RBMA Spring Summit Roundtable: Imaging and the IHN

On May 22, “Imaging and Accountability: Imaging’s Role in the Integrated Health Network” was presented at the RBMA 2012 Radiology Summit in Orlando, Florida. This discussion has been excerpted from the statements of that panel, which was composed of a practice-president radiologist, a hospital president, an imaging-chain executive, and an industry analyst. Chad Calendine, MD, a diagnostic radiologist, is president of Advanced Diagnostic Imaging, LLC (Goodletsville, Tennessee). Josh Gray is managing director of the Financial Leadership Council of The Advisory Board Co, specializing in strategic finance, performance improvement, and imaging-performance partnerships. Curtis Kauffman-Pickelle (facilitator) is publisher of Radiology Business Journal. Robert LaDouceur is vice president of operations in business development for CDI, one of the oldest and largest chains of freestanding imaging centers. He is responsible for sales, operations, profit, and new-center development in Missouri, Kansas, and Florida. Marion McGowan, RN, is president of Lancaster General Hospital in Pennsylvania (a 525-bed regional and referral hospital); president of Women & Babies Hospital, Lancaster (a 98-bed specialty hospital); and vice president of Lancaster General Health, a regional not-for-profit health system. Cheryl Proval (moderator) is editor of Radiology Business Journal. Kauffman-Pickelle: In 2011, we assembled the CEOs of five radiology benefit management companies and had a spirited discussion to kick off this series. It was followed, later that year, by the assembly of the executives and an architect of decision-support systems to talk about utilization management. Now, for our third RBMA panel, we have a radiologist representing a new practice, an analyst, an operations person who is running imaging centers, and the president of a hospital. Together, they will give us a very interesting and diverse perspective on the issues affecting radiology’s future in the integrated health network (IHN). Proval: Many people in health care agree that coordination of care is a necessary step in achieving the triple aim of reducing cost, improving quality, and widening access. In your market, what kinds of conversations are you having about alignment with health-care systems, payors, and physician practices? McGowan: Generally, we’re trying to understand what the heck’s going to happen. There’s a question about how we might be able to work together to be as successful as we’ve been in the past—specifically, how we move from a production orientation to that of better alignment to help us reduce fragmentation, improve coordination, and succeed economically. We’re talking about how we change the model to support population health and value-based purchasing. How do we change the incentives? How do we change the team roles and systems of support? For the independent physicians, there’s a deeper and more challenging discussion. How do we handle clinical arrangements so that they can stay independent as long as they like, yet find a way to work together so that we can be more successful? We have a strategy based on priorities and on coordinating care in a way we haven’t been able to do in the past. One powerful strategy involves incentive pay associated with outcomes; other arrangements in certain specialty areas include bundled payment. Calendine: We are a 30-person private radiology group for a number of reasons—one being to remain relatively independent—but I understand the need for alignment. Several years ago, we started looking for an opportunity to align. We had built and grown three imaging centers in Nashville, Tennessee. We subsequently acquired four additional imaging centers. We had significant market share in outpatient imaging and were competing with some of the hospitals, and we realized that would not be a long-term solution for us. We were approached by the health system with the largest market share in our area. It wanted to enter into a joint venture with our existing centers; it contributed two centers, one in the suburbs and one in Nashville. It also contributed its outpatient volume and the name of its Nashville hospital. After two years of discussion (and large legal fees), we put together a joint venture for our outpatient imaging and all of its outpatient imaging. It has been in place for a year. I think the health system took a great and bold step, moving its outpatient imaging from a higher-cost, less-efficient, provider-based model to an outpatient model. It knew that it was going to get some decrease in reimbursement on the existing volume, but at the same time, it was buying into a large volume that it really didn’t have access to otherwise. We’re increasingly integrated with the hospitals and health system. We’ve been successful. The other health system in the area has kept outpatient imaging on its campuses (at a higher cost) and is not providing much in the way of significant competition for outpatient imaging; we’re continuing to see our market share grow. LaDouceur: I represent a for-profit corporation that develops new imaging centers and is involved (very heavily) in acquisitions. There seems to be a new model out there, with for-profit companies and hospitals coming together for partnerships. It presents an opportunity for two aggressive competitors to form an alliance in a structure whereby increased access for patients can be achieved in places where people live and work, but hospitals are not always present. Once you form these alliances, pricing for imaging can present challenges because payors are steering patients away from higher-priced hospital outpatient facilities