Preparing for Potential Reform: The Hospital View
Some proponents of national health care reform expect to pop the champagne corks any day now in celebration of getting a bill through Congress. Meanwhile, some administrators of hospitals and imaging departments expect to pop the lids off aspirin bottles so that they can begin nursing the headaches caused by undertaking the strategic repositioning of their organizations. Gerard A. Durney, MBA, senior vice president of surgical and ancillary services for the three-hospital Bon Secours Charity Health System in Suffern, New York, offers a tip of the hat to any enterprise that’s even able to get its collective mind around the impending changes, let alone map out a new course in response. 
Gerard A. Durney, MBA For starters, no one outside Congress has yet seen the finalized provisions of the reform legislation (the process of reconciling the Senate and House versions is taking place behind closed doors). “There are some critically important considerations we don’t yet know,” Durney says. “How many more people will be insured? To what degree will they be insured? What kind of copayments are they going to be responsible for—in other words, how much skin are they going to have in the game? Without knowing these details, strategic planning is very difficult.” Rowing Together Durney believes that whatever shape the reform legislation takes, it will almost certainly ratchet down reimbursement rates from present levels. That, he says, might prove more brutal for imaging centers than for hospitals and could conceivably attract more hospitals into the imaging center arena. “I can envision hospitals buying up existing, privately owned freestanding imaging centers that can no longer turn a profit or that are having cash-flow problems,” he says. He also can readily imagine hospitals establishing imaging centers by partnering with private radiology practices that do not already own any such facilities. Partnerships of other kinds will probably be essential as well, once the overhaul of health care takes effect. “Hospitals are going to need to collaborate more comprehensively with their communities’ physicians. We’re heading into rough seas, and we’ll never make it through unless we’re all rowing in the same direction and pulling uniformly on those oars,” Durney says. Specifically, hospitals must make it easier for physicians to do business with them. “Physicians’ overhead is probably only going to continue increasing, which means they have to see more patients per day in order to stay even in the face of those declining reimbursements,” Durney says. “Therefore, it’s incumbent on us to be a place where physicians can maximize both their productivity and the quality of the care they provide.” Toward that end, hospitals might find it timely to upgrade their data-archiving/distribution infrastructure; Durney says, “A goal should be to provide physicians with clinical information from all points along the continuum of care and to make it possible for them to access that information, in its entirety, from a single point of access—but a point of access that can be available anywhere, at any time.” Speaking for his own organization, in which 80 private-practice radiologists interpret more than 156,000 radiographic, MRI, CT, PET/CT, ultrasound, and nuclear-medicine studies each year, Durney says, “We’re going to be looking at improved ways of managing utilization, on both the inpatient and outpatient sides.” One reason that needs to happen is that Medicare is considering using radiology benefit management (RBM) companies “in the same way managed care did, with certification,” Durney says. If that happens, expect plenty of procedure denials, unless the role of the RBM is stretched to include educational outreach. “It would be helpful if they were to explain clearly, to ordering clinicians, the proper sequence of imaging—the sequence that would win authorization the next time the same type of case is encountered,” Durney says. Invest With Care A stated goal of health-reform supporters is to cover many of the millions of US residents currently lacking health insurance. Should they succeed, the newly covered might well represent a sharp increase in hospitals’ admissions volumes. More volume might or might not translate into a need for more imaging equipment, radiologists, or technologists, and hospitals must be careful about misreading the signals, Durney advises, explaining that health care reform could reduce the capital available for equipment acquisition. For example, some nonprofit hospitals depend heavily on philanthropic generosity, and these might struggle to attract contributions if health reform has negative economic effects. Durney says that no matter what, health care organizations should react to reform by becoming more cautious in how they spend their capital dollars: “I would consider first exploring whether extra patient volume can be accommodated simply by increasing the days and hours of operation for existing equipment,” he says. The good news is that the changes promised in Washington probably won’t take effect until 2014, giving organizations a bit of breathing space in which to develop their strategies. The bad news is that organizations could experience anxiety as soon as the reform package becomes law, depending on which provisions the final version contains. Considering health care reform provisional seems wise to some observers. Some changes could be fought all the way to the US Supreme Court before taking effect. In addition, November’s congressional elections could lead to follow-up legislation that would revise or remove some (or even all) of reform’s provisions before their 2014 implementation. Stranger things have happened, but even if this year’s reforms are undone, don’t be too quick to pop the champagne corks. “Imaging will remain a target, regardless,” Durney says. “They’ve got us in their gunsights, and it doesn’t matter whether you’re an imaging provider at a hospital or a freestanding center.” Any strategic repositioning should be addressed with that reality in mind.Rich Smith is a contributing writer for ImagingBiz.com.
