergers—scrutiny from regulators at the federal level, but especially from the states.” Davis says that regulators cannot determine that a radiology monopoly will result when two practices unite simply by counting how many radiologists are in this particular community and seeing how this stacks up against benchmarks. “The most appropriate way to look at it is from the standpoint of market power: How much of it is the merged entity going to possess?” he asks. “There are various red flags the government is now looking for that go beyond postmerger geographic dispersion
8 to Keep You Awake v Practice mergers and their associated antitrust implications v The use of exclusive provider contracts as leverage by hospitals v The emergence of accountable-care organizations and shared-savings negotiations v Imaging-center joint ventures with hospitals v Integration and employment discussions v Reprieve in the new orderdocumentation rules v Broadening of the professionalcomponent Multiple Procedure Payment Reduction v Place-of-service billing for interpretations
www.imagingbiz.com | December 2012 | Radiology Business Journal 35
Regulatory Landscape | 8 Top Legal Issues
Radiology groups, this year, were more frequently told that they must limit or entirely halt their involvement with competing facilities. —W. Kenneth Davis Jr, JD Katten Muchin Rosenman
of the radiologists. If you’re in a midsized metropolitan area and there are only two radiology groups in town—one is of medium size and the other is large—and you put them together, it’s bound to raise eyebrows. Regulators are likely to suspect that here is a group with the ability to set and raise prices at will,” he adds. This, with several other factors, led to failed merger talks this year, Davis reports. Some proposed mergers failed because proponents couldn’t convince their practice colleagues to abandon long-held approaches to governance, control, and radiologist compensation. A related factor was the impact that a merger would have on customers. “For example, you might have one group heavily focused on providing professional services at its own imaging centers, with the other group focused on providing professional services at hospitals that are in competition with the imaging centers of the first group—so the hospitals might be unhappy with such a merger,” Davis notes. Exclusive Contracts While hospitals might or might not have been keen to see radiology-group mergers, increasing numbers insisted that the imaging practices providing them with coverage agree to do so on an exclusive basis. “Radiology groups, this year, were more frequently told that they must limit or entirely halt their involvement with competing facilities,” Davis says. “In situations where the radiology group owns facilities, hospitals are increasingly telling them to undertake no further growth. In one instance that I’m aware of, the hospital has told the radiology group that it will terminate its contract unless the radiology group divests its imaging
facility. The hospital sees that facility as a competitive threat.” Worse, a small (but growing) number of hospitals demand, as part of the exclusivity arrangement, that the radiology group participate with all of the hospital’s payors. Davis says, “The hospitals don’t care what kind of reimbursement rates the radiology group ends up securing from each of those payors. The demand is, ‘Make a deal with them, or else we may have to part ways.’ In a couple of states, legislation is being advanced to require radiologists and other providers to do exactly this.” He continues, “Unfortunately, and almost invariably, when radiology groups agree to this demand, the payors become aware of the contract’s provisions, and soon thereafter, the radiology groups experience a dramatic and rapid reduction in reimbursement.” Davis says that he finds troubling a move by hospitals to demand, beyond exclusivity, that the radiology group assume greater responsibility for the hospital’s technical component. “In other words, hospitals want the radiologists to be more involved with those things the hospital is going to be paid for,” he says. The rub is that “the hospital is less and less inclined to pay the radiologists for doing that,” he adds. Davis finds these demands troublesome from both economic and legal standpoints. He says that radiology groups need to stand firm against unreasonable expectations—and not just as a matter of principle. “The groups need to set forth that they must be compensated in exchange for taking on extra responsibilities—because the law requires compensation. In fact, if you do extra tasks for the hospital, and
36 Radiology Business Journal | December 2012 | www.imagingbiz.com
you do them gratis, that puts both you and the hospital at risk of allegations of kickbacks,” he says. Accountable-care Organizations In 2012, CMS finalized rules governing accountable-care organizations (ACOs). This, Davis observes, had the effect of encouraging more hospitals to become part of ACOs. “The new rules delve into how to establish an ACO. These rules are lengthy and detailed, but on the plus side, they also are reasonably clear, offering a good roadmap for how to proceed,” he says. Now, it falls to radiology groups to decide what roles they will play in the ACOs formed by the hospitals with which they have relationships. “On one hand, radiology groups want to be team players—to do everything they can to improve health care for the community through improvements in clinical services and care,” he says. “On the other hand, they have to balance this against the fact that they are entrepreneurs: that they are in business to be successful, and so must give thought to how they will support their own practices and grow them.” Some radiology groups under exclusive contracts feel that participation in the hospital’s ACO is owed simply as a matter of course. For them, the question is to what extent there must be participation. Davis says that groups in this position often find themselves under pressure to commit to full engagement. “The tensions can be significant if your hospital is dropping hints that you’ll lose the exclusive arrangement with them if you refuse to participate in the ACO,” he says. Compensation can be an issue in a situation in which, for instance, radiologists have little influence on the management of imaging services. “If radiologist compensation is tied to how well the imaging-services component is managed, then radiologists had better be given the authority and the resources to manage that component,” Davis says. Another compensation-related bone of contention is that aggregate reimbursements tend to decline as a result of good performance. “If you are successful in your role within the ACO,
90 67
18
31 21
7
44
47
52 35
45 26 11
Regulatory Landscape | 8 Top Legal Issues
We’re seeing, in some places, efforts on the part of hospital systems to encourage radiologists to give up independent practice and join their hospital-affiliated physician practices. —Thomas W. Greeson, JD Reed Smith
you will find that you’ve reduced overall reimbursements from other payors,” Davis says. “Everything you do in the ACO is very likely to have an impact on utilization outside the ACO. This is going to put downward pressure on total reimbursement from those outside payors, since they are not going to pay you for any of the savings you generate within the ACO.” Compensation could become an even thornier issue when the second ACO version is rolled out, in the next few years. “That will be the start of riskbased contracting, which means you can anticipate a more limited pool of money available for reimbursements,” Davis says. “I would want to know how much of that money is going be left over to pay radiologists because there is a significant concern, from the radiologists’ perspective, that the hospital and the physicians who put patients in beds are going to get the first bite of that apple.” Joint Ventures In 2012, hospitals deepened their sophistication with regard to jointventure acquisition and operation of imaging centers. More hospitals accepted the idea that—despite the tremendous consolidation occurring within the hospital industry—it makes more sense to buy the imaging center outright from the radiologists, but then let the selling radiologists manage it on a longterm basis. “There has been a greater willingness on the part of hospitals to enter into this kind of deal—not to shield the hospital from antitrust law, but to give the imaging center the best chance of being a clinical and economic success story for the hospital,” Davis explains. This greater willingness to enter into joint ventures has been a win–
