Radiology Business Journal April/May 2012 by imagingBiz

April/May 2012

Clinical Decision Support

Growing a Decision Tree in Radiology Hospitalâ&#x20AC;&#x201C;Radiologist Alignment: Destabilization, Discord, and Accord page 46 Massachusetts Health Reform: The Radiology Experience page 52 Radiology and the IDN: The Big Shift page 60

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April/May 2012

Clinical Decision Support

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CONTENTS

April/May 2012 | Volume 5, Number 2

Features

24 Clinical Decision Support: Planting a Decision Tree in Radiology

By George Wiley

With the Medicare Imaging Demonstration underway, imaging utilization, outcomes, and the future of the prior-authorization process are all on the table.

The United State of Imaging in Tacoma: Creating a Consistent Service Across Multiple Imaging Stakeholders

Disparate health systems and radiology groups are collaborating to meet patients’ needs through consistent radiology service with measurable quality improvement.

Radiologist–Hospital Alignment: Destabilization, Discord, and Accord

As health-care providers seek greater alignment to prepare for more accountability, radiologists are challenged to see eye-to-eye with hospitals on terms.

Massachusetts and Healthcare Reform: The Radiology Experience

The chair of radiology at a prominent Boston hospital chronicles the changes occurring at breakneck speed in Massachusetts in response to health reform—and their impact on radiology.

Radiology and the IDN: The Big Shift

By David Rosenfeld

By Julie Ritzer Ross

By Cheryl Proval

By Matt Skoufalos

Managing radiology across the integrated delivery network (IDN) means condensing the value chain along logistical lines, considering the population’s health needs, and—inevitably—migrating technology into the community.

4 Radiology Business Journal | April/May 2012 | www.imagingbiz.com

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CONTENTS

April/May 2012 | Volume 5, Number 2 Publisher Curtis Kauffman-Pickelle · ckp@imagingbiz.com

EDitor Cheryl Proval · cproval@imagingbiz.com

Departments

Art Director Patrick R. Walling · pwalling@imagingbiz.com

AdView

Vertigo

The Bottom Line

Technical Editor Kris Kyes Associate Editor Cat Vasko · cvasko@imagingbiz.com

By Cheryl Proval

Online Editor Lena Kauffman · lkauffman@imagingbiz.com

CT Dose Reporting in California

Priors 12 Meaningful Use | MU2: Value Proposition for Radiology 16 Reimbursement Models | ACE: Adventures in Bundled Payment 21 Social Media | Why Radiologists Should Tweet, Blog,

63 64

Staff Writer Matt Skoufalos · mskoufalos@imagingbiz.com

By John M. Boone, PhD, FAAPM, FACR

and Exploit Social Media Numeric | Families Continue to Struggle With Paying for Medical Care

Contributing Writers John M. Boone, PhD, FAAPM, FACR; Julie Ritzer Ross; David Rosenfeld; George Wiley Sales & Marketing Director Sharon Fitzgerald · sfitzgerald@imagingbiz.com Production Coordinator Jean Lavich · jlavich@imagingbiz.com Editorial Coordinator Thanh Le · tle@imagingbiz.com

Advertiser Index

Webmaster Robert Elmquist · relmquist@imagingbiz.com

Final Read The Supersized Generation By Curtis Kauffman-Pickelle

Corporate Office imagingBiz 17291 Irvine Blvd., Suite 105 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, 17291 Irvine Blvd., Suite 105, Tustin, CA 92780. US Postage Paid at Lebanon Junction, KY 40150. April/May 2012, Vol 5, No 2 © 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, 17291 Irvine Blvd., Suite 105, 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 | April/May 2012 | www.imagingbiz.com

AdView Vertigo

A confluence of uncertainties adds up to a vertiginous environment for all physicians, but especially for radiologists

o matter how good your service is or how expert and reliable the care, if someone isn’t taking care of the back of the house, health care is out of business. I learned that the hard way when my wonderful dentist (who used to tell her elderly clients that there was a sale on fillings: two for $25) could no longer pay the rent, sold her business to another dentist with dollar signs in her eyes, and left to teach part-time at the University of Southern California and volunteer at the Venice Free Clinic. Fortunately for my dentist, her husband was gainfully employed, but I’ve been searching for a suitable replacement ever since. That is the genesis—and continues to be the basis—of the uneasy relationship between physicians and health-care administrators: No money means no mission. As a health-care business journalist, I have walked the tightrope between physician (specifically, radiologist) and administrative interests for the past 15 years, seeking that happy place where the twain could meet concerning quality, service, technology, and health policy. What something cost, until recently, was a verboten topic. I’ve seen some pretty dismissive behavior by some physicians in the presence of administrators, and I’ve also heard some embittered talk from administrators about radiologists. That’s all water under the bridge now. Administrators and physicians have a quest in common, and it’s all about the money: If you don’t find a way, together, to reduce the cost of care (and preserve or improve quality), then we will end up with a national health service or go broke paying for what we now have. Today, after many years of wary truce, physicians and administrators find themselves seeking common ground. At the

moment, however, the ground is anything but steady. If you feel like Jimmy Stewart atop a bell tower, I’m not surprised. The confluence of uncertainties adds up to an extremely vertiginous environment for all physicians, but especially for radiologists.

The Big Conversation At present, the big conversation in physician–hospital relations revolves around alignment; now, more than ever, a practice’s ability to get along with others is of paramount importance. Despite several well-publicized hospital–radiology practice meltdowns, there is no evidence that radiologists have greater difficulty getting along with hospital administrators than other specialty physicians have. Radiologists do, however, have some particular challenges, and more than a few of your health-care brethren are sitting on the sidelines, indulging in some good old schadenfreude at your expense. At a recent health-care conference, a specialist in mergers and acquisitions observed that radiologists have been living high on the hog for a lot of years—and now it’s over. What are these challenges that are peculiar to radiology? You know them well by now, but here they are again: First, when digital imaging delivered you from the hospital basement, it also dramatically reduced the interactions you had with your physician colleagues, not to mention hospital administrators. A centralized reading room might be efficient, but it’s also isolating. Second, at a time when the big tanker that is health care in the United States is turning toward a patient-centered approach, radiology finds itself focused on (and beholden to) referrers. Third, after many years of lavish use, imaging became a cost center—not just for the government, which foots half the nation’s health-care bill, but for the hospital as well. In engaging radiologists in the task of managing imaging utilization, hospitals are asking radiologists to shrink their market.

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A “Twilight Zone” Moment It is disconcerting, and more than a little humbling, to be asked by your administration to do away with inpatient imaging, but that is precisely what Jonathan Kruskal, MD, PhD, reported (maybe a bit tongue in cheek) in his presentation on Massachusetts health-care reform (see the article on page 52) at last year’s RSNA meeting. It is the kind of request that makes you wish very hard for a “Twilight Zone” moment, when suddenly everyone goes back in time—maybe just back to the 1980s, before cross-sectional and functional imaging came into their own—and has to make do with exploratory surgery and, God forbid, the stethoscope. Sure; you want to do away with imaging? Take this! Many things have changed in the past five years, but one thing remains the same: Medical imaging is as valuable and critically important to patient care as ever, and probably more so. All of the population management in the world will not keep everyone healthy; people will continue to get sick and have accidents, and when they do, their physicians will need medical imaging to find out what is wrong, to target therapy accurately, and to monitor treatment. These tools will only improve with the integration of genomics and proteomics. If you have been waiting until the writing is on the wall, however, to do something about that little trinity of challenges, it is on the wall now. You have met the enemy, and it isn’t the hospital administrator: It is inaction. The best defense, right now, is having a great offense. Cheryl Proval cproval@imagingbiz.com

The Bottom Line

CT Dose Reporting

in California

On July 1, California providers of CT exams will be required to meet new dose-reporting parameters, revealing logistical and technical challenges

any of the accidents that spurred press coverage of CT overdoses in recent years occurred in California. This led to enactment of the state’s SB 1237 (and subsequent cleanup legislation), which will take effect on July 1, 2012. The law’s basic provisions are that the socalled CT dose—the volumetric CT dose index and the dose–length product— must be recorded in the interpreting physician’s report and that the volumetric CT dose index reported on the CT scanner console needs to be within 20% of the volumetric CT dose index measured by a medical physicist each year (for a few of the most common CT protocols). Additional provisions apply to radiation therapy. The state is to be notified if: • a fetal dose event of over 50 mSv occurs, if the patient was known to be pregnant and if the procedure was not approved in advance by a physician; • except in the case of patient motion, a repeated CT procedure occurs that was not ordered by a physician and that results in an effective dose of more than 50 mSv (to the whole body) or 500 mSv (to an organ/tissue or to the skin); • an exposure occurs to the wrong body part and an effective dose of more than 50 mSv (to the whole body) or 500 mSv (to an organ/tissue or to the skin) is reached; or • CT exposures occur that result in unanticipated epilation/erythema or permanent damage to organ function.

The California Scramble Since this law was signed, many radiology departments in California have been scrambling to try to meet its requirements. The meat of the legislation is not what has spurred the most effort. In order to know whether a patient has had so-called doses that exceed the reporting

limits, the provider has to record and keep track of the so-called doses. I use the term so-called dose because the law states that for each patient undergoing a CT scan, the volumetric CT dose index and dose–length product must be recorded. These are not doses; they are dose indices—which, in many cases, are not accurate measures of patient dose.1 While many patients have a single CT scan, with or without contrast (with one dose–length product and one volumetric CT dose index), some patients have chest, abdomen, and pelvis CT scans— some with and some without contrast. A three-phase liver CT exam, for example, requires numerous individual scans, each generating its own volumetric CT dose index and dose–length product. For contrast CT studies, there are also bolus-monitoring procedures that qualify as an individual CT scan series. In some cases, the sum of the volumetric CT dose index and dose–length product are being recorded; while that might meet the letter of the law, in many cases, it leaves significant ambiguity in the recorded data, should a medical physicist have to estimate patient dose for those procedures. I strongly advocate recording a series-by-series breakdown of volumetric CT dose index and dose–length product. At many institutions, it has been anticipated that the radiologist would simply dictate the volumetric CT dose index and dose–length product into the report, but such an approach is inefficient and can lead to inaccurate, inconsistent reporting. Many radiologists would be likely to resist such an approach. Many institutions are moving toward an IT solution that will both let them comply with the law and eventually add efficiency to report generation. The law mandates that the volumetric CT dose index and dose–length product be passed from the PACS to the radiology report—but once this channel of communication has been established, why stop there? The technical

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By John M. Boone, PhD, FAAPM, FACR

information associated with the CT scan (such as protocol parameters and, in some cases, contrast-injection parameters) is available. These data could and should be automatically communicated between PACS and RIS. This data transfer could then be extended to structured reports for MRI exams and other imaging procedures as well.

Fissures Revealed The recent focus on CT dose reporting has revealed a number of issues that should be addressed in radiology facilities. For example, in many facilities, the name used for a given CT protocol differs between scanners. This makes it difficult for a facility (or dose registry) to get a handle on CT doses between CT scanners, and some work is then required to rename protocols consistently or to remap them in software so that they are tallied uniformly. The California CT dose legislation has created a market for software companies working at the IT level in radiology, and several companies have been developing IT solutions that meet (and exceed) the requirements of the law. The tools being created will give radiologists, medical physicists, and radiology administrators a better ability to understand the doses used in their facilities and to update high-dose CT protocols. Despite the additional cost of these software solutions, the information collected should lead to more consistent CT practices across California—and, ultimately, to better patient care. John M. Boone, PhD, FAAPM, FACR, is professor and vice chair of radiology at the University of California–Davis. Reference 1. McCollough CH, Leng S, Yu L, Cody DD, Boone JM, McNitt-Gray MF. CT dose index and patient dose: they are not the same thing. Radiology. 2011;259(2):311-316.

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{priors} meaningful use

MU2: Value Proposition for Radiology

n March 7, 2012, the proposed rule1 governing stage 2 of the CMS incentive program for electronic health records (EHRs) and the 2014 EHR certification criteria2 were published to generally favorable reviews from organized radiology. Mike Peters, director of legislative and regulatory affairs for the ACR®, explains why the ACR has spent so much time monitoring the program and why the proposed rule for stage 2 represents a significant improvement in the program for radiologists who intend to participate.

statutory definition of the hospital-based professional, we estimated that almost all of our remaining physician members would be eligible for the program. Our ACR IT and Informatics Committee has been leading us on this issue, chaired by Khan Siddiqui, MD, and Keith Dreyer, DO. Between them, they’ve volunteered hundreds of hours.

RBJ: I understand that the Health Information Technology for Economic and Clinical Health (HITECH) Act and its meaningful-use regulations have kept you very much occupied. How much time are you spending on this?

Peters: There’s no way to know how many people are actively pursuing compliance. What we have right now are the attestation statistics from CMS. As of February, CMS showed that 269 diagnostic radiologists had successfully attested and received dollars; 29 interventionalists, 86 radiation oncologists, and seven nuclear-medicine physicians received meaningful-use dollars, as well. When CMS and the ONC talk about statistics associated with the program, they often trump up registration numbers, but that’s a pretty meaningless measure for judging success. You have to look at Medicare attestation statistics, which actually show that the rates are pretty low, across the physician community as a whole.

Peters: As far as the EHR incentive program goes, we have been following this issue very closely since late 2008, when the HITECH language was first tacked onto the stimulus package. We’ve actually monitored just about every federal initiative, meeting, and event pertinent to this issue over the past three years. I can’t think of any physician association of any specialty, including the AMA, that has spent as much time as the ACR has on this issue. The Office of the National Coordinator (ONC) for Health IT has two extremely active federal advisory committees, with various workgroups and tiger teams under them. It takes a lot of time to follow all of that. We’ve always followed this program under the assumption that somewhere between 50% and 70% of our membership might be eligible, based on the original statute and the CMS stage 1 proposed rule. When the Continuing Extension Act of 2010 removed outpatient hospital settings from the

RBJ: How many practices are you aware of that attested to meaningful use in year one? Do you have a sense of how many might try to attest this year?

RBJ: What will practices forfeit if they start later than 2012? Peters: The CMS notice of proposed rulemaking did not propose any changes to the incentive amounts or to the payment adjustments that begin in the penalty phase. All of that is prescribed by Congress in the statute, so CMS doesn’t have any wiggle room there. If people start after 2012, they are looking at reduced incentives, over time.

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Mike Peters

As of February, CMS showed that 269 diagnostic radiologists had successfully attested and received dollars; 29 interventionalists, 86 radiation oncologists, and seven nuclear-medicine physicians received meaningful-use dollars, as well. —Mike Peters ACR

You can begin your first EHR reporting period in 2012 and still get the same amount of incentives over five consecutive compliance years as you would have if you had started last year. In 2013, the incentive amounts go down; then, 2015 is the beginning of the payment-adjustment (or penalty) phase. The way CMS is proposing it, if you’re not compliant by July 3, 2014, you will get the 2015 payment adjustment. As the rule is proposed, you would have to complete your attestation no later than October 1 2014—which is about three months earlier than many people expected, based on the attestation deadlines in the existing regulations.

