In November 13, 2008, GE Healthcare, Waukesha, Wis, hosted a webinar entitled Interpreting the Future of Medical Imaging. Offering insights into the future of the field were Bob Maier, president and CEO, and Brian Baker, senior vice president, Regents Health Resources, Brentwood, Tenn.
Imaging will continue to grow, although the path to prosperity may include several obstacles, according to Maier, who adds that the playing field is leveling for all imaging providers. Among the key points presented at the outset were that all imaging operators will require accreditation by 2011, that both provider-based reimbursement and the DRA lesser-of fee schedule will grow by 3% in 2009, and that there will be an increasing focus on quality.
Maier shares the view of Daniel R. Levinson, inspector general, DHHS, who believes that imaging growth in the next five years will be fueled by research and its application to existing technology.
The 2009 reimbursement landscape will show a slight recovery from the DRA cuts mandated in 2006, and volumes will continue to rise. In 2009, Medicare-allowed services for advanced imaging (MRI, CT, and PET) are expected to increase by 9.7 million procedures, while allowed charges for the same will amount to $4.32 billion. As a ratio of charges to services, this is consistent with each year’s ratio since the enactment of the DRA.
Not all the news is good, however. In 2007, utilization was up 3.2%, but expenditures were down 12.7%. Among the challenges on the horizon is the cost of health-insurance premiums, which between 2002 and 2007 grew 4.4 times as quickly as the inflation rate and 3.7 times as quickly as wages.
This dramatic rise in premiums is already forcing more US residents to abandon health care coverage altogether or to assume greater control over their coverage by opting out of employer-subsidized programs and shopping for insurance privately. Often, the lower premiums of private policies are supported by higher deductibles, forcing consumers to pay out of pocket for medical services until the deductible is reached.
As this trend continues, consumers will increasingly shop by price for their medical services, including imaging. Transparency, then, will become an increasingly important imaging development.
Despite this development, hospitals continue to invest in imaging technology. In a poll of 1,282 critical access hospitals across the country, Regents Health found that over the next three years, hospital investment in additional technology or in upgrades will continue to rise:
| Services | Add Technology | Upgrade |
|---|
| MRI | 11% | 13.4% |
|---|
| CT | 4.9% | 28% |
|---|
| Ultrasound | 6.1% | 25.6% |
|---|
| DR | 3.4% | 24.4% |
|---|
| Catheterization lab | 2.4% | 0% |
|---|
| Digital mammography | 36.6% | 23.2% |
|---|
| PET/CT | 7.3% | 2.4% |
|---|
| Bone densitometry | 15.9% | 12.2% |
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That hospital investment will continue to rise may be disconcerting to partners in imaging center environments, which face their own set of challenges. These include radiology benefit management pressure, a shortage of capital sources, increased hospital competition, the need for service differentiation, stand-alone contracting disadvantages, an aging technology base, effective use of IT technology/tools, and reimbursement-reduction pressure from payors.
While the current economic climate is creating a buyer’s market, Maier and Baker shared the results of a Regents poll indicating that those who are interested in expanding through mergers and acquisitions will have a more difficult time finding financing. Nonetheless, this scenario bodes well for the private-equity and venture-capital–funded imaging organizations that wish to grow over the next five years, Maier and Baker believe.
All providers of imaging, however, will find that challenges abound. Maier and Baker identify the following challenges that will apply universally to all providers. There will be a lack of radiologists to handle the volume. At the 35th annual meeting of the American Healthcare Radiology Administrators, Frank Lexa, MD, MBA, described estimates of a radiologist shortage through at least 2020.
There will also be a lack of staff and qualified managers. As technology advances, so will the need for knowledgeable staff. Reimbursement will equalize with pricing transparency. Pricing structures may pose a unique challenge in the years ahead. Quality differentiation will be vital. Imaging centers, hospitals, and others will have to define their advantages more clearly to their referrers and to the public.
Precertifications will need to be automated, creating a possible solution to the rising costs of precertification. Service and product differentiation will be critical. As with quality differentiations, this will be a key to growth. Image access will also become universal.
To meet these challenges, Maier and Baker recommend strengthening three specific areas of the business. The first of these areas is an emphasis on strong professional services, including quality, timeliness, and subspecialty expertise. The second is a stronger market presence to spread the word of (or improve) a center’s reputation; to bolster referring loyalty: to provide information on locations, convenience, and capabilities; and to increase payor leverage. The third is superior customer service. In many cases, these aspects of overall service can be the cornerstone of growth.
Key service elements include
- a service-minded culture, in which everyone in the organization must understand the brand concept and play a part in promoting the brand at every possible opportunity;
- fast and easy scheduling, whether it is automated online scheduling or performed by a staff that is efficient, making response to a scheduling request as quick and as problem-free as possible;
- liaison relationships, in which field representatives will play a more important and active role in promoting the unique properties of imaging centers, with the ability to answer questions, solve problems, and promote the brand being key; and
- strong RIS/PACS implementations, as more referring physicians, particularly younger physicians, demand this technology and its continuing advances. Those imaging centers that can respond in kind should see their investments paid back via increased referrals.
Baker offers a shopping list of strategies for the top nine challenges facing imaging facilities over the next five years. First, to offset declining reimbursements, Baker suggests a more intense focus on payors and the potential rewards of frequent contract reviews. Second, while increasing volume is good, it also poses new challenges. These can be met with improved workflow, more training, and better technology. Third, decreasing profitability is a problem for all businesses, not just imaging. Here, the recommendations are frequent operational assessments to determine where costs can be cut without sacrificing quality and a market analysis to determine where some fees can be increased.
Fourth, aging technology requires a long-term capital acquisition plan to stay abreast of advances. Fifth, the goal of providing timely professional services can be met through incentives, ownership stakes, and productivity compensation, all designed to allow key people the ability to control the direction of the business. Sixth, through data mining, liaison visits, and educational programs, referring relationships can be supported to reduce encroachment by competitors.
Seventh, customer-service perceptions will be important over the next few years. Often, these perceptions will make or break a referral relationship. Here, Regents recommends a series of surveys and interviews of patients and referrers to determine wants and needs and to address both. Eighth, in a tight economy, access to capital is severely limited. Recommended options include developing a business plan to stay ahead of capital needs and consideration of a joint venture. Ninth, to address competition, Baker’s recommendations include the options of acquisition or a joint venture.
Regents Health Resources offers several reasons to be, as the presenters say, bullish on the future of imaging. These reasons include a growth in volume, a decline in self-referrals, and new technology that will promote the importance of imaging throughout health care.