win development for both sides. “In the past, people have gone overboard trying to anticipate legal issues that might potentially arise in a joint-venture partnership,” Davis says, “but at best, they were boxing with shadows. At worst, they were anticipating problems that just simply were nonexistent. More recently (and this certainly was true in 2012), the prospective partners and their attorneys have been approaching these deals in a way that more realistically reflects the legal issues. As a result, the terms and conditions being written into the proposed agreements are more reasonable.” The flip side of acquisition is divestment, and that, too, occurred widely in 2012. “We increasingly see radiology groups wanting to sell their imaging centers because the continuing southward direction of reimbursement has made ownership less and less attractive,” Davis says. “In the five divestitures handled by my firm this year, all of the radiology groups involved sold their interests to hospitals. That is in keeping with a trend toward hospitals being the primary acquirers. It can be a good strategic move for the hospital because it helps it expand its footprint, with regard to where it is deriving its outpatient services, and it further links the hospital—in a potentially profitable way—to the various referring physicians outside the community.” On the legal front, there were tweaks to the rules pertaining to the type and degree of supervision that must exist in joint-venture provider-based facilities, Davis notes. “In part, at least, the rules for supervision in hospital inpatient and outpatient diagnostic centers have been changed to be more in line with the rules that apply to physician practices,”
38 Radiology Business Journal | December 2012 | www.imagingbiz.com
he says. “The concept is to have general, direct, and personal supervision.” Integration Discussions Health-care reform and economic shifts combined, in 2012, to convince more hospitals that survival hinges (to an increasing extent) on bringing independent providers of radiology services in-house. Thomas W. Greeson, JD, an attorney with the law firm Reed Smith, says, “We’re seeing, in some places, efforts on the part of hospital systems to encourage radiologists to give up independent practice and join their hospital-affiliated physician practices.” Greeson adds, “Some hospitals apparently believe that by having hospital-based physicians as employees, it will be possible to control the services those physicians provide better and, by extension, to achieve greater accountability from them and for them.” He does not predict that integration will emerge, in the year ahead, as the predominant model of delivery for radiology services, “yet it is certainly something that has captured the imagination of some hospitals. Only time will tell how widespread this model becomes,” he says. It might not spread at all if, as some speculate, integration arouses antitrust scrutiny, but this is something that Greeson does not expect. “I don’t think antitrust will be an issue unless the integration occurs within a system that already has dominant market power and exercises that power in a manner that’s potentially anticompetitive,” he says. In Greeson’s view, the traditional model of provider independence and autonomy is still the best. “I believe independent radiology groups have provided great service and created the incentives for radiologists to come to a community and offer a variety of subspecialty services,” he says. “I’d be hard-pressed to say that radiologists are going to be better off economically if they move from an independent status to the status of hospital employees, yet there are some radiologists who may prefer to do just that.” A flaw inherent in integration is its adverse long-term impact on
Regulatory Landscape | 8 Top Legal Issues
compensation, he says. “Many radiologists who have achieved a decent level of compensation during their first contract terms as integrated providers may experience significant retrenchment in compensation by the time their contracts come up for renewal,” he explains. Greeson says that alternatives to integration are available, and radiology groups interested in maximizing revenues (and compensation) would do well to consider them. One alternative is a partially integrated arrangement. “In such a system, radiologists would be able to reassign selected services— breast imaging, say—to the hospital,” he says “The idea is try to find a way for the radiologists to help the hospital become more competitive without the radiologist paying the price of loss of economic independence.” Short of partial integration, the best way for radiology groups to please a hospital while retaining independence is simply by demonstrating value, Greeson says. Order Documentation In April 2012, CMS issued a final rule regarding how orders for physicianprovided services—imaging among them—are henceforth to be documented. The salient part of these rules stipulated that only the technical component of imaging services ordered by physicians and furnished in IDTFs, mammography centers, portable facilities, and radiationtherapy centers needs to be included in the billing documentation submitted to Medicare. There is more, though: The rules require providers of imaging services to maintain a copy of the written order for seven years.
Greeson has carefully dissected these rules, beginning when they were first proposed (in 2010). He has concluded that the provider of interpretation services is not subject to the seven-year requirement. He says, “If, as CMS has made clear, the provider of the professional component of the imaging service does not have responsibility for maintaining and supplying a copy of the order under this order-documentation rule, then it’s probably safe to say that recovery audit contractors (RACs) are without basis” for reimbursement denial/recovery. He adds, “Previously, radiologists were subjected to comprehensive error-rate testing and RAC audits where the interpreting radiologists have been required to provide a copy of the order as proof that the service provided was medically appropriate.” He continues, “This is very good news for interpreting radiologists who may be providing the clinical-component services for a hospital, for an imaging center, or for a physician practice. Radiologists now have a very clear statement from CMS that any efforts to deny payment for their services based on the fact that they have not provided a copy of the order upon the request of an auditor is without basis.” Multiple Procedure Payment Reduction In 2012, CMS issued Medicare Physician Fee Schedule (MPFS) rules that included one particularly unsettling subset: the Multiple Procedure Payment Reduction (MPPR) rule for the professional component. MPPR reduces the professional component for subsequent interpretation services when performed by a physician during
40 Radiology Business Journal | December 2012 | www.imagingbiz.com
the same day for a Medicare patient. For 2013, CMS proposes applying the MPPR to services performed for a patient on the same day by any member of the same physician group. Greeson explains that this MPPR rule change is slated to take effect in 2013 unless CMS has a change of heart before then—which Greeson says is possible. “There is hope: a faint hope, but hope, nonetheless,” he says. The 2013 change would apply to this scenario, for example: A trauma patient receives a whole-body CT exam; afterward, a neuroradiologist reads the images of the patient’s head. Later, a practice partner (who is the group’s musculoskeletal radiologist) reads other images from the exam. If the two radiologists’ group bills for the two different interpretations, it is likely to trigger a reduction in payment, in accordance with the 2013 MPFS. Greeson expresses alarm over this prospect. “Incentivizing the group to have one radiologist read the first and all subsequent images is not necessarily any more efficient—or more clinically advantageous—than having appropriate subspecialists share the interpretations,” he says. “In my view, CMS has not demonstrated justification for this rule,” he adds. “When a facility has a patient on the CT scanner for images of the chest and then concurrently takes images of the abdomen and pelvis while the patient is still on the table, there clearly are some efficiencies involved—but these pertain to the technical component of providing the imaging services. I disagree that this would also hold true when it comes to subsequent interpretations by the most appropriate subspecialists.” No matter how it is sliced, the MPPR extension for 2013 amounts to bad news for practices, Greeson says. “There is the possibility that CMS will reverse itself on this,” he notes. “The proposed 2013 rule applying the MPPR to group practices was heavily commented upon; we’ll soon see how persuasive those comments were.” The final rule will be issued by the end of 2012. On the chance that those comments were insufficiently persuasive, Greeson expects to see some groups resort to use
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Regulatory Landscape | 8 Top Legal Issues
of CPT® code modifiers (-59, indicating separate services, in particular) to permit them to continue performing shared subspecialty interpretations within the group, at the risk of an audit. “Radiologists will probably still try to provide the best possible clinical care,” he says. “For that reason, I believe that many will continue distributing the subsequent images to the right subspecialists for reading. The risk, with frequent use of modifier -59, is the potential triggering of an audit.”