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priors

The trade press has been focusing on the image-access menu-set objective, but what I think is probably a bigger deal, for compliance by radiologists, is in the ONC’s proposed rule. —Mike Peters

RBJ: The ACR’s initial response to the proposed rules for stage 2 seems positive; some of the accommodations requested were included. What were they? Peters: I would say we are cautiously optimistic about the content of the

proposed rules, but we expect many changes—some positive and some negative—before the final rules are promulgated, later in 2012. We have a pretty big platform of requests that we’ve been pushing for in regulations from both CMS and the ONC. I would say that almost all of our requests were addressed, to some degree. The trade press has been focusing on the image-access menu-set objective, but what I think is probably the bigger deal, for compliance by radiologists, is in the ONC’s proposed rule. It is proposing to remove the prior comprehensiveness requirement from the regulatory definition of certified EHR technology. In order to have certified EHR technology now, eligible professionals need to implement a certified complete EHR or a combination of certified EHR modules comprehensively covering all of the certification criteria, including any criteria that correspond with meaningful-use requirements from which CMS granted them exclusions. For example, electronic prescribing and computerized provider order entry (CPOE): If an eligible professional meets the exclusion for those two CMS requirements, the ONC still requires the eligible professional to have access to the functionality to meet those objectives, even though CMS doesn’t require the physician to use it. It doesn’t seem logical. We’ve been pushing for a change to that definition for a long time. For stage 2, the way the ONC is proposing to do it now is to have a pool of base EHR certification criteria. After that, eligible professionals need to implement technology certified for the criteria

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that correspond with objectives that they are actually meeting. It’s a huge leap in flexibility. RBJ: In general, specialists have been critical of the regulations in that they did not accommodate specialty practice patterns. Do stage 2 regulations better reflect the needs of the specialist (specifically, the radiologist)? Peters: The CMS proposed rules contain pretty much a continuation of the existing paradigm. They still have the exclusions, which are key for specialists. They still have the menu-set discretionary measures, although there are fewer of them. In the proposed rule, there are more than 100 clinical quality measures, and many of them come from interventional and radiation-oncology domains. Granted, a lot of those were in the CMS proposed rule for stage 1, but were removed from the final rules because they were not electronically specified. CMS does intend to whittle down that list to a more manageable level. In terms of radiology’s interests, there also is the proposed change to the CPOE objective, which would include radiology orders for a referring physician. It doesn’t tie specifically to clinical decision support guided by appropriateness criteria, as we would like it to do. In addition, there’s the imaging menuset objective that a lot of folks have been focusing on: While it’s extremely positive, there are some issues with the wording of that. It’s not clear (based on a conflict between the language in the denominator and the language of the exclusion) whether CMS intended it to be for ordering or rendering physicians. RBJ: If data collection was the objective of stage 1, what do you hope will be added to meaningful-use stage 2 and stage 3 regulations to assist radiology practices? Peters: Right now, we’re just in the comment period. We are soliciting comments from our members and our leaders. We’re talking to our allied organizations in other specialties, as well as to the AMA and to trade associations. We have some meetings with agency staff

In terms of radiology’s interests, there also is the proposed change to the CPOE objective, which would include radiology orders for a referring physician. It doesn’t tie specifically to clinical decision support guided by appropriateness criteria, as we would like it to. —Mike Peters

lined up; we’re just in the informationcollection phase and are figuring out what our comments on items of interest, in both proposed rules, will be. We have a list of things that are interesting or concerning and a draft summary of comments. We will probably provide comments on each individual objective and measure. I mentioned the ONC’s proposed new flexibility for the regulatory definition of certified EHR technology; one challenge associated with that is that the ONC wouldn’t be planning to implement that new flexibility until 2014, so that’s not ideal. We’ll definitely be commenting on that. RBJ: Do you have any advice for practices that are struggling to find the implications (for themselves and for their patients) of the stage 2 proposed rules? Peters: Notices of proposed rulemaking should not be used, by anyone, for any purpose other than the development and submission of formal comments. Instead of attempting to predict what the final rules will look like later this year, radiologists, practices, hospitals, and radiology health IT vendors should be looking at what the regulations are currently. For radiologists struggling to comply due to circumstances outside their control, there is going to be some opportunity to apply for the future significant-hardship exemptions, but those have statutory limits associated with them. You can’t be excluded from the penalties for more than five years, for example. Barring additional legislative help in the future, the significant-hardship exemption mechanism is the only leeway CMS

currently has for helping people who are unable to comply. If people want to comply, and it makes business sense to do so, they should be reading what the regulations are now, going to the ACR’s resource page (www.acr. org/SecondaryMainMenuCategories/GR_ Econ/Meaningful-Use-Resource-Center. aspx), and going to the CMS page and looking at its educational materials (www. cms.gov/Regulations-and-Guidance/ Legislation/EHRIncentivePrograms/ EducationalMaterials.html). You should also look at what technology you have access to now and whether it meets the regulatory definition of certified EHR technology. You can check a product’s certification status on the ONC’s certified health IT product list website (oncchpl. force.com/ehrcert?q=CHPL). RBJ: Overall, do you think that attestation is worthwhile? Is this program improving care? Peters: There is such a variety of practice scenarios and settings in our community that it’s hard to say what works for everybody, particularly on an issue like this. Someone might work in a small community hospital that’s unwilling to provide them the technology and the data they need. Some are in much better positions. Sitting in this position, I’ve heard mostly from those in the radiology community who are frustrated and encountering issues with compliance. If people comply and have success with a federal program, they generally don’t call the ACR’s government-relations office. The ACR’s objective is to identify the barriers, either real or perceived,

and advocate improvements to the regulations, so that all of our eligible members can participate, if they choose to do so. We’ve had some limited success in influencing the original stage 1 rulemaking, as well as the current proposed rules, but this effort has been (and will continue to be) an uphill battle. There are literally hundreds of national organizations, companies, patient groups, and others who are advocating their respective positions related to this issue—and there is, unfortunately, very little sympathy in the government (and many other stakeholder communities) for the concerns of medical specialists. From the broader perspective of healthcare policy, there are obvious benefits to having the radiology community take part in the federal government’s efforts to standardize health IT and promote information exchange. Radiology has seen, firsthand, how things such as CPOE with integrated appropriateness clinical decision support, as well as imaging data exchange, can enhance decision making, improve patient care and safety, and reduce costs. If the federal government catches on and implements policies that establish incentives for appropriate referring behaviors and data sharing, diagnostic imaging will eventually get the perpetual kick-me sign off its back. More important, in this day and age, US patients expect radiology information to be secure, accessible, and shareable alongside their other pertinent medical data. —David Rosenfeld References 1. Medicare and Medicaid programs; electronic health record incentive program—stage 2. Fed Regist. http:// www.gpo.gov/fdsys/pkg/FR-2012-03-07/ pdf/2012-4443.pdf. Published March 7, 2012. Accessed April 17, 2012. 2. Health information technology: standards, implementation specifications, and certification criteria for electronic health record technology, 2014 edition; revisions to the permanent certification program for health information technology. Fed Regist. http://www. gpo.gov/fdsys/pkg/FR-2012-03-07/ html/2012-4430.htm. Published March 7, 2012. Accessed April 17, 2012.

www.imagingbiz.com | April/May 2012 | Radiology Business Journal 15

priors

reimbursement models

ACE: Adventures in Bundled Payment

ith a bundled-payment pilot program instituted by the Patient Protection and Affordable Care Act set to begin in 2013, it is interesting (and perhaps instructive) to look at a three-year CMS project nearing its endpoint—the Acute Care Episode (ACE) Demonstration1 for orthopedic and cardiovascular surgery—through the eyes of one participating radiology practice. It was purely by chance that Phil Russell, MBA, CEO of South Texas Radiology Group (San Antonio) first learned that Baptist Health System, San Antonio, had submitted a bid to be one of five hospital systems participating in the program. After Baptist Health System announced that it had been awarded the contract, a meeting was called to explain to all providers how they would be affected.

efficiency of care. Another stated purpose is to test whether the provision of price and quality outcome information affects the choices made by Medicare beneficiaries about where to have their procedure done. In addition, the program employs a shared-savings element, but in this case, it is the patient, not the provider, who receives the incentive payment from the government. At Baptist Health System, it ranges from $84 to $1,199, depending on the DRG involved. The carrot for physicians—including cardiologists, orthopedists, radiologists, anesthesiologists, and hospitalists providing services to ACE patients at Baptist Health System—is receiving 100% of Medicare’s allowable fees, not the customary 80%. If the hospital delivers care for less than the bundled rate and succeeds in meeting specific quality measures—including ensuring that

We are getting 100% of the Medicare allowable, whereas CMS usually pays 80%. —Phil Russell, MBA South Texas Radiology Group

The program is testing the use of bundled payment for a selected set of inpatient episodes of care for orthopedic and cardiovascular procedures. In all, 28 cardiovascular DRGs are included, ranging from cardiac-valve and other major cardiothoracic procedures with cardiac catheterization and multiple complications to cardiac-pacemaker revision (except device replacement without complications). Nine orthopedic DRGs are included; they range from bilateral or multiple major-joint procedures of the lower extremity with multiple complications to knee procedures without postdischarge occurrence of infection and without complications. According to CMS,1 the project’s purpose is to align hospital and physician incentives for improved quality and

antibiotics are administered an hour prior to surgery and stopped 24 hours later—it keeps the additional money as profit. Unfolding in Texas In the San Antonio market, ACE was rolled out using radio spots alerting patients to the fact that if they used Baptist Health System for a heart procedure or joint replacement, they would not only be excused from copayments, but also would receive as much as $1,199 as an incentive. Russell admits some discomfort in knowing that his tax dollars were used for radio spots, although ultimately, the cost to the government is less than is typical for the 37 DRGs in the ACE program. “The hospital bid some number that was less than the standard Medicare payment, and some portion of that

16 Radiology Business Journal | April/May 2012 | www.imagingbiz.com

difference, which was pure savings for CMS, was then the bounty, if you will, that was paid to these individual patients,” he notes. According to the Washington Post Wonkblog,2 Baptist Health System bid about 5% less than the typical rate. In order for the hospital to make up for the discount—and cover the additional 20% that it paid physicians, plus incentives that surgeons were eligible for if they achieved certain quality levels—it had to find savings in supply costs, Russell speculates. “We are getting 100% of the Medicare allowable, whereas CMS usually pays 80%—so for the physician, there is an arbitrage, which is coming out of the hospital’s pocket,” he explains. “The hospital has to make that up (plus something else), and my understanding is that the overwhelming majority— perhaps all of the money that it was counting on—was going to come by way of reduced supply cost.” Squeezing the Suppliers Russell believes that Baptist Health System assembled the orthopedic surgeons and stipulated that participation in ACE was contingent on, for instance, deciding on two kinds of knee prostheses that the hospital would then bid out to the vendors at a discount. “If they are making money on it, they must have done a tremendous job squeezing the supply vendors,” Russell notes. In fact, about 90% of the efficiencies the hospital achieved came from savings in supply costs, according to Michael Zucker, the system’s chief development officer.2 From the radiologist-practice perspective, the ACE patient flow is opaque: There is no prior knowledge of the identity of ACE patients. “We get our data downloads from the hospital daily, as we always have; we sort, code, and send out claims,” Russell says. Subsequently (generally within two weeks), the practice gets a notice from Medicare explaining that the claim for a particular patient has not been paid and, instead, has been forwarded to the payor that is administering payment for ACEprogram patients.

Within two or three weeks, the practice receives payment (from a thirdparty administrator hired by Baptist Health System) for 100% of the Medicare allowable amount. Russell reports that for 2% of patients (or fewer), there is a subsequent determination—sometimes, as much as a year later—that a patient should not have been part of the ACE program. For those patients, the practice is required to refund payment to the third-party payor and resubmit a claim to Medicare. “Generally, it seems to have worked fairly well,” he reports. “From a radiologist standpoint, an argument could be made that this is a wonderful improvement over the normal course of business.” Reading the Scorecard In June 2012, the program will have run its three-year term at Baptist Health System, and some time during the next year, CMS is expected to publish the results. Although Baptist Health System requires surgeons to meet quality measures, they are not part of the public advertising campaign, and Russell is unaware of the metrics applied. Based on the reduced cost to the government, and barring any unforeseen negative outcomes, Russell suspects that CMS will be pleased. “They really don’t care how you bring it together,” he suggests. “They were just focused on the willingness of some people to accept less money than they were used to paying.” While the program seems to be working for Baptist Health System and the attending cardiologists and orthopedists with whom Baptist Health System is aligned, Russell suggests that engaging radiology, anesthesiology, and hospitalists potentially could have resulted in further cost efficiency. “The hospital, for whatever reason, didn’t engage each and every individual physician on its medical staff as to how this was coming about, perhaps because of time constraints,” he says. Acknowledging that he is not a physician, Russell speculates that perhaps some number of preoperative or postoperative exams might not have been necessary.

“It may well be that those procedures have been done for such a long time that the standards of care are established and appropriate, and maybe there aren’t any savings to be had,” he says. If there are services involved from physicians other than the surgeon, he adds, it would benefit the sponsors of such projects to explore potential savings opportunities with those other physicians. Russell can’t say whether the project has resulted in any increase in the number of imaging exams associated with the selected DRGs or whether the hospital achieved the anticipated increase in activity for the 37 designated DRGs. “Because of the volume of activity through a practice like this, it might have quadrupled or even moved the volume of these procedures by a factor of 10, and

Generally, it seems to have worked fairly well. From a radiologist standpoint, an argument could be made that this is a wonderful improvement over the normal course of business. —Phil Russell, MBA

that just wouldn’t appear on our radar,” Russell says. Russell suspects that patient traffic continues to be driven by primary-care and specialist physicians who have their preferences about where they like to provide services; in addition, some will not have staff privileges at Baptist Health System facilities. “It is a stretch to think that the patient is going to hear a radio ad, call up that hospital, and be routed to some random physician,” he says. While 78% of surgeons received bonuses based on quality measures, there was some grumbling about whether they received their fair share. As Ty Goletz, MD, of the Center for Orthopaedic Surgery and Sports Medicine (San Antonio), tells the Washington Post, “The hospital got $8 million, and the surgeons got $1 million.

That’s not necessarily looked on favorably by physicians.”2 Ultimately, Russell pronounces the program benign—on a superficial level. “They will gather some statistics and say the quality was better, worse, or the same,” Russell predicts. “Unless it shows that this patient population had twice as many deaths as the general population, I think everyone will look at the data and say this seems to be OK. The government saves some money; let’s do it everywhere.” He adds a caveat to that assessment: Theoretically, if the hospital is unable to achieve the cost saving at the supply level, it could decide to pay physicians a percentage of the Medicare allowable fee. “That’s the danger and the threat, in the long run, for these kinds of programs,” he warns. “If a hospital set out to control all of the dollars and control all of the shots, there are all kinds of implications about who would want to work for the hospital that tried to play bully with that kind of situation. In this instance, it has worked, but that is not to suggest that this is a panacea that everybody should be looking for to simplify his or her life.” —Cheryl Proval References 1. CMS. Medicare Acute Care Episode Demonstration for orthopedic and cardiovascular surgery. https://www.cms. gov/Medicare/Demonstration-Projects/ DemoProjectsEvalRpts/downloads// ACE_web_page.pdf. Accessed April 16, 2012. 2. Kliff S. Health reform at 2: why American health care will never be the same. Washington Post Wonkblog. http://www.washingtonpost.com/blogs/ ezra-klein/post/health-reform-at-2-whyamerican-health-care-will-never-be-thesame/2012/03/22/gIQA7ssUVS_blog. html. Published March 24, 2012. Accessed April 16, 2012.

www.imagingbiz.com | April/May 2012 | Radiology Business Journal 17

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Imaging Market File

Forecasting Imaging Use Under Health-care Reform Introduction: A key element of the Patient Protection and Affordable Care Act (PPACA) is extending coverage to uninsured individuals, which raises a number of questions in the imaging marketplace. What is the predicted impact on utilization in 2015, when an estimated 31 million formerly uninsured people will join the ranks of the insured? With continued downward pressure on reimbursement for the technical component of outpatient imaging, will there be enough capacity and resources to accommodate the new patients? This edition of Imaging Market File provides an estimated state-by-state impact of health reform on imaging use, which adds up to 13.6% growth nationally (Table 1). Methodology: To calculate the impact of reform on imaging utilization, current utilization rates were normalized by removing the Medicare population (over age 65) to arrive at a utilization rate that would represent the population under 65 years old. Those rates were then corrected for uncompensated care for the uninsured already being delivered in emergency departments and elsewhere (estimated as 25% of their care). To counterbalance utilization management—which has already had a chilling effect on imaging growth (see the February/ March Imaging Market File) and is likely to increase—the impact of the aging of the population was not factored into

the equation, so these projections could be conservative. Thomson Reuters and National Imaging Network have provided proprietary data on 2010 procedure counts, and proprietary utilization forecasts have been made by Regents Health Resources, Inc. Five greatest-growth states: The states with the greatest predicted postreform growth rates are Texas, New Mexico, Georgia, Nevada, and California (Table 2). Tight certificateof-need regulations in Georgia and stringent construction requirements from the Office of Statewide Health Planning and Development in California raise questions about whether those states have the capacity to address the needs of the new patients—and if not, whether capacity can be increased quickly enough to absorb the predicted volumes. Five lowest-growth states: As might be expected, in states (such as Vermont and Massachusetts) that have focused on providing unique or specialized programs to minimize the number of uninsured residents, the overall impact of health-care reform on utilization is predicted to be significantly lower than the national average of 13.6% growth (Table 3). While the number of uninsured people is a factor in moderating projected imaging growth, clinical decision support for medical imaging might also be a factor. Minnesota, which has implemented clinical decision support for outpatient imaging statewide, is among the low-growth states.