right now. Should hospitals and partnerships accept lower outpatient pricing, betting that more volume will come to those centers? A hospital might take the risk, by decreasing its prices 20%, but not pick up the volume to compensate. It’s a strategy that can work, but it has to be examined very carefully. Gray: We’re hearing about a lot of struggle with the growth of accountable care, which is much faster than I would have predicted. The greatest risk for imaging is the shared-savings contract, which rewards providers for decreasing the overall cost of care. There are dozens of those taking shape around the country; in a year, there could be 200. We’re in a low-growth environment. What was thought of as a recession-oriented decline in volumes began in 2008 and 2009, but we’re not really seeing imaging volumes increase. We have been used to seeing high single-digit or low double-digit growth; I think those years are gone. Proval: We’re seeing providers attempt to align through acquisition. How prevalent is this in radiology? Is there an interest in acquiring radiology practices? Gray: I think not: Health systems have invested very heavily in acquiring physician practices—not just in primary care, but in high-revenue specialties as well. The typical sequence of events is that the health system makes the acquisition and then needs to subsidize the practice, often to the tune of a low six figures per physician. I don’t think that is sustainable. Health systems are going to deplete their cash reserves, and they’re going to think twice about acquiring radiology practices. Calendine: I think you have to find a way to align with a health system, whatever options there are in your market. As with all things in life, you only negotiate from a position of strength. You’re not going to get there with your hand out, so I think it’s unwise for radiology groups to continue to look for subsidies and medical directors’ fees. You’re inviting hospitals to look at you as a cost center. You’re setting yourself up for a short-term win but a long-term failure. Proval: Are you taking steps to build accountability? McGowan: Yes, and they aren’t just foundational steps. We’re trying to be just in time as things change, particularly on the contracting side. We’re working on cost management. We passed the price-point question, and now we’re beginning to ask how we’re going to become more valuable. We’re looking at the infrastructure for taking on more value-based purchasing, which includes the electronic health record and all the analytics necessary to support us, as well as some serious changes in episode-based care and a new business model for primary care. We’re also looking at partnerships. The big question, for health systems, is how big you have to be to bear risk. We’re looking at other partners and providers at the payor level so that we can keep all options open, in terms of scale. Some of our partners can provide actuarial services and population-health economic modeling; this is giving us amazing insight. We’re seeing more clearly where our opportunities are to improve care. Our radiology team has started a diagnostics group looking at ways to evolve its role from a production orientation to decision support. This is where radiologists can make a major contribution. Seeing and adapting to that role will be invaluable. Proval: How do you compete, as an imaging-center chain, in a market where it seems that payors and health systems are in the driver’s seat? Is consolidation resulting in unhealthy market forces? LaDouceur: When you have the predominant market share, that obviously gives you leverage. The difficulty is that payors can agree to a good pricing structure, but then steer patients away from your facility to one that offers a cheaper price, but a lower quality of service. Proval: Many health-policy experts believe that fee-for-service reimbursement promotes the overuse of medical services. Are you (or any of your payors) proposing gain-sharing arrangements in your market? Gray: There’s a ton of gain sharing. The challenge for radiologists is that it’s not a given that they will play a major role in lowering the cost of care. We’re still in the early stages; it’s certainly not impossible. There are a good number of progressive radiology groups around the country that can take the initiative to get a seat at the table for discussions of accountable care. McGowan: At least in our case, radiologists are not going to benefit from gain sharing. Over time, if radiologists demonstrate the value of managing unnecessary testing and making sure that imaging is done well, there could be a participant role for the radiologist. Proval: Do you have the tools needed to project and manage utilization so that you can become part of gain-sharing arrangements confidently? McGowan: Absolutely not: I don’t think anybody does. We’ve been trying to align ourselves with others on the top rung of getting ready for accountable-care organizations and bearing risks. What we can see is that there are things we can do right now. Those should help fund us, in terms of capitalizing the infrastructure for bearing risk. What we also recognize is that we’re going to need partners—and in our local marketplace, we definitely need a payor for a partner. Proval: Payors and employers are using incentives (such as smaller copayments) to steer patients to lower-cost providers. There are clearly winners and losers; are payors considering quality when they build preferred-provider networks, or is price the only consideration? LaDouceur: Payors assign a quality grade based on equipment, upgrades, hours of operation, radiologist subspecialization, and other criteria, but it’s