Enrollment and Billing Where an imaging service is performed is just as important as who performs it, judging by the place-of-service instructions that CMS disseminated in late September. Greeson foresees these instructions causing great anxiety among radiology providers when the place-ofservice rules take effect next year. “The place of service for an interpretation service is going to be the location where the technical component was provided,
but the claim must also report the address and the zip code for the interpreting physician,” Greeson explains. CMS wants to pay the claim on the basis of the interpreting physician’s Geographic Practice Cost Index (GPCI). If (for example) the interpreting physician is practicing in New York, Greeson says, CMS wants to make sure that the appropriate GPCI is applied to the RBRVS—the claim will have to be adjudicated by the Medicare administrative contractor (MAC) that has responsibility for New York, even though the technical component (where the exam was performed) is in, perhaps, Virginia. CMS does not want the Virginia MAC to pay the claim for the New York interpretation; it wants the claim to be adjudicated and paid where the professional component was provided. “For my money, this is a disappointment in that CMS is sticking with its inefficient and nonsensical MAC jurisdiction rules,” Greeson says. “It’s going to be very cumbersome, using my example, for the facility that takes reassignment and then bills for those services to have to submit the technical-component service claim in Virginia and have to enroll and submit the professional-component claim for the interpretation service in New York.” He continues, “Once again, CMS is not promoting efficiency; it’s making the adjudication of claims more cumbersome and difficult. The rule doesn’t go into effect until April 1, 2013. When it does, it will usher in many new denials of payment if the jurisdiction where the claim was submitted does not match where the interpretation was provided.” Since this iteration of the placeof-service rule appears to be cast in concrete, convincing CMS to change it is likely to prove difficult, Greeson says. As for the possibility of a challenge in federal court, “I’m not aware that any efforts are being mounted, at this point, to gain relief through litigation,” he says. “I think, for now, affected radiology groups are focused on coming up with ways to comply with the rules.” Rich Smith is a contributing writer for Radiology Business Journal.
42 Radiology Business Journal | December 2012 | www.imagingbiz.com
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Equipment Service | Total Cost of Ownership
Equipment Service: Total Cost of Ownership
Service could be the last frontier where imaging managers can reduce costs By Sheila M. Sferrella, MAS, RT(R), CRA, FAHRA
I
maging managers are being called upon to reduce costs significantly in their departments, so understanding the total cost of ownership is critical. All payors have targeted imaging as a high-cost, high-utilization service, over the past seven years, and now health-care reform will change the way that imaging does business forever—making it a cost center on the inpatient side. In the future, we could see radiologists’ fees bundled with hospital inpatient payments. This leaves outpatient studies as the only source of revenue produced by imaging—yet in Arizona and California, today, a patient can access a website (www.bidonhealth.com) and bid for a study. The cost of an MRI exam ranges from $320 to $3,200. Because the total cost of owning and maintaining radiology equipment can vary tremendously (and can have a serious impact on bottom-line results), imaging managers should select the most costeffective options for their organization. This calls for the consideration of several variables when acquiring new equipment, in addition to the ongoing review of costs that imaging managers can control. A number of factors affect the total cost of ownership. They include major equipment, minor equipment, construction, annual service, upgrades, peripherals, supplies, staffing, certificates of need, and leases. When the organization is considering a replacement (or additional) piece of equipment, these costs should be included in the analysis so that life-cycle costs can be compared. For example, the purchase price of a radiography room from one vendor might be a little higher than the price from another vendor, but over the lifetime of the equipment, service might cost $50,000 less for the (initially) more expensive equipment.
Preload: Preview v Many factors affect the total cost of equipment ownership, and service is one of them. v Providers have six primary service options: OEM, third-party, insurance, inhouse, time-and-materials, and hybrid solutions.
44 Radiology Business Journal | December 2012 | www.imagingbiz.com
v To evaluate service costs and options, managers must calculate two benchmarks: mean time between failures and cost-ofservice percentages. v A good decision necessitates a complete census of equipment and the capabilities (and cost of training) of in-house biomedical-equipment specialists.
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Equipment Service | Total Cost of Ownership
Space for the equipment can be owned or rented; in a hospital environment, the space is usually owned, but in an imaging center, the space is often leased. Whether the space is owned or leased, the costs of buildout will need to be calculated (and funded) as part of the project’s cost. If the space is leased, negotiations with the landlord will often allow you to include buildout costs in the lease terms. Service Options For major radiology equipment, many organizations will purchase the equipment, while many outpatient centers might lease the equipment (to improve cash flow for the center). Leases can be obtained from vendors and banks, regardless of funding. In addition to the purchase price, the operating budget must include expenses for equipment maintenance. There usually are multiple payment options available to avoid an up-front outlay of cash. If the equipment is leased, however, the only choice for service is a full-service maintenance contract from the vendor (similar to the service arrangements required to lease a car). To keep the lease’s cost down, your organization might opt to pay for a maintenance plan separately for each year of the lease and to fund it from the operating budget. For purchases, there are six primary service options for an organization to compare, in terms of efficiency and cost effectiveness. First, OEMs offer a maintenance plan for a set period of time. There are usually multiple options, and obtaining coverage for glassware, transducers, and cryogens involves an additional contract and expense. Second, a third-party service organization can cover any and all equipment in the organization. Third, an insurance company will write a policy to cover the department or center and to combine two costs: the policy’s premium and a fixed equipment-repair fund. This company will provide data on the best prices for parts and service in your area. At the end of the year, if actual costs are less than the repair fund’s pool of money, the organization will retain the saving. If the year ends with actual costs exceeding
the pool of money, there are no additional out-of-pocket costs, since the risk has been capped. Fourth, hiring a dedicated in-house maintenance team is another option. An in-house solution might be best if you are managing a large department and/or multiple sites. Fifth, an organization can take the risk and pay for service and parts as needed. Usually, the organization will create a risk pool that is based on the past two years’ failure rates for equipment. With this method, costs are paid from the pool as they are incurred. Sixth, the organization can use a mix of the other five service options. For example, you can buy a full-service contract on one machine (because it has high failure rates) and buy an insurance product for everything else. Benchmarking Costs There are two major benchmarks to use in order to evaluate service costs and impact for a department. The mean time between failures of your equipment will be based on actual failure events over the past fiscal year. Mean time between failures is the mean number of days between downtime events for a given machine. There are national benchmarks available for each vendor and each equipment model.