Table 2. States With the Highest Projected Imaging Growth

State

procedures

2010

Uninsured population

Postreform volume

Postreform

TX NM GA NV CA

32,392,152 2,599,487 13,842,217 3,930,924 51,760,382

6,234,900 424,400 1,942,600 552,400 7,162,700

39,748,177 3,089,002 16,287,885 4,622,678 60,732,420

22.7% 18.8% 17.7% 17.6% 17.3%

increase

Sponsored Supplement

Table 3. States With the Lowest Projected Imaging Growth

State

procedures

2010

VT WI MN HI MA

903,839 7,991,789 6,752,406 1,634,074 10,139,703

Uninsured population

Postreform volume

Postreform

58,700 511,500 463,100 94,500 327,900

970,408 8,574,961 7,219,577 1,739,015 10,517,759

7.4% 7.3% 6.9% 6.4% 3.7%

increase

Table 1. Estimated State-by-state Impact on Imaging Use1 State 2010 Postreform procedures increase TX 32,392,152 22.7% NM 2,599,487 18.8% GA 13,842,217 17.7% NV 3,930,924 17.6% CA 51,760,382 17.3% FL 35,813,118 16.9% MS 4,140,106 16.8% AR 4,155,773 16.5% AK 723,417 16.2% SC 6,739,092 15.5% AZ 10,377,474 15.4% LA 6,910,334 15% NC 13,697,438 14.8% ID 1,850,244 14.7% OK 5,257,198 14.2% MT 1,357,627 13.9% WY 659,593 13.6% OR 4,783,249 13.6% AL 7,848,066 13.4% KY 6,338,236 12.5% NY 35,341,082 12.4% TN 9,567,503 12.3% NJ 13,591,630 12.2% IL 17,368,063 11.9% WA 9,015,647 11.3% CO 6,545,197 11.3% IN 8,819,053 11.2% WV 2,804,866 11.1% MO 8,442,612 11.1% VA 10,674,958 11% UT 3,057,941 11% MI 17,034,329 10.8% OH 16,874,490 10.7% MD 8,084,594 10.6% DC 602,154 10.4% SD 1,194,644 10.2% KS 4,207,828 10.1% DE 1,440,843 9.3% RI 1,653,766 9.3% NE 2,572,944 9.2% CT 5,600,490 8.7% IA 4,296,126 8.7% ND 1,039,645 8.6% PA 19,531,562 8.3% NH 1,922,661 7.9% ME 1,942,471 7.7% VT 903,839 7.4% WI 7,991,789 7.3% MN 6,752,406 6.9% HI 1,634,074 6.4% MA 10,139,703 3.7% Total 455,825,035 13.6% April/May 2012

Imaging Market File Growth by modality: Texas and Massachusetts, the states expected to experience the largest and smallest postreform bumps in imaging volumes, share one characteristic: MRI volume is predicted to grow more than CT volume (Table 4). This trend was already established in previous years as MRI became more ubiquitous and user friendly (and less expensive). Concern about exposure to ionizing radiation might also be a factor.

Differences between uninsured populations: Populations that are, on average, younger or less economically advantaged are reflected in the regional percentages of uninsured people (Figures 1 and 2). The Kaiser Family Foundation estimates the total uninsured US population at just over 49 million.1

intact. Under the PPACA, individuals meeting specific criteria may fall outside the individualinsurance mandate. This provision could affect the utilization forecast in states with high undocumented-resident populations. Additional data details are available by zip code, modality, and age group.

Notes and caveats: Predicted utilization rates rely on the supposition that the 2014 mandate for individual insurance coverage will remain

Reference 1. Kaiser Family Foundation. Health coverage & uninsured. http://www.statehealthfacts.org/ comparecat.jsp?cat=3&rgn=6&rgn=1. Accessed April 20, 2012.

Table 4. Growth by Modality in Texas and Massachusetts

State Modality

2010 Total

procedures

population

Uninsured population

Postreform volume

Volume growth

Postreform increase

TX CT 3,391,398 24,840,114 6,234,900 4,108,176 716,778 21.1% TX MRI 2,010,818 24,840,114 6,234,900 2,501,081 490,263 24.4% TX Other 26,989,936 24,840,114 6,234,900 33,138,921 6,148,984 22.8% TX Total 32,392,152 24,840,114 6,234,900 39,748,177 7,356,025 22.7% MA CT 1,253,781 6,613,107 327,900 1,297,085 43,305 3.5% MA MRI 530,980 6,613,107 327,900 551,963 20,983 4% MA Other 8,354,942 6,613,107 327,900 8,668,711 313,769 3.8% MA Total 10,139,703 6,613,107 327,900 10,517,759 378,057 3.7%

Uninsured population Total population

50 14%

Millions

12% 17%

13%

18%

18% 23%

16%

10 0

n d al al al tic tic al tai lan ntr ntr ntr an ntr Atlan un ng Ce Ce Ce Atl Ce Mo th th th outh w E ddle rth u u r o o o o Ne i S M st N st S est S st N Ea Ea W We

c cifi Pa

Figure 1. The regions with the greatest predicted postreform increases in imaging utilization (AHRA regions West South Central, South Atlantic, and Pacific) correspond to those with the highest percentage of young and disadvantaged people, including illegal-immigrant populations.1

Figure 2. Uninsured US population (by region).

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social media

Why Radiologists Should Tweet, Blog, and Exploit Social Media

ince the passage of the DRA, and through subsequent hits to reimbursement for imaging, one question has been perennial in the radiology community: How can radiologists raise their profile with patients without sacrificing productivity (or profitability)? John A. Patti, MD, chair of the ACR® board of chancellors, suggests that radiologists should give up 10% of their reading time in favor of practice-building activities, such as consultation with patients. At the 2012 CIO Forum (sponsored by the College of Healthcare Information Management Executives and the Healthcare Information and Management Systems Society) on February 20 in Las Vegas, Nevada, a physician from outside the radiology field had another idea as to how physicians can forge stronger relationships with their patients. Wendy Sue Swanson, MD, a pediatrician at Seattle Children’s Hospital, presented “Physicians and Patients in the Time of Twitter: Trusted Relationships, Social Media, and Opportunities in Health,” suggesting that physicians take to social media to reach patients where they are most likely to be seeking health information. Swanson presents some compelling statistics to support her case. According to the Pew Internet & American Life Project,1 most US Internet users look up health information online; it is the third most common use of the Web. “How we get information is dramatically changing,” she notes. “We know our patients are online. The role of a physician, and how we get patients new information, is dramatically changing as well.” Swanson presented her own experiences using social media as a test case. With the blessing of Seattle Children’s Hospital, she started a successful, patient-oriented blog (www. seattlemamadoc.seattlechildrens.org) about current issues in pediatric health care; in one recurring feature, called If It Were My Child, she recaps current

research on a specific issue and offers her opinion on how parents should interpret it. The Radiology Connection One doesn’t have to use one’s imagination to see how Swanson’s blogging might be applied to radiology— at least, to pediatric radiology—because Swanson’s husband is a pediatric radiologist, and she routinely features his ideas about current topics in pediatric imaging. In an entry dated May 9, 2011, Jonathan Swanson, MD, writes that if his child needed to go to an emergency department, he would take the child to the nearest children’s hospital. He then recaps research supporting his assertion that children’s hospitals tend to be more successful at providing children with lower-dose imaging, and he answers questions from readers in the blog’s comment section. Swanson does not limit her social-media use to the blog,

physicians for time spent connecting with patients via social media, but using these platforms allows physicians to “create repositories of information that we can share with patients later, reducing the amount of time we have to spend in that exam space,” she says. She offers the example of another physician power-user of Twitter and the Web, Howard Luks, MD, chief of sports medicine and arthroscopy at Westchester Medical Center, Valhalla, New York; he tweets as @hjluks and blogs at www. howardluksmd.com. In a tweet dated March 11, Luks describes his presence on Twitter as humanizing his practice; on his website, prospective patients can watch videos explaining how common orthopedic procedures work, and can read his thoughts on emerging treatments. Again, using Luks as a test case, one does not have to go far to see potential applications for

h o w e v e r. She also has an active Twitter account (as @SeattleMamaDoc) with more than 8,000 followers, and she posts videos to a YouTube page. “If 80% or more of mothers are online searching for health information, it is my ethical obligation to be online,” she says. Swanson notes that there is no mechanism in place to reimburse www.imagingbiz.com | April/May 2012 | Radiology Business Journal 21

priors

radiologists hoping to educate their patients. In a blog entry, Luks looks at the overutilization of MRI scans in the diagnosis of athletic conditions. “Please do not approach your physician with the thought that an MRI is necessary in all situations where your knee, your elbow, or your shoulder bothers you,” he writes. “Not all recent injuries require an MRI evaluation (some do).” Information Versus Misinformation Swanson makes the case that this kind of communication with patients is invaluable. The viral nature of misinformation—for instance, fear regarding radiation dose in the wake of media reports about excess radiation at respected organizations—can only be opposed by strong, qualified, and credible

voices. Online, “there’s not a paucity of health information,” she notes. “There’s an overabundance. Until we join those spaces, we won’t have true expertise in the conversation.” The AMA has issued guidelines2 for clinicians who are establishing socialmedia presences; however, these guidelines “are extremely cautionary and not very exciting, and I don’t necessarily believe in them,” Swanson notes. For instance, the AMA recommends separating personal content from professional content. “I believe storytelling is what makes people change decisions,” Swanson says. Instead, Swanson offers four guidelines based on her own experience: never discuss patient-specific issues without the patient’s permission, never be anonymous, be nice, and remember that everyone is watching that conversation unfold. “Your

patients and communities deserve it, and I really don’t think you have a choice. Everyone else is using these means to get their ideas out,” she says. She concludes, “Let’s join our patients where they are. Let’s not be left behind again.” —Cat Vasko Reference 1. Fox S, Jones S. The social life of health information. http://www.pewinternet. org/Reports/2009/8-The-Social-Life-ofHealth-Information/01-Summary-ofFindings.aspx. Published June 11, 2009. Accessed April 16, 2012. 2. AMA policy: professionalism in the use of social media. http://www.ama-assn. org/ama/pub/meeting/professionalismsocial-media.shtml. Published 2011. Accessed April 16, 2012.

numeric

Families Continue to Struggle With Paying for Medical Care

or January through June 2011, onethird of people in the United States were members of families having difficulties paying for medical care, according to a March 2012 report.1 One in five people was in a family having problems paying medical bills, one in four was in a family paying medical bills over time, and one in 10 was in a family

that had medical bills that it was unable to pay at all. The incidence of being in a family experiencing the financial burden of medical care decreased among those over 65 years old and was most pronounced in those 17 years old or younger (see figure).

50%

45.8 Poor Near poor

40% 32.8

27.9

31 27.1 23.1

21.5

10%

41.3

Not poor

34.7

34.1

30%

20%

Reference 1. Cohen RA, Gindi RM, Kirzinger WK. Financial burden of medical care: early release of estimates from the National Health Interview Survey, January– June 2011. National Center for Health Statistics. http://www.cdc.gov/nchs/data/ nhis/earlyrelease/financial_burden_of_ medical_care_032012.pdf. Published March 7, 2012. Accessed April 17, 2012.

6.2

Problems paying medical bills in past 12 months

Medical bills that are being paid over time

Medical bills that they are unable to pay at all

Any financial burden of medical care

Figure. National Health Interview Survey estimates for the first half of 2011; adapted from the National Center for Health Statistics.1 22 Radiology Business Journal | April/May 2012 | www.imagingbiz.com

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CLinical Decision Support | Medical Imaging

Clinical Decision Support: Planting a Decision Tree in Radiology With the Medicare Imaging Demonstration underway, imaging utilization, outcomes, and the future of the prior-authorization process are all on the table By George Wiley

fter a six-month period of collecting baseline data, the CMS Medicare Imaging Demonstration began on April 1, 2012. The imaging industry is watching this test closely. If the two-year demonstration shows that a computerized decision-support system can guide referring physicians to make appropriate orders for advanced imaging tests—and, at the same time, curtail inappropriate utilization—then a move to impose priorauthorization requirements for advanced imaging exams for Medicare patients might be headed off at the pass.

Even if the Medicare Imaging Demonstration fails to squelch a call from the Obama administration and its allies to use radiology benefit management companies (RBMs) to screen advanced imaging orders for Medicare recipients, the demonstration project represents a watershed event. There has been a push (inside and outside CMS) since 2005 to reduce costs for CT, MRI, and other advanced imaging exams. Computerized radiology decision support—a sort of soft blockade in the path of the ordering physician—is seen as a way of accomplishing this.

24 Radiology Business Journal | April/May 2012 | www.imagingbiz.com

In fact, the RBMs themselves are embracing computer-aided radiology decision support and are building it into their prior-authorization methods. They are already experimenting with hybrids of electronic decision support and human intervention that are certain to become familiar to ordering physicians. As Curtis Langlotz, MD, PhD, notes, there is really nothing unusual about decision support finally being invoked for imaging orders. “Decision support has been around for decades,” Langlotz says, “and it has been shown to be effective in modifying physician behavior. This

Preload: Preview v The CMS Medicare Imaging Demonstration went live on April 1, 2012, launching a two-year project to assess the impact of clinical decision support on ordering patterns for medical imaging. The outcome could challenge the preeminence of radiology benefit management (RBM) preauthorization.

v While the preauthorization process used by RBMs is criticized for its lack of transparency and its administrative cost to providers, countless hours have gone into developing a highly transparent, electronic matrix for imaging decision support that the ACR® intends to license.

We were interested in decision support because we see it as a good way to get patients the right test, at the right time, as we move toward accountable care. —Curtis Langlotz, MD, PhD

represents radiology taking advantage of decision-support technology that has been widely used in other disciplines.” In hospital laboratory and pharmacy ordering, decision support is routine, and cardiology now is implementing decision support at a rapid pace. Langlotz says that decision support also guides physicians in dealing with allergic conditions when prescribing drugs or ordering screenings. “I think these are tools that help radiology practices and other healthcare institutions manage imaging in a rational way, and I think they will be used increasingly for the accountable care that we deliver,” Langlotz adds. Langlotz, who is vice chair for informatics in the radiology department of the Hospital at the University of Pennsylvania (Philadelphia), is a participant in the Medicare Imaging Demonstration, as part of a group that includes three other academic hospitals in the Northeast. CMS has selected four other groups to participate in the Medicare Imaging Demonstration. The agency calls the participants conveners because each one convenes referring physicians to join the demonstration. Langlotz emphasizes that the groundwork being laid with radiology decision support through the Medicare

Imaging Demonstration is most likely to find its payoff as health systems transition to accountable-care organization (ACO) models. “We were interested in decision support because we see it as a good way to get patients the right test, at the right time, as we move toward accountable care,” Langlotz says. “We are using the Medicare Imaging Demonstration as a way to get some early experience for ourselves.” Getting early experience with decision support through the Medicare Imaging Demonstration is a recurring theme with Medicare Imaging Demonstration conveners. Even though it is focused only on fee-for-service Medicare outpatients, the Medicare Imaging Demonstration is generating excitement because it is testing radiology decision support across a wide range of provider groups that have no common financial incentive. If decision support works for the Medicare Imaging Demonstration, then it ought to work anywhere. If the Medicare Imaging Demonstration’s results show that decision support guides ordering physicians toward appropriate imaging exams and away from inappropriate exams, then Langlotz and others who believe that decision support can replace RBM prior authorization might feel vindicated.

v Looking ahead, decision support could inform and refine imaging protocols, as data collected over time could confirm (or negate) the effectiveness of a procedure for a given condition in a defined population.

