Differentiate now or stagnate soon, warns radiology business guru

Apple used to push the world to “think different.” Today, the profession of radiology is being driven to think differentiation. And the impetus is issuing not from a single corporation, but rather from myriad market forces—from commoditization to consolidation to, perhaps most pressingly, ever-narrowing profit margins.

How are individual radiology practices to adapt and thrive in such an increasingly harsh business environment, especially when they had been seen as part of a unique—some would have even said “boutique”—medical specialty?

Curtis Kauffman-Pickelle, founding publisher of Radiology Business Journal, imagingBiz.com and Medical Imaging Review, and a 30-plus-year veteran of the business of radiology, took up that question this past spring in a vRad webinar titled “Radiology at a Crossroads.”

Given the pace of maturation happening within the radiology market space, “it is incumbent upon us to understand that we will increasingly be required to differentiate ourselves,” said Kauffman-Pickelle. “That means paying much closer attention to the principles of marketing and creating a value proposition that will set your [practice] apart from your competitors—the very ones who will most certainly be testing your ability to stay the course.”

Additionally, the same kinds of shakeouts and consolidations that have rocked other industries will, he said, “create new and sometimes strange bedfellows” throughout healthcare and within radiology.

Kauffman-Pickelle said practices successfully negotiating the stiff headwinds presently roiling the marketplace will simultaneously have to navigate increased regulatory burdens. “The regulators and all the payors know that there is defensive medicine. They know that easily 30 percent of today’s medical imaging could be characterized as unnecessary,” he said. “So we will see the ability of those in radiology to use data points to talk about appropriateness as one of the ways that you can differentiate yourself.”

There’s no data like rad data

As daunting as radiology’s present and future challenges seem, the profession may be nicely positioned to take advantage of some characteristics innate to many (if not most) of its practitioners—thanks precisely to the aforementioned data points.

Radiology has looked to analytics and informatics for probably longer than any other medical specialty, Kauffman-Pickelle pointed out. He said radiologists must now place that expertise front and center on their menu of core competencies.

“The fact is that we [in radiology] can leverage big data and develop it into actionable intelligence unlike any other specialty can,” he said, adding that, to do so, practices need to develop proprietary metrics and use them to rightly position the profession as “the protector of the patient. We can be at the forefront of using metrics to develop outcomes-based reports and utilization review. Rather than just being seen as a vendor or a group offering episodic benefits, we can be key and integral to the mission of the hospital or health system.”

Here, Kauffman-Pickelle stressed the criticality of jettisoning any lingering bureaucratic or institutional habits in order to innovate real upgrades in care delivery.

“We can take these process improvements and look to being a different kind of partner with the health system executive who is looking for solutions and for partners invested in helping their system thrive,” he said.

Partners in patient experience

The new era of consumer-driven healthcare is not something to come, but a reality right now, said Kauffman-Pickelle, noting that most hospitals and integrated delivery networks have a VP or at least director-level position dedicated to improving patient experience. The title of chief patient experience officer, CPEO, is not the norm now, but may soon be common, he suggested.

Radiology players make themselves essential to the patient-experience movement by, for starters, building loyalty in referral sources. A good place to begin is by showing referrers how radiology’s data and analytics can help them deliver on the patient-experience proposition, said Kauffman-Pickelle.

Every stakeholder working within, or in any way affected by, radiology needs to view the profession as a topnotch provider of service, he said. “And by the customer, I mean the referring physician, the referring physician’s office staff, the hospital, the payers—and the patients and the caregivers who are all part of the patient’s extended family,” he said.

“Everybody within that food chain is really your customer. And the degree to which you can provide platinum-level service” to all of them will dictate your degree of differentiation.”

Teamwork tips the scale

Hammering home a call for innovation, Kauffman-Pickelle exhorted radiology practices to think and behave like entrepreneurs. He emphasized that radiology needs to be more willing to take risks and move outside of comfort zones. Absent such a change in vantage point, practices should expect little change in results.

The next step is rallying the troops. “Everybody within your organization has to understand what the strategy is and must be able to articulate the benefits of that strategy for the other players within the organization, as well as to customers,” he said.

Internal buy-in is critical to achieving entrepreneurial nimbleness. This is a quality that “is going to be required if you intend to be at the top of the food chain in years to come,” he asserted.

Kauffman-Pickelle advised against allowing “functional silos,” or turf-protective departments or cliques, to remain isolated going forward. “From administration to clinical to physicians to techs to billing to front desk to revenue”—to whatever, wherever—practices must make it imperative that “each person within these functional silos really understands what it is we are trying to do in terms of differentiating ourselves vis-à-vis our competitors. We need to all be linked in a way that those functional silos break down the barriers so that we create a more fluid, nimble and responsive organization.”

Such unity of purpose is essential if radiology practices are to become indispensable to the hospitals and integrated delivery networks whose business they need today, tomorrow and in years to come.

Starter steps

Following the session, Medical Imaging Review asked Kauffman-Pickelle what quick and practical steps radiology practices might take in order to begin differentiating themselves right away. He offered three:

1. Read the 2011 book Great by Choice: Uncertainty, Chaos, and Luck—Why Some Thrive Despite Them All by Jim Collins. “It’s designed to help businesses navigate in tumultuous times,” he said. “I strongly recommend it.”
2. Dig in to doing whatever it takes to “get all staff and stakeholders on the same page, aligning all the functional silos in ways that maybe they haven’t seen in the past.”
3. Embrace a very robust and strategic plan for business development and marketing. “This is the time, if there ever was one, for radiology practices to differentiate themselves.” That won’t happen without a plan, said Kauffman-Pickelle.

“Even though these are tough times for radiology, and strong headwinds are often disruptive to the status quo, most of what we’re going through has precedent in many other industries and professions, including some in healthcare,” he concluded. “Consolidation that results in a certain level of commoditization and narrower profit margins can lead businesses to act in ways that orient toward success in this kind of environment.”

“Set your sights on the fact that you are a business owner,” he advised. “Ask yourself what entrepreneurial actions you can take to project and generate revenue, control expenses and differentiate yourself in your market.”

The webinar was one in a series organized by vRad. It and several others are available on demand at webinars.vrad.com/series.