Table. Annual Cost of Service As a Percentage of Equipment Cost Device Type
Service Cost
C-arm, port
< 1%
Chest room
< 1%
Portable radiography
< 1%
Radiography 2.1% Mammography 2.3% Angiography 2.7% Ultrasound 4.5% Radiography/fluoroscopy
5.2%
Gamma camera
6.4%
MRI 7.7% CT 8.4%
46 Radiology Business Journal | December 2012 | www.imagingbiz.com
It is also critical to determine a costof-service percentage by dividing the acquisition value of the equipment by the actual service cost for the past fiscal year. If the acquisition cost was $100,000 and the service cost for the past year was $10,000, for example, then the cost-of-service percentage is 10%. This information is particularly important in determining what a service contract should cost—whether service comes from the OEM or from another party. In my experience, relying mainly on OEM support produced an annual cost-of-service percentage of 10% to 14% of the equipment’s cost. Thirdparty service contracts averaged 8.3%, insurance coverage averaged 7.4%, and a combination that relied mainly on in-house service ranged from 4% to 6%—but that percentage could vary tremendously from organization to organization. The actual second-year cost of a program using in-house service is shown as a percentage of equipment cost (see table). Traditionally, equipment-purchase and maintenance costs were segregated into different budgets, so the total cost was difficult to track. The equipment purchase might be allocated to the capital budget, but the space buildout would be treated as an expense in the budget of the facilities-management department. The costs of supplies, aprons, wedges, and other items would be expenses in the operating budget. The materials-management department might negotiate the service contract, which was treated as an expense in a separate subaccount of the operating budget. In OEM organizations, sales and service are still separate companies, so a manager has to negotiate with different representatives for the purchase of the equipment and for the service contract. In the traditional model, about 60% of service contracts are OEM full-service contracts. Typically, those are the only contracts in which response time is guaranteed. Generally, contracts are priced based on a set number of hours, but many customers might use less than half of the maintenance purchased in an OEM contract. Vendors calculate uptime percentages based on 24-hour days, no
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Equipment Service | Total Cost of Ownership
It’s usually most effective to examine equipment piece by piece and determine which devices should be maintained via OEM contract, on a timeand-materials basis (or some other method), or using combined methods. —Sheila M. Sferrella, MAS, RT(R), CRA, FAHRA
matter how many hours of service are contracted for in the agreement. In the traditional model, revenue in a hospital is based on contribution margin or contribution to overhead. It’s very difficult to get actual costs out of hospital systems because of the hierarchy of charges. Ordinarily, expenses for nonrevenue departments are allocated to revenue-producing departments, as part of overhead. Cost-reduction Opportunities At the start of each new fiscal year, gross charges might be raised between 8% and 10% for the purpose of balancing budgets, but charges are not always based on a cost structure. The cost of delivering care in a hospital environment can be as much as five times greater than the cost of delivering the same service in a freestanding outpatient center. Competition among third-party service companies and insurance brokers has driven down response times and the cost of service. In addition, large vendors have acquired many third-party service companies, so they are now able to provide service for all equipment in an enterprise, not just their own equipment. There are several opportunities to reduce the cost of equipment ownership and maintenance, grouped under three headings that managers can control: service costs, capacity, and equipment costs. To examine how service costs can be reduced, it is important to compare the advantages and disadvantages of various equipment-maintenance options. Some of the common reasons for selecting a full OEM contract are that: • the vendor offers the best/most reliable service, as well as immediate discounts at the time of equipment purchase;
• uptime is guaranteed; • upgrades are free; • the maintenance agreement is thought to be less expensive than paying on a time-and-materials basis; • the health-care organization lacks the capacity to develop an in-house program; • arranging the full-service contract is easy; and • the manager no longer has to worry about equipment coverage. On the other hand, an OEM contract can have its pitfalls. Some of these are suboptimal pricing on parts and services, the risk of paying more than necessary to meet service needs, and unnecessary downtime while waiting for service (compared with an in-house program with on-site staff). Assessing Costs It’s usually most effective to examine equipment piece by piece and determine which devices should be maintained via OEM contract, on a time-and-materials basis (or some other method), or using combined methods. To perform an analysis, collect several types of information, including the current state of equipment, its service history, and whether there have been upgrades to the equipment. To begin, develop a spreadsheet with all of the equipment listed. If there are on-site biomedical-equipment specialists, they might already have such a list. Group data according to modality and machine type and model. For each device, list the cost of service under an OEM maintenance contract, the duration of that contract, its date of purchase, and the length of the equipment’s warranty. Much of this information will be extracted from the general-ledger accounts in the budget.
48 Radiology Business Journal | December 2012 | www.imagingbiz.com
Next, document dates of repair, costs of labor and parts, problems identified and parts replaced, initial reasons for service, the service method, and the amount of downtime associated with the repair. Note the number and nature of upgrades, their cost, and the software level/version. If the organization doesn’t have these specific details, call vendors and ask them to provide the data. Findings will vary, depending on the equipment. For instance, with nuclear medicine, you might find that repairs are infrequent and costs are relatively low; thus, you’ll probably save considerably by canceling the OEM contract and having the equipment serviced on a time-andmaterials basis by the OEM or a reputable third-party service vendor. While software upgrades are usually included in full OEM service contracts, they rarely cause a dramatic change in a device’s function. On the other hand, hardware upgrades are rarely included in an OEM contract, but are usually more critically related to improving the patient experience, reducing scan time or radiation exposure, improving image quality, or improving the machine’s performance. You can usually negotiate a maintenance contract, either with an
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Imaging Market File
Imaging Technology: Utilization and Service Introduction: Imaging providers—now, more than ever—need to operate their technology resources as efficiently as possible. To achieve maximum efficiency, the imaging devices must be properly maintained, or providers run the risk of equipment failure. If efficiency is defined as the number of units (procedures) produced in a standard day (10 hours), then three key elements drive efficiency: technology availability (uptime), speed (time needed to produce a single unit), and staff productivity. These three elements are the foundation of throughput. The previous edition of Imaging Market File presented 2011 equipmentinventory data collected by the AHRA in 2012 using the AHRAdatalynx tool. This edition looks at CT and MRI equipmentutilization percentages and service costs.
market) the warranty is not always owned by the OEM. A warranty might be provided by a third-party service company as part of a usedequipment sale. CT service follows a similar pattern, with 67% of systems under OEM service contracts and 12% under warranty. Some of
the equipment shows a lower-than-average service cost that might reflect an in-house program or a time-and-materials strategy. For instructions on accessing the complete Imaging Market File, see the back of this page.
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Equipment utilization: A primary indicator of a technology’s operational efficiency is how consistently the imaging equipment is used, relative to its total capacity. Equipment capacity is defined as procedures performed divided by the total available time slots (based on the hours of operation of the equipment). CMS defines 100% utilization as equipment operating for 50 hours per week, 52 weeks per year; even though many devices in hospitals and in outpatient facilities operate during extended hours, Regents applied the CMS standard for this analysis of the AHRAdatalynx database. These data come from more than 200 CT and MRI units, in both hospital and outpatient settings, across the country. Multiple factors (including equipment capabilities, staffing, and workflow) affect the time that it takes to perform MRI or CT exams. We used an average time per study based on Regents’ national client experience of 45 minutes per MRI exam and 20 minutes per CT exam to arrive at the capacity percentages outlined here (Figures 1 and 2). The CT and MRI units were grouped in five or six age categories, respectively, for this analysis. Equipment service: Service for 62% of the MRI systems installed was provided under OEM contracts, while 16% of service was under warranty (Figure 3). This does not necessarily translate into a 78% MRI service share for OEMs because (in a strong preowned-equipment
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Equipment Service | Total Cost of Ownership
OEM or with a third party, depending on your own resources. For example, do you have a strong in-house maintenance program? In that case, your contract might only cover parts needed for repairs. At a minimum, it is wise to contract for remote technical support. Managing Costs In many cases (and depending on your in-house resources), you will want to negotiate for some type of support agreement that gives you the software key, error-code information, and telephone support from the vendor. At one facility, we only had full-service agreements for first-generation equipment and for devices with very high failure rates. PET systems require relatively infrequent repairs, most of which we could handle in-house, and we had a third-party parts supplier. An agreement for remote diagnostic support was negotiated. Ultrasound requires infrequent repair/replacement of probes. Initially, we negotiated with the vendor to cover probes, at a set cost, for five years. Our biomedical-equipment manager found a source for probes online at half the cost of buying probes from the vendor. We did not experience any difference in failure rates with those probes. CT tubes are expensive, but they wear out predictably. Thus, we might shop around for competitive tube costs. In most cases, we saved 30% or more by buying from a parts distributor, not the OEM. For MRI systems, we used our biomedical-equipment specialists to handle repairs, but we needed remote technical support and parts, so we negotiated a contract that covered both. This option saved a considerable sum over a full-service contract. Parts are almost always less expensive through a parts source than through the OEM. Those parts are generally of the same quality and reliability as those obtained through the OEM. To make good decisions concerning an equipment-maintenance plan, ask some questions. First, how many pieces of equipment are in your department? The fewer machines you have in service, the more the cost effectiveness of trained in-
house personnel diminishes. There are a number of other options between a fullservice contract and an in-house program. Second, how quickly do you expect the technology to change? Be sure to negotiate the inclusion of any training needed by your biomedical-equipment specialists as part of the purchase of new equipment. If youâ&#x20AC;&#x2122;re considering taking your maintenance inhouse, include timing costs. At one health system, we had a number of contracts that were still in effect when we began our program. Some could not be canceled, so we notified all the vendors that we would terminate any contracts that we could and terminate the remainder at the end of the contract. That also allowed us to ramp up our in-house program. Third, if youâ&#x20AC;&#x2122;re going in-house, be sure to include all the costs of the operation, including the costs of adding personnel and/or training them. Before we implemented our in-house program, our cost-of-service percentage was close to 12%. After our first year of the program (with a mix of options), our cost-ofservice percentage dropped to 6%. By the second year, it was down to 4%. In an outpatient center, we were able to come up with a program that resulted in the saving of more than 18% over an OEM or third-party service contract (through an insurance program). This program covered corrective maintenance; preventive maintenance; parts, travel, and shipping; an equipment repair-orreplacement feature; and 24/7 service. With the program, there is simplified management and control: freedom to use any vendor; a common program anniversary date for all equipment; management reports; full control of administrative matters (such as accounts payable, budgeting, and vendor management); multivendor maintenancemanagement support systems; and full access to alternative providers of parts and service. When using an insurance product, you will be able to secure experiencerated renewals, reimbursement for inhouse repairs, and access to shared savings. The contract that we negotiated could be canceled by the customer at any time, and we were able to add and remove equipment at any time.