Physician and Patient Friendly A recent study1 looked at combined computerized provider order entry (CPOE) and decision support use in both outpatient and inpatient settings. The study found that CPOE with embedded decision support achieved a high level of use from ordering physicians, with 95% acceptance at the end of 10 years. It also found that the need for preauthorization decreased with the integration of preauthorization and decision-support databases. Medicare Imaging Demonstration participants are now finding the same kind of ordering-physician acceptance. Referrers are embracing the computerized decision-support tools, even though using them takes time and thought. Of course, the jury is still out as to whether the Medicare Imaging Demonstration will determine that there is a lessened need, or no need, for preauthorization itself. Gary J. Wendt, MD, MBA, is enterprise director of medical imaging and vice chair of informatics at the University of Wisconsin–Madison School of Medicine and Public Health. The school is one of the Medicare Imaging Demonstration conveners. On November 3, 2011, in Washington, DC, he presented “Decision Support: Implementation Experiences” at the first ACR® Imaging Informatics Summit. He says that he was surprised, during the Medicare Imaging Demonstration’s data-collection phase, by how willingly ordering physicians accepted decision support. “The point of order feedback was really the opposite of what I thought it was going to be,” Wendt says. “I thought we were going to catch a lot of flack for

www.imagingbiz.com | April/May 2012 | Radiology Business Journal 25

CLinical Decision Support | Medical Imaging

The referrers can enter orders and get immediate feedback. They know that either the test’s approved or there’s an alternative test, and they can present that to the patient immediately. That’s the real benefit of decision support. —Gary J. Wendt, MD, MBA

it, and in reality, we haven’t. People want to know why we aren’t getting more of it, and why we aren’t getting it sooner.” Wendt says that the great advantage of decision support, from the referring physician’s perspective, is that it is displayed at the moment of ordering the imaging exam—when the patient is still likely to be in the physician’s office. According to Wendt, when referrers get a prior-authorization denial (perhaps days or weeks after ordering a test), they have to contact the patient and explain that the original exam has been cancelled. “They have to go back to the patient

and say, ‘I was sort of wrong; I have to do something different,’” Wendt explains. “They prefer the feedback right at the point of ordering because the patient is with them. Not only can they use decision support to justify choices in their own minds, but if they have a patient who is being pretty difficult and pushing for an order, they can bring that order up and show the patient that it is inappropriate.” In 2012, Wendt makes the same point. “The referrers can enter orders and get immediate feedback. They know that either the test’s approved or there’s an alternative test, and they can present

26 Radiology Business Journal | April/May 2012 | www.imagingbiz.com

that to the patient immediately,” Wendt says. “That’s the real benefit of decision support.” Wendt also says that decision support is superior to the use of prior-authorization screening. “Preauthorization is human intervention, and humans don’t act in a rule-based way. With decision support, the same rules are applied across the board,” Wendt says. “I think you, as a patient, would find that more pleasant and palatable than a call, three weeks later, that tells you that you don’t need that head CT, according to the RBM.” Matching Scenarios With Exams Christopher L. Sistrom, MD, MPH, PhD, is CIO and associate chair of the radiology department at the University of Florida College of Medicine. The school is not a participant in the Medicare Imaging Demonstration, but Sistrom has been working for years to complete a matrix that matches clinical scenarios with imaging exams. This allows decision support to be applied using appropriateness guidelines developed by the ACR. One requirement of the Medicare Imaging Demonstration is that decisionsupport tools used by conveners must be based on medical-society guidelines. For radiology, that means ACR guidelines, although one of the 11 exams being studied by the Medicare Imaging Demonstration is a nuclear-medicine test that also uses guidelines from the American College of Cardiology. On November 3, 2011, at the ACR Imaging Informatics Summit, Sistrom presented “Decision Support: ACR Appropriateness Criteria Migration.” He says that matching clinical scenarios with specific imaging tests and establishing an appropriateness ranking for each test are complex, difficult tasks. “If a test is inappropriate, in most cases, we shouldn’t do it, but if it’s equivocal, then it’s hard to tell,” Sistrom explains. “Unfortunately, a lot of the stuff that we do is equivocal.” Choosing the best test for a given clinical scenario often leaves a lot of gray area, Sistrom suggests. He says that the ACR began to work on appropriateness rankings for specific imaging tests for given clinical scenarios or symptoms

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CLinical Decision Support | Medical Imaging

It is rocket science. People know what has to be done, but getting there takes a lot of careful and precise work. It’s getting the teams together that’s difficult, though not impossible. We have the physical technology. —Christopher L. Sistrom, MD, MPH, PhD

in the early 1990s, when the Clinton administration was promoting healthcare reform. A 100-member panel of ACR physicians was formed to vote on each imaging procedure as appropriate for a defined clinical scenario, he says. Imaging procedures were given rankings from 1 to 9, with the bottom three scores being inappropriate, the middle three being equivocal, and the top three being appropriate. Color coding was also attached to the three designations, so that a score of 1, 2, or 3 would show as red for inappropriate; a 3, 4, or 5 score would show as yellow for equivocal; and a 7, 8, or 9 score would show as green for appropriate. Sistrom devised a matrix—with rows for clinical scenarios and columns for imaging tests—to guide decision support for referring physicians. In part, the purpose of this project was to make the ACR’s appropriateness criteria computer ready, but the broader intent was to develop a shared conceptual framework to organize, tabulate, and display imaging utilization, variation, and appropriateness across populations, settings, and regions. “The appropriateness scores are right at the junction of the clinical scenario and the imaging procedure,” he says. “Some people call those rules. Each rule has a score and a review. The table of 700-plus correlations takes an imaging procedure and matches it with a clinical scenario and gives it a score. You can go to the matrix, see CT of the head, and look at tags for clinical scenarios that have scores for CT of the head.” Sistrom says that ACR panelists have continually reviewed and updated the appropriateness scoring. “For the ACR,” he says, “there are 19 broad categories,

and 10 of those are diagnostic and fully relevant for imaging order entry. I think the appropriateness criteria cover about 75% of the most common exams.” The Guts of the System The decision-support systems used in the Medicare Imaging Demonstration can pull scores for each clinical scenario and relevant imaging test and rank the tests as inappropriate, equivocal, or appropriate, Sistrom says. Sistrom recently enlarged on his presentation; he has now spent three or four months refining the appropriateness criteria and clinical scenarios matched in the Medicare Imaging Demonstration. In the early days, Sistrom says, the ACR devoted millions of dollars in free labor to develop appropriateness criteria as an investment in radiology’s future (a grant has covered his own work). Currently, the ACR is in the early stages of executing a comprehensive distribution mechanism for the ACR appropriateness criteria that will deliver content using a variety of electronic methods, Sistrom says. “Prominent among these will be a set of Web services that can be customized and integrated into common electronic medical record (EMR) vendors’ products,” he explains. “The vision is for clinicians to order studies and receive decision-support feedback from within a specific patient’s record—within the EMR client.” Leveraging Web services will enable the ACR to deliver identical, consistent, and up-to-date content simultaneously to all users, in addition to obtaining feedback for the purpose of continuously updating and improving the criteria, Sistrom explains. “It’s in a database, but it’s rudimentary,” he notes. “I changed

28 Radiology Business Journal | April/May 2012 | www.imagingbiz.com

body areas and standardized exam types to make it so you can use an order entry that gives appropriateness scores. For the Medicare Imaging Demonstration, I added a mapper that takes the institution charge master and maps it to our standards, and it can fire back a rule into a specific place. It’s been a lot of work, but we’re getting to the point where we can deliver decision support as a service.” The key, with decision support, is that the same appropriateness rules have to be delivered and applied to all users. The rules have to be updated constantly as well. “The hope is that the ACR will get more panelists, modify the rules, and make it worth doing. There’s a lot of work to be done,” Sistrom says. “It is rocket science,” he adds. “People know what has to be done, but getting there takes a lot of careful and precise work. It’s getting the teams together that’s difficult, though not impossible. We have the physical technology. The EMRs have order interfaces; it’s the hard work of putting the systems in place (and making sure they work) that’s ahead of us.” That’s a key element of the Medicare Imaging Demonstration, too: How well will computerized decision support perform in the clinical setting? Sistrom says that the true test might arrive in five years or so, as health care transitions to a capitated ACO model. He explains, “If the ACOs are capitated, imaging becomes a cost center instead of a revenue center, so then you really want to make sure you’re doing a test that you need—and you will have to be careful with underutilization. How decision support will perform in that scenario is a very good question.” Ordering Patterns An element of the Medicare Imaging Demonstration study that might determine how decision support is used in the future is whether the project demonstrates that decision support changes physicians’ ordering patterns for imaging. Safwan Halabi, MD, is director of imaging informatics and a pediatric radiologist at the Henry Ford Hospital (Detroit, Michigan). The Henry Ford Health System (HFHS) is one of the five Medicare Imaging Demonstration conveners.

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CLinical Decision Support | Medical Imaging

Our goal is to have these data so that we can go to our payors and prove to them that decision-support systems do work. —Safwan Halabi, MD

In “Decision Support: Implementation Experience,” which he presented on November 3, 2011, at the ACR Imaging Informatics Summit, Halabi describes the Medicare Imaging Demonstration as bringing life to the appropriateness criteria at last. He notes that the six-month baseline data-collection period was meant to establish physician ordering patterns against which the 18 months of actual decision-support use could be measured. “At least, we will be getting feedback now—we can now say to ordering physicians, ‘These are the ordering habits

of your peers, and these are yours,’” Halabi notes. Halabi says that HFHS applied to be a Medicare Imaging Demonstration convener after insurers petitioned HFHS to use a commercial decision-support product that had come on the market. “Then CMS said, ‘We’ll pay you to do what you were going to do anyway,’” Halabi says. There was a caveat: HFHS was required to use decision support that was based strictly on medical-society appropriateness criteria. “In midstream, we had to switch to a different decisionsupport system,” he explains.

Elaborating on his presentation, Halabi reports that HFHS is now using the same decision support designed for the Medicare Imaging Demonstration throughout the system. Of an estimated 600,000 advanced imaging studies completed per year by HFHS radiologists, about 10% are for Medicare recipients, he says. The decision-support results for those patients will go to CMS for analysis as part of Medicare Imaging Demonstration. For the other studies, ordering physicians will be required to go through the same decision-support process, but the non-Medicare results won’t be sent to CMS. This will be information that HFHS (and, perhaps, its payors) can use independently, although for now, payors won’t be given the appropriateness scores, Halabi says. There is a key difference for the nonMedicare advanced imaging orders, Halabi adds. CMS does not want order denials (hard stops) to occur in the Medicare Imaging Demonstration. The agency only wants to track changes in ordering patterns as a result of the guidance of decision support. Physicians ordering for Medicare patients are able to order red-tagged exams, even though they are labeled inappropriate. They can do so, without explanation, just by selecting the exam (despite its red status). For non-Medicare patients at HFHS, when physicians order a red- or yellow-tagged exam they must enter an explanation before the order proceeds, Halabi says. Exams ordered for privately insured patients also must go through any prior authorization already in place, he adds. HFHS hopes, however, that the use of decision support will lessen the need for prior authorization. “The whole premise of the Medicare Imaging Demonstration was to end the need for preauthorization,” he says. “Our goal is to have these data so that we can go to our payors and prove to them that decision-support systems do work.” Whether They Will Work Michael J. Pentecost, MD, is associate CMO for National Imaging Associates (NIA), a major RBM. “We see health

30 Radiology Business Journal | April/May 2012 | www.imagingbiz.com

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CLinical Decision Support | Medical Imaging

We want to be students of the issue and watch it all unfold with our own eyes. Whether it will work and health plans will be able to rely on it is unclear. —Michael J. Pentecost, MD

plans as being very interested in this and expecting it to be a product of the future,” Pentecost says, “but it’s also on the radar that decision-support systems don’t have proven reliability, durability, and reproducibility. They need to be shown to be effective—and that has not been shown, so far.” NIA is committing resources to investigating decision support, however. It applied to CMS and was chosen as a Medicare Imaging Demonstration convener. It is testing decision support with its own groups of referring physicians as they order advanced imaging exams for Medicare patients. It might seem counterintuitive that an RBM would participate in the development of a product that would diminish the demand for its major service of prior authorization, but NIA has adopted the stance of joining them to keep from being beaten by them, Pentecost explains. “Our view was these decisions would become more and more electronic, increasing in frequency and use,” Pentecost says. “We think a decisionsupport system is a logical conclusion. All the RBMs are migrating toward decisionsupport systems. We’re just going to migrate a little faster.” Pentecost also notes that NIA was interested in the Medicare Imaging Demonstration because it had a cardiac imaging component with its nuclearmedicine test. NIA has made cardiology testing prior authorization a big part of its business. Pentecost says, “The nuclearmedicine component was a big part of our proposal to CMS because we do so

much cardiac work.” NIA is assessing the degree to which electronic decision support might reduce the utilization of advanced imaging tests—unless the tests are called for clearly. “I think there is widespread agreement that there is overutilization of imaging,” Pentecost says. “The market will demand more discriminating, accurate, and effective tools to weed that out of the system. The deduction is that this demand will lead to a reduction in overutilization, but that has been quite uneven, depending upon people’s practices.” He makes no predictions about how the Medicare Imaging Demonstration will affect RBMs (or NIA itself). “Decision-support systems are going to be an increasing part of utilization management, and we want to delve into this and inform ourselves, rather than have others tell us,” he says. “We want to be students of the issue and watch it all unfold with our own eyes. Whether it will work and health plans will be able to rely on it is unclear.” Pentecost also says that NIA’s participation in the Medicare Imaging Demonstration does not mean that NIA is backing away from a lobbying effort (conducted with other RBMs) to get CMS to use prior authorization for advanced imaging exams for Medicare patients. “Our position is that in Medicare, they will benefit with an RBM,” Pentecost says. He also notes that decision-support systems and their use are moving targets that can reshape themselves even as the Medicare Imaging Demonstration proceeds over the next 18 months and

32 Radiology Business Journal | April/May 2012 | www.imagingbiz.com

then enters an analytical phase. “This is a system that is being created,” he says. “Scientific progress factors into this.” Those who strongly believe in computerized decision support see improved patient care—through the scientific use of decision support—as one of the major benefits of implementing such systems. Whether decision-support systems will be so widely adopted that the eventual results of the Medicare Imaging Demonstration are irrelevant is a question that no one can answer. Getting the Gamers Halabi says that decision-support use not only will result in fewer inappropriate exams, but will build on itself, over time, so that feedback will result in the prioritizing of exams for given clinical scenarios. Decision support will aid in the collection of positive/negative clinical data to determine which imaging exams are most effective, he adds. A green score without confirmed positive results later in the patient’s care might mean that the use of the exam should be changed. Halabi says that outcomes data can also be used to see which referring physicians might be gaming the system because they have financial or personal motives for ordering certain tests. “If they really want that exam, they’re going to say the right things,” he says. “By documenting that in decision support (through outcomes), we will see those people who know what to say getting green scores. That’s the real premise behind this demonstration project.” Halabi hopes that patients will warm to decision support when they come to understand that getting the proper imaging test is in their interest, particularly if it means decreased radiation exposure—and if they save on expensive imaging that is not needed. On the other hand, they could resent decision support if it prevents them from getting tests that they want, he acknowledges. “It could go either way, and the jury’s still out; I hope people trust the science,” Halabi says. Work to Be Done There is still hard work (and lots of analysis) to be done to perfect decisionsupport tools for radiology. For one

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CLinical Decision Support | Medical Imaging

thing, we don’t know how decision support will fare if it fails and there are legal consequences. Nothing has happened yet to force the courts to deal with that because decision support is too new. Nobody’s sure how decision support will be viewed legally. Sistrom suggests decision support, at some point, might become the standard of care, but that’s yet to be argued in court, he says. “If you get a red score for back pain, and you don’t do the test—and then, it turns out that there is disease—what do you do?” he asks. “My hope is that you could say that the physician and the patient made the gamble; it was a long shot, but they lost. My hope is, in a comprehensive system, the patient and the physician would be held harmless. It will be an interesting question. It’s going to come up: Somebody will have a red result, and the physician will not do the test; the patient will come back with problems, and the physician’s defense counsel will say that this is the standard of care.” Wendt sees another (perhaps equally urgent) matter to be addressed: He

knows of nothing that has been built into decision-support systems to track cancelled orders, but such tracking is critical to developing outcomes data. “Any computer system, in general, focuses on tracking what occurs, not what doesn’t occur,” he says. “With decision support, what doesn’t occur is as important as what does occur. Recommending not doing something is just as significant as doing something.” Some have argued that decision support should also have the ability to track radiation exposure, over time, for each patient, but Wendt says that this would first require the development of a national dose registry (because too many patients have untallied exams outside the health-care entity that is deploying decision support). “When you’re talking about dose monitoring and modifying care, it’s irrelevant if you don’t do it globally,” Wendt says. Still, this could happen. Decisionsupport systems might not be global, but that doesn’t mean that they aren’t headed that way. The calculation that decision

34 Radiology Business Journal | April/May 2012 | www.imagingbiz.com

support can be done on a widespread and uniform basis is one of its attractions, particularly when there is so much focus on the cost of health care. “I am an advocate of decision support and of using the data to evolve the system and make it better,” Halabi says. “There is going to be a point, as a nation, where health care drives us into a hole, unless we have appropriate expectations about the utility of exams. Decision support will play a huge role. Think of imaging as a medication. It has side effects. How can we curb unnecessary imaging and its costs?” George Wiley is a contributing writer for Radiology Business Journal. Reference 1. Ip IK, Schneider LI, Hanson R, et al. Adoption and meaningful use of computerized order entry with an integrated clinical decision support system for radiology: ten-year analysis in an urban teaching hospital. J Am Coll Radiol. 2012;9(2):129-136.