Gerard A. Durney, MBA For starters, no one outside Congress has yet seen the finalized provisions of the reform legislation (the process of reconciling the Senate and House versions is taking place behind closed doors). “There are some critically important considerations we don’t yet know,” Durney says. “How many more people will be insured? To what degree will they be insured? What kind of copayments are they going to be responsible for—in other words, how much skin are they going to have in the game? Without knowing these details, strategic planning is very difficult.” Rowing Together Durney believes that whatever shape the reform legislation takes, it will almost certainly ratchet down reimbursement rates from present levels. That, he says, might prove more brutal for imaging centers than for hospitals and could conceivably attract more hospitals into the imaging center arena. “I can envision hospitals buying up existing, privately owned freestanding imaging centers that can no longer turn a profit or that are having cash-flow problems,” he says. He also can readily imagine hospitals establishing imaging centers by partnering with private radiology practices that do not already own any such facilities. Partnerships of other kinds will probably be essential as well, once the overhaul of health care takes effect. “Hospitals are going to need to collaborate more comprehensively with their communities’ physicians. We’re heading into rough seas, and we’ll never make it through unless we’re all rowing in the same direction and pulling uniformly on those oars,” Durney says. Specifically, hospitals must make it easier for physicians to do business with them. “Physicians’ overhead is probably only going to continue increasing, which means they have to see more patients per day in order to stay even in the face of those declining reimbursements,” Durney says. “Therefore, it’s incumbent on us to be a place where physicians can maximize both their productivity and the quality of the care they provide.” Toward that end, hospitals might find it timely to upgrade their data-archiving/distribution infrastructure; Durney says, “A goal should be to provide physicians with clinical information from all points along the continuum of care and to make it possible for them to access that information, in its entirety, from a single point of access—but a point of access that can be available anywhere, at any time.” Speaking for his own organization, in which 80 private-practice radiologists interpret more than 156,000 radiographic, MRI, CT, PET/CT, ultrasound, and nuclear-medicine studies each year, Durney says, “We’re going to be looking at improved ways of managing utilization, on both the inpatient and outpatient sides.” One reason that needs to happen is that Medicare is considering using radiology benefit management (RBM) companies “in the same way managed care did, with certification,” Durney says. If that happens, expect plenty of procedure denials, unless the role of the RBM is stretched to include educational outreach. “It would be helpful if they were to explain clearly, to ordering clinicians, the proper sequence of imaging—the sequence that would win authorization the next time the same type of case is encountered,” Durney says. Invest With Care A stated goal of health-reform supporters is to cover many of the millions of US residents currently lacking health insurance. Should they succeed, the newly covered might well represent a sharp increase in hospitals’ admissions volumes. More volume might or might not translate into a need for more imaging equipment, radiologists, or technologists, and hospitals must be careful about misreading the signals, Durney advises, explaining that health care reform could reduce the capital available for equipment acquisition. For example, some nonprofit hospitals depend heavily on philanthropic generosity, and these might struggle to attract contributions if health reform has negative economic effects. Durney says that no matter what, health care organizations should react to reform by becoming more cautious in how they spend their capital dollars: “I would consider first exploring whether extra patient volume can be accommodated simply by increasing the days and hours of operation for existing equipment,” he says. The good news is that the changes promised in Washington probably won’t take effect until 2014, giving organizations a bit of breathing space in which to develop their strategies. The bad news is that organizations could experience anxiety as soon as the reform package becomes law, depending on which provisions the final version contains. Considering health care reform provisional seems wise to some observers. Some changes could be fought all the way to the US Supreme Court before taking effect. In addition, November’s congressional elections could lead to follow-up legislation that would revise or remove some (or even all) of reform’s provisions before their 2014 implementation. Stranger things have happened, but even if this year’s reforms are undone, don’t be too quick to pop the champagne corks. “Imaging will remain a target, regardless,” Durney says. “They’ve got us in their gunsights, and it doesn’t matter whether you’re an imaging provider at a hospital or a freestanding center.” Any strategic repositioning should be addressed with that reality in mind.Rich Smith is a contributing writer for ImagingBiz.com.