An insurance proposal for some equipment in one imaging center, for example, had a total program cost of $673,692. This was based on an aggregate deductible (underwritten proposed repair cost) of $519,724 and an insurance premium cost of $153,968. The result was a saving of $153,630 (or 18.6%) from the projected OEM cost of $827,322. In addition, we had a cap (maximum exposure) of $673,692 that we could budget. You might find opportunities to save on the purchase of equipment. In hospital environments, we nearly always purchased new equipment. When I began working with a radiology group, however, we almost always purchased used equipment. An OEM will offer used equipment that has been certified by that vendor. This equipment has been refurbished, which includes painting the equipment to make it look new. In my experience, the cost of new equipment comes down much more quickly than that of certified used equipment. If you work with a reputable used-equipment broker, however, it is possible to get equipment for a fraction of the original cost. Throughout the fiscal year, maintain access to data on costs, efficiency, and quality of service. The amount saved at the end of the year might surprise you. As reimbursement continues to decline and imaging utilization comes under continued scrutiny, it is imperative to examine the total cost of equipment ownership for your organization. Sheila M. Sferrella, MAS, RT(R), CRA, FAHRA, is the former vice president of ambulatory services for Saint Thomas Health (Nashville, Tennessee). She is a consultant for health-care organizations.
www.imagingbiz.com | December 2012 | Radiology Business Journal 53
The 21st Century | Practicing Radiology
Practicing Radiology in the 21st Century Radiologists today have multiple practice options, but jobs are scarce, and salaries are dropping By Joseph Dobrian
T
here was a time, not long ago, when radiologists were either organized into private practices or employed by academic medical centers. Today, they have more options. Representatives of different practice models—from teleradiology to hospital employment to megapractice/ multispecialty-practice membership— vary in their views of increasing service and performance demands (and their business, clinical, and lifestyle implications). These five panelists agree that more options exist today, but they warn us that jobs in radiology are currently scarce, and a newcomer might have to take whatever’s most immediately available. They urge radiologists to keep their skills current (and broad) so that they will be able to take advantage of unforeseen opportunities at any point in their careers.
The Panelists v Jonathan Breslau, MD, FACR, is president and chair of Radiological Associates of Sacramento in California, a large multispecialty organization. v Alan Kaye, MD, FACR, is chair of the department of radiology at Bridgeport Hospital in Connecticut and is a managing member of Advanced Radiology Consultants, which runs an outpatient business and works with two community hospitals.
RBJ: What practice choices does a newly qualified radiologist have today? ZUCKERMAN: Today, a graduating resident has many more choices than when I was graduating. That’s primarily due to the electronic revolution that made everyone mobile, as well as to the upheaval in health care. The former allows studies to be read at sites physically remote from patients. The latter has led to greater emphasis on efficiency, which has led to more entrepreneurship. Graduating residents now have choices besides just academics or private practice. We have to add teleradiology to the list, and that’s a markedly different model and different job. You don’t associate as much with other medical people, you can work at home, and you don’t have the interaction. 54 Radiology Business Journal | December 2012 | www.imagingbiz.com
v Alexander Norbash, MD, MHCM, is chair of radiology at the Boston University School of Medicine. v William Zinn, MD, is a neuroradiologist and independent teleradiologist based in Warren, New Jersey. v Alan Zuckerman, MD, is president of Quantum Radiology (Marietta, Georgia). This group is part of a nationwide confederation of allied practices.
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The 21st Century | Practicing Radiology
A graduating resident will need to consider regional preference, type of practice, and subspecialty, and the individual will have to prioritize all of those choices. —Alexander Norbash, MD, MHCM
Job availability is currently low. There will be changes as radiologists retire, but lately, they’ve been delaying retirement because of the uncertain financial picture. —Jonathan Breslau, MD, FACR
NORBASH: Demand for radiologists is cyclical; when I was finishing my training, I was interested in interventional neuroradiology, but I wasn’t sure I would be able to get into that—and you still see that same anxiety that I experienced 20 years ago because of the contracting job market. I wanted an academic position at an academic center where I could practice my subspecialty, so I considered expanding my range of specialization to increase my chances of employment at such centers. A graduating resident will need to consider regional preference, type of practice, and subspecialty, and the individual will have to prioritize all of those choices. Today, teleradiology positions let you work from home; as a new development, there’s in-house or off-site emergency imaging that can take place at night. I didn’t have those options when I was completing training—that degree of flexibility—but we’re not seeing as many traditional positions open in academic settings now. KAYE: My son is a third-year radiology resident, so this hits close to home. Residents have the same choices in practice venues that they had before—and more. Now, there are private practices, outpatient imaging centers, and academic departments—but there are fewer of those positions and more opportunities in teleradiology. There also are more
frequent employment opportunities with hospitals and multispecialty medical groups. I would tend to shun teleradiology positions because you’re not a part of a team; it’s a piecework lifestyle. I would go to the more traditional patient-care models at a community hospital, a multispecialty group, an academic department, or an outpatient imaging center. For me, the satisfaction of radiology comes from being part of a team and having contact with other medical providers. BRESLAU: Job availability is currently low. Opportunities lie mainly with large health-care systems and radiology companies, academic departments, and independent practices, which are much larger, on average, than they used to be. There will be changes as radiologists retire, but lately, they’ve been delaying retirement because of the uncertain financial picture. ZINN: Teleradiology has to be an option for anyone. It bespeaks a lifestyle. Do you want a traditional commute or a job that’s more flexible? Unless you’re doing procedures and other activities that force you to be at a facility, the science and technology of radiology are similar, no matter where you practice. Certainly, night-shift workers will dominate the teleradiology scene because much of daytime radiology is still a cottage industry, but this is changing.