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Tacoma | A Consistent Imaging Service

The United State of Imaging in Tacoma: Creating a Consistent

Service Across Multiple Imaging Stakeholders

Disparate health systems and radiology groups are collaborating to meet patients’ needs through consistent radiology service with measurable quality improvement By David Rosenfeld

ocated on the Puget Sound about 35 miles south of Seattle, Washington, the community of Tacoma and surrounding Pierce County benefit from a number of innovations that are linking local radiology providers in an uncommon collaboration. Through IT and service agreements across two competing hospital systems and two separate radiology groups, all parties report improvements in multiple areas of patient care. It’s most notable that imaging-report turnaround times have dramatically improved in the emergency departments involved, where even small delays can mean the difference between life and death. Other quality indicators are being tracked and measured using specific metrics. At MultiCare Health System (Tacoma), which operates four hospitals and several clinics in the region, radiologists’ average interpretation-turnaround times for imaging exams from the emergency department went from more than an hour, three years ago, to about 20 minutes today. Franciscan Health System (Tacoma), which runs one of Tacoma’s two level II trauma hospitals, also has experienced reduced emergency-department turnaround times in recent years. For standard imaging exams that previously took an average of more than a day to complete, referring physicians often receive results in less than an hour at both hospital systems. These improvements were made possible through high-level software integration within the two health

Preload: Preview v Two competing hospital systems and two competing radiology practices achieved something that eludes many single institutions: a consistent radiology service. v In addition to defining specific protocols for how an imaging exam is performed, a managed-services agreement between one system and the two practices also dramatically reduced emergency turnaround times.

36 Radiology Business Journal | April/May 2012 | www.imagingbiz.com

v The effort that this took should not be underestimated: The three parties negotiated for more than a year before they agreed on what constituted the beginning and end of emergency-department turnaround time for imaging studies.

Business Intelligence Series: Texas Radiology Associates SecoND PRofIle IN A SeRIeS of SIx

Smart Growth in a Tough Market: Leveraging Business Intelligence at Texas Radiology Associates Radiology’s business environment has changed considerably since the heyday of the late ‘90s and early 2000s, when, says Paul Staveteig, MD, the equation for success was comparatively simple. “You would have your contracts, you would staff your hospitals, you would submit claims, and the claims got paid,” he recalls. “Now the environment is different. There are multiple competing entities, and the only way to survive in this marketplace is to be able to look at things very critically and make decisions very quickly.” Staveteig is a physician partner with Plano-based Texas Radiology Associates (texasradiology.com), also

Zotec Partners. The total solution.

known as TRA. The 70-radiologist practice has contracts with nearly 20 hospital clients in the north Dallas area, including three large hospital chains and some physicianowned hospitals; the practice also reads for a handful of private, specialty physician groups. “I think we’re a fairly unique practice,” Staveteig notes. “We’re principally hospital-based, and we’ve grown by forging strong alliances with a lot of the hospital systems here.” Three years ago, TRA began outsourcing its billing to Zotec Partners, a nationwide provider of billing and business intelligence services for radiology. Prior to contracting with Zotec, TRA worked with another nationally-recognized third-party billing service, but the system was paper-based and unwieldy, Staveteig says: “They’d take giant stacks of paper reports and go through them with about twenty people sitting in an office. Accountability for claims, reprocessing claims— both were really a challenge. So we went with Zotec for electronic billing.” The short-term result was a significant improvement in billing efficiency, Staveteig says. “With electronic billing and the integrated services Zotec offers, we’re

PRofIle able to get real-time information on our claims, claims submitted and claims denials, and we can track if there are patterns of claims being rejected,” he notes. “If we need to be doing something different to better meet the insurance company’s billing requirements, we’re able to make that change quickly.”

The Next Step But Zotec’s electronic billing system had more to offer the practice than more efficient claims processes. With the company’s business intelligence services, which provide data on everything from the practice’s

“The only way to survive in this marketplace is to be able to look at things very critically and make decisions very quickly.” –Paul Staveteig, MD, physician partner, Texas Radiology Associates payor mix at its different client facilities to the range of modalities from which the practice’s radiologists are reading studies, TRA is better able to evaluate potential new contracts—a critical consideration for a practice trying to grow in a competitive market.

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“Looking at the payor mix and mix of modalities, we can come up with a reliable predictor of gross revenue for a particular project, and that helps us evaluate how best to grow our practice.” “With all of these hospitals, we can very quickly get a good idea of where there are new opportunities,” says Staveteig. “looking at the payor mix and mix of modalities, we can come up with a reliable predictor of gross revenue for a particular project, and that helps us evaluate how best to grow our practice. We have found the predictions based on Zotec’s data to be within 5%.” for example, TRA recently entered into a new contract with Baylor Medical center in McKinney, Texas, a hospital opening in July of this year. “We looked at what the payor mix would likely be and decided that would be a good business opportunity,” Staveteig says. The evaluation process also helps the practice anticipate a new client’s needs in terms of staffing, ensuring that TRA will provide optimal service from the start: “We recently started with a hospital in Sherman, Texas, and we were able to make staffing decisions to make that relationship work for the patients, administration and physicians there.”

Daily Charge Count Sample Zotec graphic displaying daily charge count analysis

Empowered Decision-making The ability to make these decisions pro-actively is critical to TRA’s success in its market. “We’re in an environment that’s had a fair amount of vertical integration within the medical community,” Staveteig notes. “We are able to partner with the administrators in the hospital chains as well as our local physicians to give people what they want: timely service, accurate service, and continuous, 24/7 service. We’ve been able to grow despite some of those changes that have happened in the marketplace here.” Today, Staveteig says, empowered decision-making is a hallmark of TRA’s business practices. Data gleaned from electronic billing is used to evaluate potential new relationships, to determine whether existing relationships are working optimally, and to maintain profitability in spite of the regulatory and legislative

“We’re in an environment that’s had a fair amount of vertical integration within the medical community. We are able to partner with the administrators in the hospital chains as well as our local physicians to give people what they want.”

rollercoaster radiology has experienced since the passage of the Deficit Reduction Act. “We have not seen the decrease in revenue that other practices have seen in the past five years,” Staveteig notes. As its billing partner, Zotec has been responsive in developing tools to address TRA’s specific needs, Staveteig says. “As the relationship grew, we’d discover things in the data like that a certain insurance company hadn’t paid us for several months, and Zotec worked with us to build the drill-down tools to catch that,” he says. “It’s been great partnering with them, and a lot of the tools they’ve developed were in response to issues that cropped up as we were working together. each year we have something new.” As vertical integration and other forms of consolidation continue to be prevalent market forces, Staveteig anticipates leveraging business intelligence to stay competitive. “When hospital chains want to pursue outpatient imaging, they’ll set up a separate division, and can pursue more favorable contracts from payors to make it work,” he notes. “With business intelligence, when we negotiate our own insurance contracts, we can use the data we have to help us with that as well.”

PRofIle Charge Analysis Sample Zotec graphic displaying charges by dollars and volume

“Zotec took the initiative to develop and implement a robust audit process to ensure 100% of our charges are being captured. Through this process, Zotec was able to increase our charge volume by 15%, which resulted in significant additional revenue.” –Susan Spain, business manager, Texas Radiology Associates

Confidence and Consensus Most importantly, Staveteig says, business intelligence enables TRA’s physician partners to achieve consensus on difficult decisions more efficiently and with greater confidence. “We’ve shied away from several opportunities, because after evaluating them, we saw they would not turn out to be what we might have hoped,” he notes. “With business intelligence, as a

group we feel more confident about the decisions made, and we come to a consensus much more quickly.” empowered by clear, real-time information and analytics, the practice’s conversations around tough decisions stay on track. “our discussions are based on data, and that keeps us on task,” Staveteig says. “everyone has something to add, and we take the best from everyone and then move forward.”

“With business intelligence, as a group we feel more confident about the decisions made, and we come to a consensus much more quickly.” He concludes, “These tools from Zotec are quite powerful. In our group meetings, we can make good decisions that people feel very comfortable with.”

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systems and through communitywide collaboration among the hospitals and the two competing radiology groups. The programs still exist within separate, distinct systems, but such collaboration aligns the disparate groups on the same platforms, allowing access to images—wherever they might be housed. Unified PACS In 2007, the two competing hospitals made a strategic decision to use the same PACS vendor. MultiCare Health System followed Franciscan Health System in buying and implementing a new system, along with mutually chosen voicerecognition software, in all but one of its four hospitals. The fourth hospital will be added to the system soon. Two radiology groups that serve the hospitals are 52-member TRA Medical Imaging (Tacoma), which contracts with both hospital systems and operates its own freestanding centers, and Medical Imaging Northwest (Tacoma), a 25-member group that contracts with hospital systems and medical offices, in addition to operating joint-venture outpatient imaging centers. Medical Imaging Northwest and TRA Medical Imaging both have their own PACS, provided by the same vendor that serves the hospitals. Medical Imaging Northwest also uses a middleware product that streamlines workflow by consolidating RIS data, PACS images, and dictation from disparate sites into one worklist. Use of the same PACS vendor makes a more seamless workflow possible among the various healthcare providers in the community, according to Brian Knudsen, area supervisor in the IT department overseeing the PACS at Franciscan Health System. It also facilitates access to prior studies. “It was a pretty easy decision because our primary focus is on patient care,” Knudsen says. “Whether patients have been seen at a different organization or at ours,

Now, the physician can know all the details for that patient in the context of the entire health-care record. —Jim Sapienza, FACHE MultiCare Health System

This has been all about trying to get two groups in alignment in a contractual way and about giving them incentives. —Dennis Carter TRA Medical Imaging

they are our neighbors. They are a part of our community, and we want them to be treated as quickly as possible.” Andre House, manager of diagnostic imaging services at Franciscan Health System, says, “It definitely streamlined patient care and made access to comparative studies on patients more optimal.” Sharing a PACS vendor also opened the door to greater collaboration between the hospitals. MultiCare Health System and Franciscan Health System alternate level II trauma response every 24 hours, and this switching has enjoyed greater coordination since they began using the same PACS vendor. The two health systems (along with TRA Medical Imaging) also share a Tacoma joint venture called the Carol Milgard Breast Center. Each party owns a third of the facility. The two radiology groups and both health systems also coordinate their software upgrades at the same time, saving resources for the hospitals and vendors because the PACS trainers might need to make a trip to Tacoma for only one round of upgrade training (instead of four). The organizations’ PACS administrators meet on a fairly regular basis and communicate almost daily about how they’ve solved problems or configured the system to be more effective. Knudsen says, “That collaboration is possible because we work from the same system.” Having a common PACS vendor also

provides the four organizations with a certain amount of leverage (in negotiating prices and making special requests for software tweaks) that they might not enjoy as single customers, Knudsen says. Shared-management Agreement MultiCare Health System went a step further in October 2010, when it began the process of integrating its RIS and PACS with its electronic medical record. Jim Sapienza, FACHE, imaging division administrator at MultiCare Health System, says that the move gave radiologists greater access to patient information because the entire record was complete and accessible in one place. “Now, the physician can know all the details for that patient in the context of the entire health-care record,” Sapienza says. More important, an integrated system allowed IT specialists to zero in on key quality measures that might need improvement. With the RIS tightly integrated, administrators knew exactly when a technologist started an exam and when a radiologist accessed that exam in the PACS. Together, this new information represented a complete picture of the hospital’s imaging-service workflow. One of the deficiencies that administrators quickly noticed was emergency-department turnaround time, but there also were differences in the ways that certain procedures were performed by the two radiology groups. For

www.imagingbiz.com | April/May 2012 | Radiology Business Journal 41

Tacoma | A Consistent Imaging Service

Once you start to measure something, it tends to get better. It’s definitely helped to raise the bar in our community, in a variety of ways. —Mike Dowd, MD

It really has given everybody a keener focus on what the priorities should be. Together, everyone sits down, talks through the issues, and looks for opportunities. We look at the metrics regularly to see how we’re doing. —Keith Arnzen, MBA Medical Imaging Northwest

instance, when the technologist deemed the exam to have begun, what type of contrast material was used, and the ways in which the exam was documented were often inconsistent. “Even where we were believed to have reliable data, you’re only as good as your input,” Sapienza says. In response, MultiCare Health System administrators and the two radiology groups negotiated a shared-management agreement that would define specific protocols for the way that an imaging exam should be performed. Dennis Carter, TRA Medical Imaging’s CEO, reports that over the past three years, the groups have worked to implement the guidelines (which cover everything from physician credentialing to stroke protocols) for both technologists and radiologists. The hospital system attached a small incentive—roughly $100,000 annually for each radiology group—to be paid if the groups met certain benchmarks. Both groups have met the benchmarks for the past two years. “What they specifically are trying to do is get two separate groups to agree on how to deliver service in one unified way,” Carter says. “This has been all about trying to get two groups in alignment in a contractual way and about giving them incentives.” Once the organizations reached

agreement on what to measure, the question of an appropriate goal arose; it wasn’t easy to reach agreement among entities with separate groups of lawyers. It took more than a year, for instance, for the parties to reach agreement on what constituted the beginning and end of emergency-department turnaround time. After protracted discussion and formal negotiations, the parties reached agreement in 2009. “It’s about how we deliver good, consistent clinical care across all of the hospitals, even where there is a different radiology group,” Carter says. “Radiologists don’t necessarily practice the same way.” He adds that great progress has been made in agreeing upon appropriate measures, recording compliance with them, and reporting on them. Giving Quality a Number There are six indicators that the groups agreed to measure. First, neuroradiologists read all MRI and CT exams of the head and neck. This measure arose to ensure that subspecialty radiologists were reading at the highest level of their training. Second, critical results from CT and PET exams are reported by telephone to the ordering physician and documented in the final report. Third, there are zero infections from catheter cultures within seven days

42 Radiology Business Journal | April/May 2012 | www.imagingbiz.com

of imaging placement of a peripherally inserted central catheter. Fourth, cases randomly selected for peer review are completed within 30 days. Fifth, emergency-department turnaround times are recorded. Sixth, exposure time for fluoroscopy is documented in the final report. After two years of tracking and reporting the results, both radiology groups are meeting the benchmarks, with only slight deficiencies in one or two categories. For instance, the target goal of 90% completion within 24 hours was set for neuroradiologists or interventional radiologists reading MR angiograms and CT angiograms of the head and neck. In 2010, one group met this target just 36% of the time. Now, both are near the target. Both groups succeeded in surpassing the 90% benchmark for documenting critical results in the final report. For the past two years, neither group has had an infection linked to an imaging exam, and both groups met the 95% benchmark for peer review of cases within a month. Mike Dowd, MD, president of TRA Medical Imaging, says that improvements in emergency-department turnaround times occurred as soon as the groups started measuring elapsed times consistently. “Once we started measuring and showing turnaround times, people started focusing to make sure those exams were read in a timely fashion,” Dowd says. “Once you start to measure something, it tends to get better. It’s definitely helped to raise the bar in our community, in a variety of ways.”

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Tacoma | A Consistent Imaging Service

2,100 2,040 1,980 1,920 1,860 1,800 1,740 1,680 1,620 1,560 1,500 1,440 1,380 1,320 1,260 1,200 1,140 1,080 1,020 960 900 840 780 720 660 600 540 480 420 360 300 240 180 120 60 0

While emergency-department turnaround had been decreasing over the past several years, in 2011 alone, times for both groups dropped from around 30 minutes to 20 minutes. It was this dramatic improvement that caught the eye of hospital administrators. Dowd says that practices at MultiCare Health System have carried over to improvements at Franciscan Health System as well. “We like to provide the same level of service,” he says. “If we raise the bar at one hospital system, we want to do the same thing down the street.” Keith Arnzen, MBA, CEO of Medical Imaging Northwest, says that there’s no doubt that this program has helped improve the quality of care. “It really has given everybody a keener focus on what the priorities should be,” Arnzen says. “Together, everyone sits down, talks through issues, and looks for opportunities. We look at the metrics regularly to see how we’re doing.”

