Betting Long: Technology Investment Trumps Partners’ Income Boost
Many radiology-practice leaders will, at one juncture or another, pursue business directions intended to increase partners’ incomes. While nothing is inherently wrong with this approach, following an alternate route that involves investing in technology to position the practice for greater income in the future—and leveraging data to justify and monitor the results of that expenditure—merits consideration.
This is the philosophy to which Greensboro Radiology in North Carolina has long subscribed. Eric A. Mansell, PhD, MD, president, says, “As we see it, many investments in technology represent investments in patient care. Better patient care is largely what sparks practice growth. Practice growth eventually leads to higher partner incomes—so partner-income increases are worth deferring for the sake of investments in patient care.”
In addition to five outpatient imaging centers and several private physician practices, Greensboro Radiology currently serves eight hospitals, four of which are affiliated with the Moses Cone Health System, Greensboro, and four of which are independent facilities. Three years ago, practice leaders leveraged data to determine whether replacing a manual transcription method with a voice-recognition system would be a financially sound means of improving patient care while simultaneously addressing other issues.
Worth Saunders, MHA, Greensboro Radiology’s CEO, says that in 2007, “We were seeing a 24-hour turnaround on exam reports, and that was a detriment to the caliber of patient care on which we were building, and continue to build, our reputation. It was also a detriment to our brand. Just as important, at a time when teleradiology was really taking off, we wanted to expand our base of service beyond one hospital and to sharpen our competitive edge. We knew that if we attained these objectives, we would be in a good position for growth, then and in the future.”
To determine whether the voice-recognition system would constitute a sensible investment, practice leaders calculated (using figures supplied by the vendor) the total cost of acquiring the software, integrating it with the PACS, and supporting its management on an ongoing basis. They also reviewed a breakdown, shared by the Moses Cone Health System, of the costs incurred by its hospitals to transcribe radiologists’ reports. Next, the practice set a transcription fee per exam.
This, Mansell says, “was as close to cost as possible, to make it appealing—and significantly less than the hospital was already spending” on salaries and other transcription-related costs. Database tools created by Greensboro Radiology’s own IT staff were subsequently used to compare the initial and ongoing outlays for the voice-recognition system with the number of reports it could be expected to generate, given the volume of exams then being performed.
Mansell notes, “From the analysis, it became clear that we could charge close to cost to produce reports in 90 minutes, rather than 24 hours,” thereby leveraging the voice-recognition system to enhance patient care while attracting new business. Implemented three years ago, the system now generates 650,000 reports annually, distributing them to all of the sites that it serves.
Now that the voice-recognition system is in place, the income generated by the reports that it creates is monitored by regularly tapping into the practice’s billing system. Comparisons of this income with the initial investment in the software and with ongoing expenditures are then made. “We aren’t looking for a true return on investment on the system,” Saunders asserts. “We view the investment almost as the cost of doing business in a manner that supports better patient care, so as long as the numbers aren’t significantly out of sync, we are OK.”Julie Ritzer Ross is editor of RadAnalytics.com.
This is the philosophy to which Greensboro Radiology in North Carolina has long subscribed. Eric A. Mansell, PhD, MD, president, says, “As we see it, many investments in technology represent investments in patient care. Better patient care is largely what sparks practice growth. Practice growth eventually leads to higher partner incomes—so partner-income increases are worth deferring for the sake of investments in patient care.”
In addition to five outpatient imaging centers and several private physician practices, Greensboro Radiology currently serves eight hospitals, four of which are affiliated with the Moses Cone Health System, Greensboro, and four of which are independent facilities. Three years ago, practice leaders leveraged data to determine whether replacing a manual transcription method with a voice-recognition system would be a financially sound means of improving patient care while simultaneously addressing other issues.
Worth Saunders, MHA, Greensboro Radiology’s CEO, says that in 2007, “We were seeing a 24-hour turnaround on exam reports, and that was a detriment to the caliber of patient care on which we were building, and continue to build, our reputation. It was also a detriment to our brand. Just as important, at a time when teleradiology was really taking off, we wanted to expand our base of service beyond one hospital and to sharpen our competitive edge. We knew that if we attained these objectives, we would be in a good position for growth, then and in the future.”
To determine whether the voice-recognition system would constitute a sensible investment, practice leaders calculated (using figures supplied by the vendor) the total cost of acquiring the software, integrating it with the PACS, and supporting its management on an ongoing basis. They also reviewed a breakdown, shared by the Moses Cone Health System, of the costs incurred by its hospitals to transcribe radiologists’ reports. Next, the practice set a transcription fee per exam.
This, Mansell says, “was as close to cost as possible, to make it appealing—and significantly less than the hospital was already spending” on salaries and other transcription-related costs. Database tools created by Greensboro Radiology’s own IT staff were subsequently used to compare the initial and ongoing outlays for the voice-recognition system with the number of reports it could be expected to generate, given the volume of exams then being performed.
Mansell notes, “From the analysis, it became clear that we could charge close to cost to produce reports in 90 minutes, rather than 24 hours,” thereby leveraging the voice-recognition system to enhance patient care while attracting new business. Implemented three years ago, the system now generates 650,000 reports annually, distributing them to all of the sites that it serves.
Now that the voice-recognition system is in place, the income generated by the reports that it creates is monitored by regularly tapping into the practice’s billing system. Comparisons of this income with the initial investment in the software and with ongoing expenditures are then made. “We aren’t looking for a true return on investment on the system,” Saunders asserts. “We view the investment almost as the cost of doing business in a manner that supports better patient care, so as long as the numbers aren’t significantly out of sync, we are OK.”Julie Ritzer Ross is editor of RadAnalytics.com.