56 Radiology Business Journal | December 2012 | www.imagingbiz.com
It may not happen for some time, but traditional daytime radiology providers are using teleradiology more, and you have to provide teleradiology as an extension of a traditional practice. The difference between teleradiology and traditional practices is that the image comes to your home office, rather than you commuting to the image. Teleradiology becomes more pervasive as we become more economical with manpower. RBJ: What market forces are driving interest in your practice model? BRESLAU: You have to consider income, lifestyle, and location: That hasn’t changed. Radiologists’ expectations for income have gone down, but lifestyle expectations have not. Location is the same consideration that it always has been. Job security is hard to assess or compare (opportunity with opportunity). Those coming right out of training often don’t have a sense of how to weigh that as a factor. People approaching a job opportunity 15 or 20 years ago, especially in private practice, hoped it would be a job for their career. Today, that assumption is diminishing; instead, the assumption is that they might have several jobs. ZINN: One driving force is the need to economize; another is to have a presence where there would normally not be a presence, as in an underserved area. If you’re a patient and want to know why teleradiology is a good thing, that’s one reason. You will realize savings in moving images and not moving radiologists. Quality of care also increases, as multiple specialist opinions can be obtained with the press of a button. Radiology is based on images, so it’s tailor-made for remote practitioners. There are other areas of telemedicine that are not quite as advanced—such as telecardiology, in which ECGs are sent to a central location where a senior physician can make centralized decisions, which could be executed in multiple locations. KAYE: My practice model is a hybrid. We have two community hospitals in this area, and a multisite outpatient imaging practice. We have 30 radiologists in three venues. The most unusual thing about
RSNA RESEARCH & EDUCATION FOUNDATION
Thank You
for your support!
Our sincere thank you to the following practices who have made generous group contributions this year to fund RSNA Research and Education (R&E) Foundation grants through the Visionaries in Practice (VIP) Giving Program: Advanced Diagnostic Imaging, P.C., Nashville, TN
Northwest Radiology Network, Indianapolis, IN
Advanced Radiology Services Foundation, Grand Rapids, MI
Quantum Radiology, P.C., Atlanta, GA
Asheville Radiology Associates, Asheville, NC Atlantic Medical Imaging, Galloway, NJ
Radiological Associates of Sacramento Medical Group, Inc., Sacramento, CA
Austin Radiological Association, Austin, TX
Radiology Associates of South Florida, Miami, FL
Birmingham Radiological Group, Birmingham, AL
Radiology Associates, P.A., Little Rock, AR
Catawba Radiological Associates, Hickory, NC
Radiology Imaging Associates, P.C., Englewood, CO
Charlotte Radiology, Charlotte, NC
Radiology Ltd., Tucson, AZ
Consulting Radiologists Ltd., Minneapolis, MN
Raleigh Radiology, Raleigh, NC
Diversified Radiology of Colorado, P.C., Lakewood, CO
Riverside Radiology and Interventional Associates, Columbus, OH
Eastern Radiologists, Greenville, NC
Southeast Radiology, Ltd., Upland, PA
Greensboro Radiology, Greensboro, NC
Southwest Diagnostic Imaging, Phoenix, AZ
Jefferson Radiology, Hartford, CT
St. Paul Radiology Foundation, St. Paul, MN
Johns Hopkins Medicine, Baltimore, MD
TRA Medical Imaging, Tacoma, WA
McHenry Radiologists & Imaging Associates, McHenry, IL
University of Pennsylvania Health System, Philadelphia, PA
Mecklenburg Radiology Associates, Charlotte, NC
University Radiology, East Brunswick, NJ
Medical Center Radiologists, Inc., Hampton Roads, VA
Wake Radiology Consultants, P.A., Raleigh, NC
Mountain Medical Physician Specialists, Salt Lake City, UT Group contributions through the VIP Giving Program fund R&E grants that support valuable research and development which will ultimately benefit practice, advance the field of radiology and make a difference in the lives of patients. For more information, please visit RSNA.org/Foundation or call 1-630-590-7760.
The 21st Century | Practicing Radiology
The lack of security in teleradiology is more perceived than real—because the medical community does need you. As radiologists, we’re capable of flipping in and out of different businesses, carrying our skills with us. —William Zinn, MD
us is that we have our own residency program as well. Otherwise, our model is not uncommon. Historically, this has been the most desirable practice type—or at any rate, the most popular—because we have the best of both worlds. This model provides the intensive patient-care aspects of a hospital, close contact with your fellow physicians, the teaching of residents, and control of one’s own success through private imaging offices. NORBASH: Small and medium-sized private practices are suffering from financial reform. As much as academic practices have been affected, it’s worse for other practices, so they’re looking to us as a safe haven. Payment reform has served both to hurt us in certain ways and to help us in other ways, but from the academic perspective, it principally has hurt private practitioners. RBJ: What are the risks of choosing one practice model over the others? BRESLAU: The risk of not having a job is the greatest risk of all, and there are not many job opportunities in general, so you can’t always weigh the risks of different options. Weigh the kind of career path you want instead. Look for stability, how the organization is positioned for the future, and who will be your mentors. If you start in a nonspecialized practice, might you eventually lack the skills required for a much more specialized practice—or vice versa—if you want to move to another job? For example, you might only do mammography, but you might want to try for a job that requires musculoskeletal expertise. There are hazards of overfocusing or underfocusing. ZINN: Traditionally, there’s a model for private practice in which you work your way into a partnership position, and you
will usually stay in that practice until you retire. The lack of security in teleradiology is more perceived than real—because the medical community does need you. As radiologists, we’re capable of flipping in and out of different businesses, carrying our skills with us. Some radiologists who object to teleradiology say they don’t want the uncertainty of a nonpartnership job. Granted, when you’re an independent contractor, you don’t have that kind of security—but in exchange, you have the nimbleness to multitask. You just have to have confidence in your skill set. To go into teleradiology, you have to be willing to thrive in an uncertain world and be entrepreneurial. In many private practices, you’re bound by their laws, some forbidding you to multitask. You’re forbidden to pursue certain medical endeavors on the side, and if you’re the kind of person who wants to grow your practice, you are not incentivized to increase revenue, as you will have to share it with all of the partners. On your own, you can seek other opportunities aggressively, without the feeling that you are subsidizing others.