January 2010

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Figure. MultiCare Health System and its two radiology practices set a target goal of a 30-minute turnaround time for emergency-department interpretations in its four Tacoma-area hospitals and carefully tracked a number of measures on a monthly basis over time, making the results available to the radiology groups. In just six months, average turnaround time at the Tacoma General Hospital campus was reduced from 62 minutes to 22 minutes. 44 Radiology Business Journal | April/May 2012 | www.imagingbiz.com

We’ve removed thousands of hours of manual reporting and turned them into tens of hours of meaningful reporting that people can use to make a difference. —Scott Bennett MultiCare Health System

You’re going to see these kind of software products available because they’re going to be a requirement. Most radiologists work with different systems. You’re going to need these integrators to provide better patient care. —Andrew Levine, MD

Safety Enhancements The IT managers at MultiCare Health System have leveraged their improved access to data (provided by integration) to push quality efforts and to help meet established measures. Specifically, the system was programmed to alert a technologist that he or she is about to perform a repeat exam. An alert can also be made to appear when a radiologist is about to read the wrong image—or an exam that is outside his or her expertise. Scott Bennett, a medical imaging analyst at MultiCare Health System, says, “It will trigger an alert, and we can call and say, ‘It looks like you’re about to read this study.’ The radiologist will says, ‘How did you know I was about to read this?’ More important, we don’t have to deal with mistakes afterwards.” Bennett says that the hospital can identify cases where pulmonary embolisms occurred, but weren’t acted on in a timely manner. “Through computer-assisted analysis of those reports, we can affect care on patients in real time, rather than waiting until they are statistics,” Bennett says. “We’ve really taken advantage of the data to maximize our clinical care.” If turnaround times exceed the appropriate threshold, radiologists are alerted. “We’ve literally made life-or-

death differences in patient care through the technology,” Bennett says, “but what’s key is not the technology itself: It’s the collaboration with the physicians. We’ve collaborated to provide them the data they can act on to improve the care of our patients. We’ve removed thousands of hours of manual reporting and turned them into tens of hours of meaningful reporting that people can use to make a difference.” This year, the groups are tracking the self-editing of reports. The goal is to eliminate transcription service, relying entirely on voice-recognition software and self-editing by radiologists to confirm the report. If the groups comply, it would save the hospital system money and improve the overall turnaround time for reports. Aggregating Prior Studies Medical Imaging Northwest also has pioneered the use of an application that gives its radiologists ready access to a far greater number of prior studies than they had access to formerly. Rather than relying on images being pushed or pulled, Medical Imaging Northwest’s radiologists have any prior studies performed within the MultiCare Health System at their fingertips. The system, which includes middleware and a server, acts as a conduit to access the health system via secure

private network and stores images for up to 60 days. It also enables the practice to consolidate reading lists from multiple sites into one list. The advantage has meant the difference between pulling 40 to 60 prior exams (manually) per month and having 400 to 700 prior exams automatically routed by the PACS to the interpreting radiologists. “That was almost a tenfold improvement in information about a patient that we didn’t have before,” Bennett says. Arnzen says that the new method is extremely helpful. “It has been wonderful in allowing radiologists to see prior studies in an automated way. Before, we relied on imaging assistants to have the time to queue up those prior studies—and to try to decide which ones they should look for,” he says. What’s next for the health-care leaders in Tacoma? For the future, Sapienza says, MultiCare Health System is looking for a good cloud-based solution for sharing images. “We are challenging the major PACS vendors to give us a really good, workable cloud-based solution,” he says. “Once they do, the hospital system will no doubt be looking for another round of collaboration among competing interests.” TRA Medical Imaging is planning to push its technology envelope further with investments that will result in a more seamless interoperability among its own information systems as well as among those with which it interacts. “It appears to me that legacy PACS vendors are holding on too tightly to the old models and are asking way too much,” Carter says. Andrew Levine, MD, chair of Medical Imaging Northwest’s executive committee, believes that the advances in Tacoma represent where a lot of other regions will be going in the future. “You’re going to see these kinds of software products available because there’s going to be a requirement,” Levine says. “Most radiologists work with different systems. You’re going to need these integrators to provide better patient care.” David Rosenfeld is a contributing writer for Radiology Business Journal.

www.imagingbiz.com | April/May 2012 | Radiology Business Journal 45

Alignment | Hospitals and Radiologists

Radiologist–Hospital Alignment:

Destabilization, Discord, and Accord As health-care providers seek greater alignment to prepare for more accountability, radiologists are challenged to see eye-to-eye with hospitals on terms By Julie Ritzer Ross

n March 2010, Sutter Health announced plans to sever a contract, in place for nearly a century, with Radiological Associates of Sacramento in California. Under its terms, the group had served five Sutter Health hospitals in the region. The previous year, Mercy Health Partners suddenly let lapse an equally established handshake agreement that it had maintained with Consulting Radiologists Corp to cover four hospitals in the Toledo, Ohio, area; a corporate provider of imaging services was brought in as a replacement. In 2008, Florida Hospital in Orlando announced that it would not renew its contract with a radiology group that had served it for 40 years. The group’s radiologists were instead offered employment at the hospital; two-thirds of these physicians subsequently joined the institution’s ranks, and the group disbanded. These incidents represent just a few examples of meltdowns in long-standing relationships between radiologists and hospitals. The emergence of national teleradiology companies and the movement toward an accountable-care organization (ACO) model have brought to bear new options for hospitals, in outsourcing radiology coverage and in employing radiologists alike. Many radiology groups are grappling with how to remain independent while simultaneously meeting the needs of their clients. Richard Townley is president and CEO of AGI Healthcare Group, a consulting organization that assists health systems, hospitals, ancillary-service providers, and radiology groups in executing initiatives for cost reduction, productivity

Preload: Preview v Several high-profile meltdowns of longstanding contracts between radiology groups and hospitals—one nearly a century old—sent shock waves through the radiology community and put focus on the issue of radiologist–hospital relations. v National teleradiology groups and a renewed trend toward physician employment have given hospitals new service options. What they want: the availability of radiologists for consultation on nights and weekends, willingness to help with hospital quality initiatives, and no competition in the outpatient imaging market.

46 Radiology Business Journal | April/May 2012 | www.imagingbiz.com

v What radiologists want: exclusive reading privileges, compensation for valueadded services (such as 24/7 coverage), and respect for their contribution. v In the end, it all boils down to a failure to communicate: Consultants cite the inability to establish open lines of communication as the biggest problem in radiologist– hospital relationships.

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Alignment | Hospitals and Radiologists

The industry, as a whole, is struggling mightily with physician–hospital alignment as never before. Radiologists have one set of priorities, and hospitals—the big hammers looking for nails—have another. It is not an entirely pretty picture. —Richard Townley AGI Healthcare Group

Replacing radiologists for hospital imaging services has, until fairly recently, been a challenge. Today, however, hospitals have so many sources for imaging services that if one group is not up to par—for any reason—removing it and bringing in another is not a big deal. —Cynthia Sherry, MD, FACR

improvement, and revenue enhancement. He says, “The industry, as a whole, is struggling mightily with physician– hospital alignment as never before. Radiologists have one set of priorities, and hospitals—the big hammers looking for nails—have another. It is not an entirely pretty picture. ” Issues Spark Destabilization Several general issues appear to be sparking a destabilization of radiologist– hospital relationships. Cynthia Sherry, MD, FACR, chair of the department of radiology at Texas Health Presbyterian Hospital Dallas, believes that a lack of understanding about expectations and priorities heads this roster. She says that some radiologists do not fully comprehend the increasing importance of going the extra mile to satisfy the service expectations set by hospitals, administrators, and referring physicians. Rather, these radiologists continue to operate under the mindset that they are the only game in town—and, therefore, secure in their relationships with the hospitals that they serve. Similarly, younger practitioners, in particular, place great emphasis on the work–family

balance and assign it a higher priority than fulfilling hospitals’ requirements— sparking tension that only widens the chasm. Sherry headed the 10-member ACR® task force on relationships between radiologists and hospitals (and other health-care organizations), which published its recommendations1 for strengthening radiologist–hospital alliances in 2010. She says, “Replacing radiologists for hospital imaging services has, until fairly recently, been a challenge. Today, however, hospitals have so many sources for imaging services from which to choose that if one group is not up to par—for any reason—removing it and bringing in another is not a big deal.” Sherry adds that inadequate radiologydepartment leadership is a factor as well, with radiology departments, in many cases, being unable able to cultivate leaders who can effectively communicate with hospital administrators. Some are willing to make few, if any, concessions to hospitals and would rather dig in their heels than adopt a cooperative stance. Others have members who refuse to follow their leaders in allying themselves with the hospital on a given issue.

48 Radiology Business Journal | April/May 2012 | www.imagingbiz.com

The Flip Side There is a perception among radiologists that certain hospitals fail to respect the quality of the interpretation services they provide, viewing them, instead, as a commodity. Hospitals’ inability or refusal to subsidize radiologists’ salaries comes into play here as well. Timothy Stampp, MBA, serves as chief of corporate development at Medical Imaging Specialists (MIS), a consulting company for which radiology groups are half (or more) of the client base. “A considerable push behind the breakdown comes when hospitals want radiologists to work in their facilities and subsist on what they have collected from payors and patients—despite the added value of their services. Radiologists say that they cannot afford to do this, and hospitals respond that they cannot afford to pay,” he notes. Adding insult to injury, players on both sides face ongoing financial challenges— and address them in different ways, which might not prove advantageous to every party concerned. For example, Sherry says, a radiology group might (in its quest to procure new revenue sources) build its own imaging center—with a subsequent negative impact on the hospital’s bottom line. Battles over technology, too, can ensue when radiologists and other specialists are competing to use the same hospital-owned equipment. High Stakes Unsatisfied demands and desires notwithstanding, entities on both sides of the radiologist–hospital divide clearly have much to lose in situations where closer alignment is not achieved. As Stampp puts it, radiologists will be unable to battle heightened competition successfully—not only from teleradiology concerns, but also from other specialists who perform their own imaging and interventional procedures—unless they accede to at least a portion of hospitals’ demands. They risk having to operate in an environment where radiologists’ services are entirely commoditized and where contracts are almost always awarded to the lowest bidder. Hospitals would lose the value of radiologists who add elements of

education and value to the imaging service line by looking for more effective ways to use resources and by promoting more appropriate use of imaging. When there is no give on hospitals’ part, the incentive for radiologists to do more than interpret studies can easily disappear—to the detriment of hospitals. Stampp points out that these risks remain the same, whether radiology groups adopt a contract model (which offers the advantage of physician autonomy, yet comes with no income guarantee) or go the hospital-employment route (which brings with it the security and stability of working with a larger organization and freedom from handling the administrative obligations of medical practice). Either way, he says, arriving at an optimal financial arrangement should go a long way toward pushing alignment in the right direction. A Long-standing Employed Model Thomas Nantais, FACHE, CEO of Henry Ford Medical Group (HFMG), Detroit, Michigan, knows this all too well. Part of the not-for-profit Henry Ford Health System, founded in 1915, HFMG is the third-largest group practice in the United States, with approximately 1,400 employed physicians representing more than 40 specialties. In 2011, Henry Ford Hospital was one of four recipients of the Malcolm Baldrige National Quality Award. “Our mantra is to focus on the patient first, and we believe that the best way to do that is through the captive model. As such, we have had employed physicians since day one and radiologists on staff since the 1930s, when technological advances began to ramp up,” Nantais says. HFMG uses a base-plus-productivity model wherein 85% of physicians’ compensation is salary and the remaining 15% is tied to productivity. Radiologists have assigned duties and are encouraged, under the system’s academic model, to engage in teaching and research activities. Compensation is probably at the mean, Nantais notes, adding that occasional retention bonuses sweeten the pot. The fact that performance is measured against quality, rather than

When it isn’t about the money—and radiologists aren’t concerned that they have to push patients through the system—the caliber of care and the proper use of resources fall into place. —Thomas Nantais, FACHE Henry Ford Medical Group

Radiologists say that they cannot afford to do this, and hospitals respond that they cannot afford to pay. —Timothy Stampp, MBA Medical Imaging Specialists

output, minimizes turnover and forms a better basis for radiologist–hospital relationships because both sides feel that their priorities and concerns are being addressed, Nantais says. He reports that the hospital’s quality of care is 17% higher than average, and its costs are 20% lower. “When it isn’t about the money— and radiologists aren’t concerned that they have to push patients through the system—the caliber of care and the proper use of resource fall into place,” Nantais explains. “We may have some

issues with recruitment in some radiology subspecialties, such as interventional radiology and neuroradiology, but it isn’t about the money. It has to do with the pool of physicians out there.” Even some hospitals that operate under a contract model have begun to negotiate contracts, in their quest to draw closer to physicians, that call for a baseplus-productivity payment arrangement. MIS advocates this approach, Stampp reports, because the combination of the two elements yields physicians a sense

www.imagingbiz.com | April/May 2012 | Radiology Business Journal 49

Alignment | Hospitals and Radiologists

We are fortunate in that the hospitals are very receptive to our playing a leadership role. —Richard Collins, MD

There remain hospitals where the prevailing thought is that radiologists— employed, under contract, or without a formal contract—should not be entitled to a seat at the table, but practitioners want more of a stake. —Scott Raymond North County Radiology

of stability, while fostering a culture that values effort and output. “They are left to concentrate on critical issues—quality of care and appropriate utilization—instead of the figures that are going to be on their next paychecks,” he observes. Moving Forward While compensation remains high on the list of issues that disturb physician– hospital relations, establishing more open lines of communication tops the list. MIS clients are urged to form operating committees composed of constituents from the hospital and radiology sides alike. With these committees in place, each physician provides input pertaining to quality control and improvement. Hospitals and physicians have a framework and vehicle for cooperative endeavors to minimize waste and optimize productivity, leading to better care for patients, reduced expenditures, and a healthier hospital bottom line. Committees operate in an environment of transparency, with economic and quality measures visible to all parties. It’s even more important for both sides to give at least a portion of what the other side needs, but is not currently getting. North County Radiology, a 23-physician imaging practice in Oceanside, California, serves—and maintains highly viable contract relationships with—three hospitals in San Diego County. Scott Raymond, CEO, credits the stability

partly to his group’s level of involvement in hospital affairs. Radiologists affiliated with North County Radiology sit on the executive committees of all three hospitals and contribute input to myriad decisions pertaining to everything from equipment acquisition to patient care, safety, and performance measures. “There remain hospitals where the prevailing thought is that radiologists—employed, under contract, or without a formal contract— should not be entitled to a seat at the table,” Raymond says, “but practitioners want more of a stake.” Richard Collins, MD, president of Salem Radiology Consultants (SRC) in Oregon, agrees about that stake. Representatives of SRC (which serves two hospitals and an urgent-care center/ clinic) actively participate on boards and committees, giving them the opportunity to demonstrate the value of radiology services to the institutions, as well as to emphasize the practice’s commitment to patient care. “We are fortunate in that the hospitals are very receptive to our playing a leadership role,” Collins observes. SRC does not maintain imaging contracts with the hospitals; the arrangement is informal. Collins says, however, that the extent to which these institutions enmesh the group in all aspects of operation has paved a clear path for a successful, low-friction arrangement

50 Radiology Business Journal | April/May 2012 | www.imagingbiz.com

and strong, symbiotic relationships. It’s just as significant that radiologists also seek enhanced service-exclusivity protection. In favor, Townley says, are exclusivity agreements stipulating that reading privileges will not be granted to physicians outside the specialty, as is currently a common practice. Some radiologists also hope for compensation for services provided to emergency departments and for similar unpaid work. Hospitals suffer from a largely unmet desire for fewer conflicts of interest—for example, for radiology groups to eschew competing (via follow-up referrals) with the institutions with which they partner. According to Sherry, there remain some radiologists who, for various reasons, are not agreeing to hospitals’ requests that they spend more time on-site during the day and provide some evening and weekend coverage. Hospitals’ needs for a higher level of subspecialty care and for consulting services for referring physicians also remain somewhat unmet. “While it is too early to know exactly how the ACO situation will play out, we are, unequivocally, at a really pivotal juncture,” Sherry concludes. “Radiologists need to assert themselves more and provide value, so as to move into positions of influence.” By the same token, hospitals should recognize the value that radiology brings to the table—in the way that professionals are compensated and in the way that they are given a louder voice, in the hospital’s ear. “All of us who are sitting around the table face increasing financial pressures and declining reimbursements, and everyone is affected. Improved relationships will not relieve these pressures entirely, but they will make for a far less bumpy radiology road ahead,” Sherry says. Julie Ritzer Ross is a contributing writer for Radiology Business Journal. Reference 1. Sherry CS, Gunderman RB, Herrington WT, Berlin L, Larson PA, Muroff LR. ACR task force report: relations between radiologists and hospitals and other health care organizations. J Am Coll Radiol. 2010;7(6):410-418.

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Massachusetts Health Reform | The Radiology Experience

Massachusetts and Health-care Reform: The Radiology Experience

The chair of radiology at a prominent Boston hospital chronicles the changes occurring at breakneck speed in Massachusetts in response to health reform—and their impact on radiology By Cheryl Proval

hile the fate and integrity of the Patient Protection and Affordable Care Act (PPACA) are likely to be clarified in this highly polarized presidentialelection year, Massachusetts continues along a path (begun 5.5 years ago) to reform its health-care system under a law that shares many of the hallmarks of the PPACA—including the controversial individual mandate to buy insurance currently before the Supreme Court. Jonathan Kruskal, MD, PhD, chair of radiology at Beth Israel Deaconess Medical Center (BIDMC), Boston, provided a guided tour through that journey on December 28, 2011, at the annual meeting of the RSNA in Chicago, Illinois. His riveting presentation, “Health Care Reform: What Does It Mean for Radiology,” paid particular attention to the effects of reform on radiology. Kruskal notes that the health-care crisis is coming down to two monumental issues: providing access to high-quality care and controlling costs. “We, in Boston, will be fortunate to have had seven years of experience already when the PPACA comes into effect in 2014,” he says. “We are very much in it right now, experiencing it on a daily basis.” Since the state’s reform law was enacted in 2006, it has widened access to care, but cost continues to be an issue, with Massachusetts and Vermont leading the nation in the average monthly cost of individual health insurance, in 2010, at double the national average (at $400 per person).1 Another issue that received considerable media coverage in 2010—and attracted the attention of

government officials—was the wide price differential among hospitals in Massachusetts. “Within Boston alone, there is sometimes a threefold price difference for every type of service, including imaging services,” Kruskal acknowledges. The law established an independent public authority, popularly known as Health Connector (see figure, page 56), to act as an insurance broker that offers private plans to residents through a Web service that enables residents to do comparison shopping for individual health-insurance policies and specific medical services. Kruskal reports that costs for gallbladder removal at various Bostonarea hospitals range from $7,000 at Quincy Medical Center to $12,500 at

Massachusetts General Hospital. The same comparison can be made for MRI, CT, or any other service. For patients attempting to reduce their copayments and deductibles, he notes, “It’s all there on the Web to help you make your decision to reduce your health-care cost.” A Race to the Bottom In June 2010, Martha Coakley, Massachusetts attorney general, issued a report2 that found that spending for private health insurance in Massachusetts had climbed 6% from 2007 to 2008 and 10% from 2008 to 2010, significantly outpacing the national averages of 4.9% and 4.6%, respectively. “Not only were the premiums the highest in the nation,” Kruskal recalls,

Preload: Preview v In Massachusetts, where health-care reform has been in place for 5.5 years, rampant consolidation among providers is underway, aggressive new for-profit competitors are claiming market share, and care is moving out of the hospital and into the community. v Narrow network plans and a reshuffling of physician–hospital alignments have disrupted referral patterns, and nonprofit hospitals are fighting back by developing their own plans to compete for patients who shop for insurance on the state exchange. Meanwhile, hospitals have lost millions of reliable state dollars for uncompensated care, with 98% of residents now insured.

52 Radiology Business Journal | April/May 2012 | www.imagingbiz.com

v Pressure is on radiology to assume responsibility for imaging utilization, with potential financial benefits—but also the risk of penalties for not hitting targets. Other concerns are the ability to meet educational and research missions, as declining admissions have adversely affected the hospital’s ability to subsidize those activities. v The good news: After leading the nation in health-insurance costs, the state finally succeeded in reducing premiums, in 2010, from first to ninth in the nation.

“but health-care costs were outpacing the nation’s. In fact, per-person health spending in Massachusetts was 15% above the national average.” The report also contained some sobering data on imaging services covered under MassHealth (Medicaid): Nationally, spending on diagnostic imaging for the privately insured grew at an average rate of 10% annually from 2007 to 2009 (when spending reached $1.3 billion); Medicare-covered spending increased 2% from 2007 to 2008 (reaching $451 million); but MassHealthcovered spending on diagnostic imaging increased 27% from 2007 to 2008 (reaching $113 million). “These are huge numbers, and they certainly have grabbed the attention of politicians,” Kruskal notes. “They are absolutely determined to reduce the cost of imaging services.” Just weeks prior to the 2011 RSNA meeting, Coakley outlined a threepillared plan3 to help contain the state’s health-care costs. First, providers of health-care services would be required to disclose the full amount that consumers could be liable to pay. “If you are going to give a CT scan, there, on the wall, it must

show you how much it’s going to cost,” Kruskal says. Second, when a provider reaches a certain level of market clout, it would trigger a market review. Third, if the market has not corrected unwarranted price variation by 2015, the administration would be able to reject contracts with too much or too little price variation. In response, health journalist Philip Betbeze writes, “The future of health care looks increasingly like a race to the bottom on pricing.”4 Kruskal explains, “This is what we, as an imaging department in Boston, are increasingly experiencing on a daily basis. The government and the attorney general are determined to start cutting the cost of health care, and right up there in health care are all imaging services.” The Massachusetts Plan Former Massachusetts governor W. Mitt Romney’s bid for the Republican presidential nomination (coupled with the fact that President Obama used Romney advisors to develop the PPACA) has resulted in a heightened interest in Massachusetts health care. Kruskal offers a brief summary of the Massachusetts health plan.

A cornerstone of the plan is Health Connector, an electronic exchange that enables individuals to compare prices for health care. Blue Cross Blue Shield and Tufts are among the many companies that have signed up to offer competitively priced health-care products. Consumers also can shop for an MRI exam of the brain, and if the provider has ACR® accreditation, then its quality score would be high. “Patients are looking at this, and when they do come, they come because they know what it’s going to cost them,” Kruskal notes. The introduction of the exchange has had a significant impact on market dynamics in Massachusetts, and BIDMC has seen patients previously covered by Blue Cross Blue Shield move to plans offered on the exchange because the prices are lower and the coverage is better. Many state workers, including teachers and police, also are moving to these plans. “The number of patients moving has been large, and they are all going to these competitively priced plans, across the state,” Kruskal says. At the same time, unemployed patients are moving to the free plan, and hospitals are no longer

www.imagingbiz.com | April/May 2012 | Radiology Business Journal 53

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Massachusetts Health Reform | The Radiology Experience

Figure. Health Connector acts as an insurance broker to offer private insurance plans to Massachusetts residents.

reimbursed by the state for serving the poor (which amounted to several million dollars for BIDMC alone). “Has this been successful?” Kruskal asks. He cites a 2011 poll,5 conducted by the Harvard School of Public Health and the Boston Globe, which found that 63% of residents favor the plan. “Break it down into political groups: 77% of Democrats like it, 60% of independents like it, and 40% of Republicans like it— which is interesting, because it is actually a Romney plan,” he adds. The effect, in aggregate, is that 98% of the residents of Massachusetts have health insurance, and the highest growth in the past three years has been among unemployed adults, Kruskal reports, driven by the economic downturn in the state. Massachusetts has resolved the problem of covering more patients, but health-care costs have continued to rise. “Our governor has been quite clear that he wants to revamp the way physicians and hospitals are paid radically,” Kriskal says. “He wants to pay us for taking care of patients and keeping them healthy, rather than for what we actually do.” Late last year, the state secretary of Health and Human Services directed a subcommittee to explore moving 95% of the state’s health care to global payments within the next five years. “In my own experience, when they attempt to do something, they seem to succeed,” Kruskal says. Markets Reverberate Massachusetts health-care reform not only has brought health-care pricing into stark relief, but also has triggered a

wave of consolidation, the introduction of strong for-profit competitors, and a proliferation of provider health plans. “There is a furious consolidation of hospitals taking place in Boston. I’ve never experienced anything like this,” Kruskal observes, identifying Partners HealthCare and Steward Health Care as the two most active players. “Steward didn’t exist a year ago,” he says of the new 800-pound gorilla on the Massachusetts health-care scene. Owned by a New York venture-capital group, Cerberus Capital, it now has many member hospitals in and around Eastern Massachusetts, it is offering high-quality care and insurance discounted by 20% to 30%, and it is sending its patients to Partners HealthCare for surgery and care, if needed. Late last year, Steward bought a 150-physician IPA formerly associated with BIDMC to accommodate primarycare visits, costing BIDMC 25,000 covered lives. Tiered programs and narrow network plans are flourishing all over the state, Kruskal reports. Customers get breaks on premiums by agreeing, in advance, to go to certain physicians and hospitals. One Blue Cross Blue Shield plan specifies 15 high-cost hospitals to avoid, and if patients don’t do so, they will pay (for instance) an additional $450 out of pocket for an MRI exam. The narrow networks have significant implications for hospital—and imaging— referral patterns. Kruskal reports that a letter was sent to all BIDMC physicians by Blue Cross Blue Shield advocating that patients be sent to freestanding laboratories and outpatient imaging

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providers, where they would receive more affordable care at greater convenience. Two days later, a letter from the Beth Israel Deaconess Physician Organization arrived; it stated that the group had signed an agreement for outpatient laboratory services with Quest Diagnostics, which meant that patients who made outpatient visits to primary-care physicians associated with the hospital would no longer be referred to the hospital for testing. Kruskal reports that Shields Health Care Group, with 31 imaging sites in Massachusetts, has approached the hospital’s physician organization about offering considerably lower-priced CT and MRI exams to BIDMC patients. “This is what the physicians want to do, and this is what the patients want to do,” Kruskal says, “so things are moving very, very rapidly in Eastern Massachusetts.” Providers also are launching their own plans. Massachusetts General Hospital, Brigham and Women’s Hospital, and several other hospitals have created the Neighborhood Health Plan, which will give them an additional 240,000 covered lives. Boston Medical Center has also entered the fray, with a new HMO. Shared Savings and Costs Massachusetts providers are getting a taste of shared savings, a cornerstone of the federal government’s accountablecare organization (ACO) program. In December 2010, BIDMC signed an alternative quality contract with Blue Cross Blue Shield, under which the hospital’s physicians agreed to try to keep care costs under specified targets, in exchange for an opportunity to share equally in the savings with the insurer. “What wasn’t mentioned up front, however, was that any budget surplus would go to the primary-care physicians,” Kruskal reports. “As much as we, as radiologists, could minimize unnecessary imaging, any benefit that comes out of that, financially, is directed to the primary-care physician.” Kruskal acknowledges that any service that occurs benefits radiology, and speculates that the ability to manage utilization could result in rate increases, as well as an opportunity to prevent patient

This is what the physicians want to do, and this is what the patients want to do, so things are moving very, very rapidly in Eastern Massachusetts. —Jonathan Kruskal, MD, PhD

leakage out of the hospital system. It also entails a much greater alignment among caregivers. “This means we have to work very, very closely with our primary-care physicians,” he says. There were, however, costs associated with participating, including costs incurred to administer the utilization program. The radiology department had to hire 15 nurses, and income dropped as a result of reducing volumes in CT, MRI, and PET by 11%. Putting a dollar amount on savings was a key strategy in reducing utilization, Kruskal says. Ordering physicians received monthly reports on the cost of their imaging orders, linking progress to the dollars at risk. BIDMC also distributed a one-page list of 56 common tests and procedures with their prices, further raising awareness of the cost of care. Unfortunately, 11% was just shy of the 12% target specified in the alternative quality contract. Kruskal says, “Guess what: If you don’t hit your target, there is a big fine, and our physicians had to contribute to paying this $2.5 million fine because we didn’t reduce imaging enough.” The experience, however, is likely to be helpful as BIDMC physicians prepare to participate in the government’s pioneer ACO program, as one of 33 groups selected nationwide. “We have no idea what pioneer ACOs are and how this will affect us,” Kruskal says. What he does know is that it will be provider led, with a focus on delivery systems (not health plans). Many health-plan functions will be moved to the delivery system, and payment will be based on outcomes, not services. Physician alignment will be critical, but how the program will affect the hospital is a big question mark. “This pioneer ACO is not with our hospital; it is with our physician groups, which is a whole new ball game,” he

says. The cost of administering the program—and financing the requisite IT purchases—is another unknown. The Impact on Radiology Kruskal addresses the effect that Massachusetts health-care reform has had on radiology, given the long-standing mandate to improve value to patients while maintaining quality and reducing cost. “You have to look at this from two perspectives. How is this going to affect academic medical centers, as well as the larger imaging audience of private practitioners, hospital-based radiologists, and those working for larger groups?” Kruskal says. “Each of these is going to be affected to different degrees.” Volume reductions are a certainty. Kruskal reports large volume reductions in the past year or two due to utilization management and patient leakage to lowcost providers. He is projecting greater volume reduction for 2012 and beyond. Funds flowing from the hospital to the radiology practice have also gone down, and with them, the department’s ability to support research and provide critical services that it is required to provide. “Grant support is down, institutional support is down, and now, our medical school has given us a target of $218 per square foot we have to hit in order to keep our research space,” Kruskal reports. “In 2011, we had to give up 3,500 square feet of research space because we couldn’t hit this target. We had some very wellfunded departments that were just sitting there waiting to take our space, so it has become a very competitive market: Whoever gets the grant money gets the space, and our school is no longer supporting that space.” Price sensitivity is also a major issue, fueled (in part) by aggressive marketing campaigns directed at patients by low-cost, high-quality providers. Kruskal reports

many calls from primary-care physicians and patients who want to know the cost of an imaging procedure. In general, less-acute cases are being pushed to the community, where the care is cheaper and more convenient—and for the first time, academic institutions are feeling great competition from for-profit providers. A positive result of declining reimbursements in Boston is that it has inspired conversation among physicians about joint ventures. “For the first time, we, as a group of physicians, are going to talk seriously with others about what kind of options we have for joint ventures, so that we can try to deal with this together and try to match what is happening out in private practice with some of these low-cost providers,” Kruskal reports. Bent Cost Curve and Mission Another positive result, from the state’s perspective, is that all of these developments finally have resulted in something that has eluded policymakers since reform was launched: A study6 released by the Commonwealth Fund in 2011 reported that the average cost of Massachusetts health-care premiums had declined. “We’ve finally fallen from being at the top, in health-care costs, to being ninth in the country,” Kruskal reports. “Health-care costs are being reduced in Massachusetts, while simultaneously going up in other states.” As the chair of an academic radiology department, Kruskal is concerned about the impact of reform on the educational mission of the specialty. He wonders, “Are we, as a profession, still as attractive as we were?” He notes the reduced applicant pool for radiology residencies last year and the 41 positions that were unmatched nationally (for the first time in many years). He also mentions the increasing expectations of teaching without an increase in support, with $6 billion in support for graduate medical education and $680 million in federal research funding still at risk. “We are going to have to start teaching our residents about strategic planning, the Physician Quality Reporting System, and maintenance of certification. All of these are going to have to become part of the standard vernacular of all

www.imagingbiz.com | April/May 2012 | Radiology Business Journal 57

Massachusetts Health Reform | The Radiology Experience

The Massachusetts Marketplace According to Jonathan Kruskal, MD, PhD, imaging in Massachusetts is now characterized by: • physician–hospital alignment, • volume shifts to the community, • joint-venture options, • a rapidly evolving marketplace, • a push to value and narrow differentiated provider networks, • projections of greater volume reductions, • less-acute cases moving into the community, and • competition from for-profit providers.

clinical radiologists,” he says. “The number of research papers on outcomes, effectiveness, and appropriateness is increasing tremendously, and this will become important, going forward.” Kruskal also is concerned about the clinical mission, in the wake of reduced FTEs, salaries, and benefits, as well as a general sense of uncertainty that prevails among Massachusetts physicians (and radiologists, specifically). “Massachusetts isn’t the state with the lowest cost of living, so salary and benefit reductions in Massachusetts have certainly had their impact. The financial viability of academic medical centers has been questioned, for the first time. A lot of our information is being shared with people developing joint ventures or determining how much we should be paid. At our own institution, the physicians are literally waiting to see who we are going to be in business with,” he says. Kruskal is seeking appropriate measures of productivity for clinical and academic work in this new environment, as well as the success factors and skills that radiologists will need to thrive. Flexibility and a willingness to be helpful are among those requisite skills, he believes. Radiology’s Marching Orders In Kruskal’s experience, flexibility and the ability to respond to change might be the most important skills for the future. Radiology also must become more patient focused, must find ways to reduce charges

in the inpatient setting, and must explore joint ventures with a variety of partners. “We have to be ready to mount a nimble response to change,” he advises. “We also need to recognize that accurate and timely market and financial data—all of the data that we have—now need to be used to forecast and monitor change, and to model the impact and response.” This will require new modeling tools that will incorporate the standard measures of productivity and financial data and will enable leaders to use the data in new ways to measure and forecast both the impact of change and the response to it. Kruskal notes that the ACR and the RSNA have long recognized the need for the face of the radiologist to be seen by more health-care stakeholders. The time has come for radiologists to embrace that sea change. “We’ve got to become patient focused,” Kruskal says. “I wish that when our hospital entered into an alternative quality contract, we had been invited to the table. We needed to be there to say, ‘Why are you going with a 12% reduction? We’d settle for 5%, but why don’t you have us work as consultants to help reduce imaging utilization?’ We need to get radiologists to the table to help with these imaging problems.” Kruskal has been charged, by his hospital, with trying to eliminate inpatient imaging. The challenge is to take cost out of individual DRGs by shifting as much imaging as possible to the outpatient setting. This attempt is being made using decision-support tools; inpatient imaging costs are also being reduced by taking a close look at the number of scanners, technologists, and faculty needed, as well as how often a contrast agent is used (and the size of the dose). “We’ve got to reduce charges. There is no doubt about it,” he emphasizes. “The for-profit groups are at much lower cost levels than we are. We need to try to do this, and we need to look at joint-venture options.” Kruskal advises his colleagues to be proactive about imaging utilization management. “We don’t control the volume of our studies right now; that is done by the ordering physicians, but we can work with them to order the