58 Radiology Business Journal | December 2012 | www.imagingbiz.com
KAYE: I would not have gone into radiology if teleradiology had been my only option, but as a teleradiologist, you do have a flexible schedule; you’re paid by your productivity (you eat what you kill). There has been a lot of competition among teleradiology companies, and (combined with the slow job market) that has made compensation decrease. Teleradiology suits people who want to set their own hours, but the downside is that you’re not part of a team. The academic setting holds a lot of advantages if you like to teach, do research, and write papers. It’s generally viewed as more prestigious, although you don’t necessarily make more money at it. There is a great need for more information about the scientific, clinical, and business aspects of imaging, and much of that will come from academic research. That is exciting and can be professionally satisfying, but compensation in academia has been significantly less than in private practice. Many academic departments have a dean’s tax, to use the euphemistic term, whereby the revenue generated by the radiologists’ activities is shared with the medical school for its own purposes; the rest of the compensation is divided among members of the department. In private practice, the revenue is divided among the practitioners; there’s no institutional tithe. NORBASH: Our model is lower paid, typically, and time off can be lower—and there’s the additional need to do teaching, writing, and research, which not everyone enjoys. You might think academia is safer, but if those teaching and research interests aren’t there, there could be resulting performance issues. You might be a competent radiologist, but you also have to be competent in those other skill sets. If you’re not, you might not advance as you had hoped, and you might become unhappy or unfulfilled. There has to be a match of skills and ability. ZUCKERMAN: Any job has risks. For private practices, there’s the risk of consolidations (such as mergers and acquisitions), and you could be made redundant. For teleradiologists, there’s the risk of being viewed and valued as a commoditized employee who can be perceived as not having any value to
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with dStream, the first-ever digital broadband RF architecture that can boost SNR by up to 40 percent and increase throughput by as much as 30%. This new technology also eliminates the need for expensive RF hardware upgrades, making it easy to keep a state-of-the-art MR system. Digitization on the patient and digital broadband signal transfer deliver higher SNR dStream’s RF obtains a pure MR signal by digitizing the signal directly in the coil on the patient. After the signal is digitized, it is transferred to the reconstructor via high bandwidth fiber optics. Unlike conventional cables, high bandwidth fiber optic transmission maintains the full signal fidelity without the interference of noise due to cable cross-talk or long transfer distances over analog cables. This combination of digitization on the patient and fiber optic transmission results in SNR increases of as much as 40%. Increased throughput dStream can increase throughput by as much as 30%. TheFlexCoverage posterior coil is integrated underneath the tabletop, providing neck-to-toe coverage that virtually eliminates coil handling and positioning in about 60% of today’s typical routine cases. The lightweight and flexible FlexCoverage anterior coil provides a 60 cm foot-tohead coverage. All dStream coils feature the improved parallel imaging technique,
dS-SENSE, for increased parellel imaging benefits. Adding to the speed and simplicity, FlexConnect allows users to simply connect coils, while auto-eject provides easy table undocking. To further simplify workflow during the examination, the system automatically determines which coils and elements should be activated to produce the highest SNR for the selected area. This allows for fast and more consistent procedure times by virtually eliminating variability in exams – a major cause of unpredictable workflow.
dStream digital broadband architecture is available on all Philips Ingenia MR systems. To view the benefits of dStream, visit www.philips.com/dstream or contact your local representative.
dStream makes system channel independent Because dStream digitizes the signal in the coil, the MR system no longer dictates the number of channels available. This channel independence is an important advantage, because system owners are able to use coils with any number of channels without having to upgrade the RF receive system. By making it possible to easily expand clinical capabilities without major system overhauls, dStream may result in lower lifecycle costs and outstanding economic value.
The 21st Century | Practicing Radiology
I would not have gone into radiology if teleradiology had been my only option, but as a teleradiologist, you do have a flexible schedule; you’re paid by your productivity (you eat what you kill). —Alan Kaye, MD, FACR
add to a health-care community. For academics, there’s the risk that as 30 to 50 million more people become insured, there may be increased emphasis on just taking care of patients, at the expense of academics. RBJ: How do you see your practice model evolving? BRESLAU: To quote Lawrence Muroff, MD, “The future for radiology is great; the future for radiologists is uncertain.” There will be a robust demand for our services, but compensation may change unfavorably. Reimbursements are lower, despite our best efforts. Radiologists should be very open-minded about how to add value, over the coming years, and should look for opportunities to contribute as much as possible. We could have a role in stewardship of the use of expensive and critical technologies. We need to push the envelope, in terms of being a modern medical IT service. ZUCKERMAN: I believe that if you do the right thing for the patient and make your decisions with the patient in mind, it all will work out fine. I would not try to dissuade someone from private practice; it’s as viable as any of the other options. We’re a member of Strategic Radiology, a consortium of other large radiology practices across the country, and there are advantages to having a national presence. We’re aiming at sharing best practices and at taking advantage of economies of scale. One function is to act as a buying group for equipment and supplies. We’re by no means fully integrated as one corporate entity; members retain their individuality, at this point. This model hasn’t existed in medicine until recently, since the drive to consolidate had not previously been so great.
Practices like ours will need to accommodate the demands of the Patient Protection and Affordable Care Act, and to do that, we will have to be more patient centered and more data driven. That translates, for radiologists, to advising our colleagues (nonradiologists) on what studies to order in a certain situation. We use the word appropriateness: We have to educate our colleagues on appropriateness of studies. NORBASH: We’re going to incorporate technology more. Research methodology and sciences will be taught in a more organized way. I’m also optimistic about traditional clinical-radiology education. My sense is that many academic departments will evolve to a two-tier model: one tier of more specialized and highly focused researchers and another tier of practitioners who teach and are responsible for a greater percentage of clinical work. It will be dynamic and exciting, and radiologists have always been good at adapting to changing environments. Radiology will continue to get stronger by the day, and its utility will dramatically
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increase. To succeed, however, it will be crucial to sit at the table and communicate—to other physicians and to third-party payors—the value that we provide. KAYE: We are going to have many masters and more accountability. One hospital might have a PHO model; another might be going toward a system-based multispecialty group. Hospitals and groups of physicians are exploring accountablecare organizations, which would assume risk and share in gains from savings. There also will always be independent physicians who will require my services. I intend to participate in all of the above. My task is to provide services in multiple venues, and it will require a lot of administrative effort, on our part, to be all things to all people. Academic practices have already evolved so that clinical productivity will carry more weight in evaluation and compensation. Previously, you might not have been expected to interpret a certain number of exams a year; now, that productivity will be monitored, in addition to your teaching and research obligations. There will be people who are more research focused and some who are more clinic focused. All radiologists will face more benchmarks and the measurements that go with them. Institutions will look at turnaround time for a report, hours of service, and quality—especially if you practice in a hospital. Outpatient imaging will change in that compensation has gone down, both for professional and the technical components of reimbursement. Two very important influences on compensation are the commoditization engendered by corporatization of our profession and expansion of teleradiology, as well as the prospect that care will be bundled. With regard to bundling, what will be the compensation model for physicians? Nothing will change overnight, but looming out there is the prospect that instead of using a fee-for-service model, compensation might be determined as a percentage of the overall dollars available for physicians—or as a percentage of the amount allocated to a certain DRG per patient.
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The 21st Century | Practicing Radiology
The big picture is that no matter what options one chooses, compensation will decrease in the future. Any perceived differences among these pathways will tend to diminish, over time. How do you determine the value of each physician’s contribution, and who does it? The guidelines could be set by primary-care physicians only, by a larger group, or by various organizations. Teleradiology could commoditize what we do and force us to compete across a wider geographic region. As compensation goes down, groups also will avoid hiring new radiologists, and one way to do that is to outsource work to teleradiologists. Quality of care could suffer significantly because you’re focused on volume. Teleradiologists fulfill only one—albeit the most obvious— component of a radiologist’s role. Patients and referring physicians are best served when someone is there for consultation who knows the patients and the staff. To the extent that radiology is outsourced, it diminishes the attractiveness of radiology as a profession. ZINN: Teleradiology’s role will constantly shift, depending on who’s doing the imaging and interpretations, but in general, it will continue to grow. Nowadays, the computer screens in the offices of hospitals are the same as those in my home, so given the speed of computers, teleradiology will only get better, and it will be used more. I see a tremendous opportunity for radiologists to be general physicians and make money doing things they never
ACR Select (855) 475-2500 www.acrselect.org....................................................... 63 Affiliated Professional Services (800) 841-5200 www.affilprof.net......................................................... 49 Agfa (864) 421-1600 www.agfahealthcare.com............................................ 39
—Alan Zuckerman, MD
Compressus (202) 742-4297 www.compressus.com................................................ 61
thought they would do—things other than just reading films, such as working on medical reviews, giving expert testimony, performing evaluations for environmental studies, or being blinded readers for research projects. There also are programs out there related to wellness, longevity, and preventive medicine; lots of advisory/evaluation-related opportunities revolve around the health of the patient.