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appropriate studies,” he notes. “Rational utilization actually can be achieved.” The key, he says, is to reiterate the role of imaging in reducing surgical procedures, facilitating diagnosis and care, and saving lives. “We need to keep pushing the basic idea: Appropriate imaging utilization provides tremendous value today,” he concludes. Cheryl Proval is editor of Radiology Business Journal. References 1. Norton M. Analysis: Mass. individual health premiums highest in nation. Boston Herald. http://bostonherald.com/business/ healthcare/view/20110809analysis_mass_ individual_health_premiums_highest_ in_nation. Published August 9, 2011. Accessed April 12, 2012. 2. Massachusetts health care cost trends: trends in health expenditures. http://www. mass.gov/eohhs/docs/dhcfp/cost-trenddocs/cost-trends-docs-2011/healthexpenditures-report.pdf. Published June 2011. Accessed April 12, 2012. 3. AG Coakley offers reforms to tackle skyrocketing health care costs. http:// www.mass.gov/ago/news-and-updates/ press-releases/2011/2011-11-18-mahpconference.html. Published November 18, 2011. Accessed April 13, 2012. 4. Betbeze P. With rate-setting proposal, MA leads pricing race to the bottom. HealthLeaders Media. http://www. healthleadersmedia.com/content/LED273465/With-RateSetting-ProposalMA-Leads-Pricing-Race-to-the-Bottom. Published November 18, 2011. Accessed April 12, 2012. 5. Lazar K. Support for state health law rises. Boston Globe. http://articles.boston. com/2011-06-05/news/29686092_1_ massachusetts-law-health-law-healthcare. Published June 5, 2011. Accessed April 13, 2012. 6. Schoen C, Fryer A, Collins SR, Radley DC. State trends in premiums and deductibles, 2003–2010: the need for action to address rising costs. The Commonwealth Fund. http://www. commonwealthfund.org/Publications/ Issue-Briefs/2011/Nov/State-Trends-inPremiums.aspx. Published November 17, 2011. Accessed April 12, 2012.

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The IDN | Deployment of Imaging

Radiology and the IDN: The Big Shift Managing radiology across the integrated delivery network (IDN) means condensing the value chain along logistical lines, considering the population’s health needs, and—inevitably—migrating technology into the community By Matt Skoufalos

rowing your high-tech imaging business is just not the same game that it used to be, according to William Barta, corporate director of imaging services for Fairview Health Services (Minneapolis, Minnesota). “The days of patients coming to us just because they have to are gone,” he says. “It’s a whole different mindset from what health care used to be years ago. It really boils down to the economy, and health care is late to the game, from a sales perspective.” He continues, “Disposable dollars are fewer, and gas prices are up; employers are expecting people to pay a higher percentage of their deductibles or copayments, and people are becoming savvy shoppers. We get pricing calls all the time.” When times get tough, the toughminded must become more creative in order to bolster their positions. In Minneapolis, the company is taking advantage of the local corporate environment (which includes the headquarters of Best Buy and Target)

to grow its brand through a mobile mammography business that Barta describes as thriving. It’s just one example of the ways in which Fairview Health Services is thinking laterally about driving the delivery of care to its patients.

“We’re like most other providers,” Barta says. “We are looking at expanding hours, requiring and requesting physicians to work later, staggering shifts so that they work in the evenings, and trying to funnel people to their primary-care providers—

Preload: Preview v A number of factors are driving IDN

v Exams must be billable, so tools and

imaging into the community: price sensitivity, service considerations, and economics.

algorithms must be available to help physicians make the right decisions.

v Taking a page from turn-of-the-century v As providers slug it out for a shrinking customer base, they are ramping up the service quotient, which means expanded hours, staggering shifts to cover evenings and weekends, and putting the technology where the customers are with innovative services such as mobile mammography.

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captains of industry, IDNs are using capital judiciously, synchronizing strategies within existing service lines, and taking advantage of local market conditions to create new opportunities.

v As imaging moves out of the hospital, look for IDNs to create a host of mashups between radiology and other primary-care and hospital services.

We are moving down a pathway of very purposefully deciding what to do with our capital resources, where we deploy them, and what services we offer. —William Barta Fairview Health Services

so they have a relationship built, rather than an emergency-department visit.” That means purposely pushing business out of Fairview Health Services hospitals and into the primary-care setting, Barta says, which is subsequently driving its imaging business into the community. Inpatient volumes are declining steadily, Barta says, but patients are more acutely ill than ever. As a percentage of the total imaging volume, more imaging is taking place in outpatient facilities, but if you just shift patients from one setting to another, he says, “You can’t just rest on your laurels and expect to stay alive and stay in the black.” Every exam must be medically indicated—and, therefore, billable. “The key, today, is appropriate use,” Barta says. “You make sure you’ve got tools or algorithms in place so that physicians are making the right choices, from an examsequencing perspective. Reimbursements are down; many of the patients are paid under a DRG. It’s always a delicate balance, and you’re walking the line between billable services and putting through as many patients as you can, for staff productivity.” Fairview Health Services operates eight hospitals and roughly 70 clinics, but only two imaging centers with advanced imaging modalities. Barta describes this strategic approach as symptomatic of a greater nationwide trend whereby imaging centers are proliferating more slowly and at less distance from one another. Planning decisions are based not only on demographics and geography, but also on an economic perspective. “We are moving down a pathway of very purposefully deciding what to do with our capital resources, where we deploy them, and what services we offer,” Barta says. “At all sites, should we do cardiology, orthopedics, and interventional procedures?”

Captains of Industry Fairview Health Services employs the same strategies that drove the captains of industry at the turn of the 20th century. The dictates of horizontal and vertical

integration hold that success can be managed by condensing the value chain along logistical lines and controlling costs by outgrowing (or buying out) the competition. Barta says, “There’s a conversation that occurs every year, with the heads of two radiology groups, to determine what capital we need across the system. From a strategic perspective, where do we want to build or retain business, and where do we want to put another MRI system? Where does it demographically make sense to put in equipment?

The IDN | Deployment of Imaging

Where do we need to chip away at the competition?” At the back end, Fairview Health Services is harnessing the buying power of 24 autonomous facilities as part of a purchasing alliance of which the company is also part owner. The arrangement has worked well, so far, for disposable goods and pharmaceuticals, and now Fairview Health Services is hoping to bring the same approach to capital-equipment purchases. Barta explains, “Somehow or other, you have to get your arms around your total capital expenditure for the year and say, ‘How do we aggregate this, as best we can, so that we leverage buying power to get the best deal, rather than doing oneoff purchases?’” The upside, according to Barta, is that these strategic decisions ultimately have a positive impact on patient care. Using capital investment judiciously, synchronizing strategies within existing infrastructure, and taking advantage of local market conditions to create new opportunities are all de facto means of obtaining additional resources for patient care (and improving the quality of that care). To maximize the benefit of these strategies, however, Fairview Health Services has to bring everything under one umbrella. That means being cautious about joint ventures because of regulatory

requirements. Fairview Health Services is also working to reduce service costs by standardizing its equipment across a handful of vendors and bringing its imaging-equipment repair/maintenance services in-house. Barta explains that taking on those upfront costs involves delicate negotiation. “Service is a revenue producer for vendors, and over the course of 10 to 20 years, it averages out in their favor,” he says. “We were averaging more than $12 million a year in service contracts. Those are real dollars. Our goal is to save roughly 40% of that.” In sum, Barta says, health care is still “very schizophrenic: We’ve got a lot of competing goals, from more volume and productivity to appropriate use and less use; from hospital administrators and general-management people who are being given incentives from a local perspective,” he says. “I think the system approach is the right approach, but having competition in a market area is the right approach because it drives quality at lower costs. Within each IDN, I think leveraging your scope, size, and best practices is the way to go.” Across the Continental Divide At Intermountain Healthcare (Salt Lake City, Utah), David Monaghan,

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MHA, assistant vice president of imaging services, says that the same types of conversations have been governing questions of resource deployment: What is available, what is needed, and where is the best place to put it? As in the case of Fairview Health Services, Monaghan says, Intermountain Healthcare is focusing more on the effective use of capital equipment than on new spending. “The hospitals in our health system have the complement of technology that they need,” Monaghan says. “The question is whether they need to recapitalize or add capacity as much as they have in the past.” In Monaghan’s thinking, Intermountain Healthcare is on the cusp of a muchneeded change. In recent years, he says, the company has increased its focus on segmenting or segregating the services that it delivers on campus. In some cases, he says, that has meant favoring the continuous deployment of technology; in others, Intermountain Healthcare is exploring the best ways to put equipment directly at the point of care—and that doesn’t necessarily mean keeping it in the hospital. “We don’t have a ton of excess capacity in terms of where the equipment lies today,” Monaghan says. “Everything’s being used pretty well. What we’re looking at is possible overcapacity, in some areas,

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We don’t have a blueprint because we determine the best strategy for each region based on the geographic need there. We’re really looking at how we can best care for patients in the many communities we serve. —David Monaghan, MHA Intermountain Healthcare

and a probable need to deploy additional imaging assets or redeploy existing capacity outside of the hospital.” Currently, the Intermountain Healthcare capital-equipment team is evaluating equipment inventory and any proposals to purchase equipment, centralizing those decisions from a systemwide coordination point. “It’s a fundamental shift in thinking,” Monaghan says. “We don’t want to put equipment in hospitals if an outpatient environment would offer the population what is needed to ensure that patients, referring providers, and payors are satisfied with the quality and cost of the services being provided.” In migrating care to outpatient locations, whether those are freestanding facilities or integrated sites that provide complementary service lines within the health system, Monaghan says, Intermountain Healthcare is preparing for health reform, aggressively, in the next three to five years—despite the absence of a top-down methodology for the exclusive government of its imaging-service deployment. That could mean pairing imaging with another Intermountain Healthcare division— such as laboratory services, obstetrics, or medical-group locations—if that’s the best way to achieve multiple goals in all service deployments in the area. “We don’t have a blueprint because we determine the best strategy for each region based on the geographic need there,” he says. “We’re really looking at how we can best care for patients in the many communities we serve.” According to Monaghan, Intermountain Healthcare decided that, in terms of the deployment and coordination of its imaging services, it needed to run imaging as a systemwide enterprise; in fact, he says, that’s why he was hired.

“We developed a team around this,” Monaghan says, “and within a short period of time, the paradigm of the future was becoming apparent. We were looking at all these things—maybe, a little bit, from the old thinking, with regard to competing and appropriate market-share growth—and we quickly got to the point where we’re moving toward populationbased care management. All of those strategies still applied; it’s just that the focus is now a little more urgent and is part of a bigger picture.” Like Fairview Health Services, Intermountain Healthcare tries to keep as much under its own aegis as possible. All of its sites are wholly owned. Although Intermountain Healthcare might outsource components of its business— for example, a third-party marketing company executes its physician-liaison strategy—the company finds that it hews closest to its mission when all the moving parts are under one roof. Monaghan reports that, by many accounts, it’s working. “We have measured a noted increase in referring-provider satisfaction and loyalty from that work,” he says. When the conventional wisdom fails to satisfy the needs of a health system, changes are already overdue. Future, patient-centered models of equipment deployment must necessarily reflect the needs of the communities they serve, even if they do not resemble anything previously explored within them. How well such models function within the hierarchy of their health systems could determine not only the amount of revenue that they generate and the number of patients they reach, but the overall viability of the systems themselves. Matt Skoufalos is a staff writer for Radiology Business Journal.

www.imagingbiz.com | April/May 2012 | Radiology Business Journal 63

FinalREAD

The Supersized Generation Each group must find the optimal practice size for its brand of radiology 2.0 By Curtis Kauffman-Pickelle

maxim in radiology, as we traverse this most uncertain healthcare landscape, is that size matters. In fact, it matters a lot. Consolidation is accelerating among independent radiology groups—especially those that have, for years, deferred the tough decisions that might have given them some breathing room as more aggressive competitors encroached on their territory—and the result is the formation of megapractices that enjoy certain economies and benefits of scale. As next-generation practices are being shaped in shareholder boardrooms around the country, it is interesting to note that each of the three basic options facing today’s radiology groups is replete with both high risk and uncertain reward. These options are: • to remain fiercely independent; • to merge with, acquire, or divest to another practice; or • to become employees of the hospital. There is no doubt whatsoever that risk and the somewhat chaotic nature of today’s health-care system are the two hinges that open onto today’s practice of radiology. The seemingly obvious rewards associated with alignment are themselves risky, most especially as alignment relates to loss of autonomy, entrepreneurship, and control of one’s own destiny. How you manage that risk, and how you bring a semblance of order out of the chaos, will be the key determinants of the successful longevity of the practice. This is true as it has never been before—even in what seemed (back in the day) to be very dark moments.

The Demographics Difference The difference today is one of demographics. Most practices face an additional factor, in working through these survival issues, that might not have existed

during previous market crises: the graying of the profession and the differences in vision among distinctly different generations of radiologists. Within the typical practice today, the younger partners are not necessarily the most aggressive in supporting independence. Security is a big issue, as is lifestyle. Sweat equity among the old-timers who built the practice might or might not be valued (or understood) within the context of the economic realities of the radiology 2.0 practice. This brings us back to the issue of size. There is no question that the advantages inherent in practices of a certain size can and do go a long way in creating an environment in which the optimal balance among security, lifestyle, professional satisfaction, and compensation can exist. Today, it is most difficult, at best, to see a pathway to such an optimal balance with groups of, say, 10 partners or fewer. There just is not enough capability to compete for highquality referrals with practices that have real depth on their benches—subspecialty coverage, modern IT, expert marketers, huge market footprints, and the like. Basically, our mom-and-pop cottage industry has been transformed into one in which a very high degree of professionalism, a keen process, solid infrastructure and resources, and visionary leadership are the keys to success. In other words, radiology has truly become a business, and tomorrow’s practices will succeed (or fail) based on their ability to understand the nature and nuance of the modern business enterprise. Within economic entities such as these, certain milestones mark points of maturation. All around us, businesses are consolidating into larger entities in order to gain economies. Eventually, many of them get too big to offer the type of customer service demanded by discriminating customers, and a new cycle begins: Boutiques that offer more individual service emerge. It is a cycle of business that we need to watch, and we must heed its implications for today’s practice of radiology.

64 Radiology Business Journal | April/May 2012 | www.imagingbiz.com

The Beauty of Big In this environment, bigger is better. How you get there—using which of the three options—will depend on the particular culture and demographic breakdown of the group. When you arrive, though, you need to start planning for the day when boutiques will compete with you at the margins, offering platinum levels of customer service, entrepreneurial nimbleness, and an ability to build lasting relationships. Balancing the risk/reward scenario is the art of evolving and running a modern radiology practice. There is really no perfect solution, but it won’t work to hope that the current headwinds will pass by and you will remain unaffected; that is just not going to happen. The smart imaging executive is deconstructing the growth and survival options to find the ideal size and structure for a particular group—one that takes advantage of today’s market realities, partner demographics, and lifestyle demands, as well as the need to build a sustainable practice. Independence can work, but it will not be as the same old practice that coasted along on the coattails of an evergrowing aggregate marketplace. If you choose this option, you will nevertheless need to build your practice into one that resembles a much larger, supersized group in every way. The ideal, then, is to find a size that builds a culture of security while maintaining an attitude of service and individual attention to customers. Around this ideal, a business structure that reflects modern leadership and economic principles needs to be created and nurtured, so that everyone within the organization will rally around the mission. In this way, a radiology 2.0 practice can be built that will thrive in this very complex environment. 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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