EOS Imaging (687) 564-5400 www.eos-imaging.com................................................ 43
RBJ: What are the lifestyle implications of today’s practice choices? ZUCKERMAN: The big picture is that no matter what options one chooses, compensation will decrease in the future. Any perceived differences among these pathways will tend to diminish, over time. NORBASH: In academic centers, the most successful researchers can be very driven; they can spend long hours on research, writing, and grant submission. There’s a gross misconception that academic radiologists have a relaxed lifestyle. You had better understand the sacrifices you will be making in lifestyle in exchange for fulfillment and contribution to society if the academic pathway is chosen. For some people, there’s nothing like academic medicine—but I would examine your motives and interests, to be sure. BRESLAU: People need to understand what they’re getting into: Keep an open mind; keep your options open; don’t burn any bridges; keep your skills up (so you can move around); look for opportunities, all along the way, to enhance your relationships with clinical colleagues; and look for opportunities to be more involved in direct patient interactions. Get out of the shadows.
Intelerad (514) 931-6222 www.intelerad.com.................................... 28, 32, 34, 66
Joseph Dobrian is a contributing writer for Radiology Business Journal.
Zotec Partners (317) 705-5050 www.zotec.com...................................................... 19–22
62 Radiology Business Journal | December 2012 | www.imagingbiz.com
Fujifilm Medical Systems (800) 431-1850 www.fujimed.com.................................................... 5, 55 Hitachi Medical Systems America (800) 800-3106 www.hitachimed.com.................................................... 2 iCRco Inc (310) 921-9559 www.icrcompany.com................................................. 45 Integrated Medical Partners (877) 816-1467 www.integratedmp.com.............................................. 13
LifeIMAGE (617) 244-8511 www.lifeimage.com..................................................... 17 MMP (800) 895-0002 www.cbizmmp.com....................................................... 7 Nuvodia (509) 688-6342 www.nuvodia.com....................................................... 25 PHC Philips (800) 934-7372 www.philips.com/dstream .......................................... 59 ProScan Imaging (877) PROSCAN www.proscan.com...................................................... 42 RadNet (864) 234-7430 www.erad.com............................................................ 41 RamSoft (888) 343-9146 option 2 www.ramsoft.com....................................................... 65 Regents Health Resources, Inc (800) 423-4935 www.regentshealth.com......................................... 50–52 RSNA (800) 381-6660 www.rsna.org.............................................................. 57 Sectra (203) 925-0899 www.sectra.com.......................................................... 47 Tandem Radiology (855) 321-3030 www.tandemradiology.com......................................... 37 Virtual Radiologic (vRad) (800) 737-0610 www.virtualrad.com....................................................... 3 Visage Imaging (703) 858-5758 www.visageimaging.com............................................ 11 VMG Health (214) 369-4888 www.vmghealth.com..................................................... 9
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FinalREAD
What I Learned at Pearl Harbor The people of the United States, hardwired to get things done, are capable of greatness under skilled leadership By Curtis Kauffman-Pickelle
A
s a most tumultuous year comes to a close, let’s reflect a bit on what makes the people of the United States unique, what drives us toward achievement and success, and why the health-care institutions in this amazing country will continue to thrive—despite significant headwinds and uncertainty. Our cultural DNA is structured in a way that makes it certain that whatever it is that needs to get done, we will get it done. Of that, I have no doubt. In the process, we will carve a path toward prosperity by doing the right things, for the right reasons, and in support of those whose care has been entrusted to us—the patients who depend on our knowledge and commitment, especially those who have given much to build this country (and who now face declining health). I recently traveled with a group on an educational and fact-finding tour to Hawaii (yes, it was tough duty), and included in the group were three World War II veterans. One of the group, who continues to learn all that he can about how our country navigates the geopolitical landscape, is 97 years old, vitally engaged, relevant, and a precious asset. Unfortunately, the men and women in this demographic group are the ones we too often identify as patient number so-andso, or as the 3 pm chest CT, rather than by their names. The least they deserve from us is the dignity and respect that should be instinctive, but can nevertheless be taught as part of a top-level customer-service program (more on that later). After a lifetime of study of (and interest in) World War II—and after four years in the military in the late 1960s—I was simply awed by what I learned during this most recent tour of Pearl Harbor. It’s something that had not occurred to me in the past, yet it is profound in its implications for who we are and how we function, both as parts of
a nation and, by extension, as health-care professionals.
Rising to the Task Amid the incredible destruction of the surprise attack that sank 11 battleships and countless fighter planes and bombers on December 7, 1941—despite the terrible loss of life, the broken spirit, and the daunting tasks that the survivors faced—the country came together and immediately identified a way forward, along with the strategies and solutions that would propel it toward
what is apparent—being able to see beyond the existing confusion and chaos. We, in this profession, are both obliged and honored to serve, and have an opportunity to do so while building a comfortable lifestyle—not only for ourselves, but for those we employ as well. We are given the privilege of leadership: moving others toward the realization of a vision that rises out of mission, strategy, and tactics intended to align our people and assets around a central organizing principle that is greater than the sum of its parts. We
Leadership quite often means that one will be tested in ways that one might not have anticipated; it means thinking beyond what is apparent—being able to see beyond the existing chaos and confusion victory. In a stunning turnaround, we were able to rebuild and return eight of the 11 badly damaged and sunken battleships to the fighting fleet within just eight months of their descent to the floor of the harbor. That’s simply incredible. Think of the enormity of this task and the leadership required to organize, manage, and implement the effort. I left the conference absolutely stunned by this breathtaking accomplishment and by the dedication, will, and prowess of those who made this happen. What are the lessons for us? There are two. First, as those of the greatest generation come into our orbit in the twilight of their lives (we are steadily losing them), we need to notice them, treat them well, and be at the top of our game in seeing each encounter with them as sacred. Look into their eyes. Thank them. Treat them with the ultimate respect. Second, don’t be discouraged by the state of our health-care profession as it gets battered about, comes under fire, or is otherwise pressured in this most difficult of times. Leadership quite often means that one will be tested in ways that one might not have anticipated; it means thinking beyond
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should never lose sight of this or take its value to us for granted. Visualize, build, succeed, and give back. Along the way, make sure that you notice and thank those who have made it all possible by their sacrifice. Be grateful for all of it. Curtis Kauffman-Pickelle is publisher of imagingBiz.com and Radiology Business Journal, and is a 25-year veteran of the medical-imaging industry.
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Introducing the new InteleConnect™ Clinical Hub. With its Universal Viewer, Intelligent Worklists and Patient Activity Dashboard, GPs to ED physicians now have anywhere, anytime access to streamlined views of only their patients’ images and activity across the imaging workflow for any internal or third-party PACS or DICOM archive. The Clinical Hub Collaboration Suite lets referrers and radiologists work together like never before, flexibly and securely granting access and sharing exams in a single click, wherever they’re stored, instantly delivering tailored multi-level notifications and effortlessly managing critical results. With the new discrepancy management tool, window leveling presets and instant messaging service, clinical care teams can quickly engage, review and validate impressions to improve quality of care without constraints. Visit us at RSNA 2012, Booth 4814
www.intelerad.com/rbj13 | 1-888-246-9774 | sales@intelerad.com © 2012 Intelerad Medical Systems Incorporated. All Rights Reserved.