not as difficult as it may appear to be qualified as a provider. This levels the playing field, in the eyes of the payor. Although comparisons should be about patient care, quality of equipment, and quality of radiologists, often, price is the real criterion. Imaging is becoming a commodity, and we can’t let that happen. We have to take the message directly to the consumer and the payor: There’s a difference in quality. Quality will win, in the end, but there’s a price that we’re going to pay. It’s a battle, but I think it’s one we can win with the quality message. Gray: There is a movement toward price transparency in the market. There are some companies where the entire business model is based on providing employers and their employees with more transparent pricing information. When you add the fact that a large proportion of the insured are now on high-deductible health plans (where they’re responsible for the first $3,000 to $8,000 spent), you’ll see a lot of individuals making the choice to go to lower out-of-pocket situations. Proval: On the inpatient side, are specific cost-containment benchmarks being set at the executive level or are practices being hit, across the board, with cost-containment goals? Gray: On the health-system level, executives realize that in the past, the industry has seen pendulum swings and cost pressures. That’s over: There’s no backswing on the pendulum anymore. Cost pressure is going to be more or less permanent. In my finance work, I’ve noticed some significant changes. There’s more top-down benchmark setting and more holding operational managers accountable for costs. It’s taking a while for this to reach imaging, but I think you’ll get it. McGowan: Value is not only cost management, but making sure utilization is appropriate. We’re really pushing appropriateness and getting value from the imaging side, not just the cost side. Proval: What do IHNs want from radiology? Gray: One factor is appropriateness. There is a long-term role for decision support. You can think about overuse, to be sure, but also misuse and underuse. There are hundreds of thousands of imaging referrals that are never used. There are probably some modalities that are underused. To say that decision support reduces utilization is missing the point. I don’t think we want to eliminate utilization; we want the correct mix, timing, and high impact of imaging services. With time, there will be more information on which scans should happen when and on how to prevent more costly downstream episodes. You’re not going to win if your unit cost is lower. This is not a viable long-term strategy. Adding costs—as long as you can demonstrate a very high quality of practice—is fine. There’s a hunger to work with radiologists who understand that it’s not a volume-driven operation anymore. Just communicating commitment to mapping out disease states and understanding where the critical junctures are will probably go a long way, in many cases. Proval: What role can radiology play in reducing health-care costs? McGowan: Technology continues to offer us new opportunities to improve turnaround time for certain imaging procedures. The other roles are in appropriate utilization and in getting involved with organizations profiling patient experiences, at least at the episode-of-care level. The misuse, overuse, and underuse of imaging can be unbelievable. There’s a lot of opportunity to manage that inappropriate use. Work to engage yourself not only with providers and physicians, but with health systems. Be part of decision support and analytics at critical points where you can influence appropriateness protocols or retrospective reviews. Get outside the reading room and into a more integrated solution. The magic is in decision support, taking an active leadership role, and looking at the episode of care, if not the population experience. Proval: What part might radiology have in managing population health? Calendine: We’re still going to be largely a referral-based specialty where, to some extent, this is somewhat out of our control, but we need to be involved in decision support. At times, we have failed to emphasize some of the prior wins (such as replacing more invasive procedures) and the costs we have already saved. There hasn’t been a physician trained in the past 15 or 20 years who hasn’t largely been dependent on radiology findings to manage patients, so we do need to be involved in decision support and involved more clinically (although our clinical involvement has increased in the past 10 years). Radiologists are consulted more routinely on managing patients, so we are taking on a more active role. Proval: In your market, how is quality in radiology being defined? LaDouceur: We sat down with our hospital partner and our radiologists and had a strategic-planning session to identify what we do well. What is our niche? In our market, we identify women’s imaging as something we do exceptionally well. We also got the radiologists to create a sense of their own identity for quality messaging, in terms of identifying their own subspecialties, their broad coverage, their backgrounds, and their areas of expertise. Those two strategies deflected the price definition and created a quality definition that we can control. Proval: What is the ideal role of radiology in the IHN? McGowan: It’s working with other specialists to help promote earlier diagnosis, more appropriate use of imaging, and good decision support. LaDouceur: Radiology is the first element of diagnosis, in many cases. Radiologists are here to stay; we’ve got some battles to fight, but we’ve got to support ourselves. We must get ourselves out there and say that we are key in the IHN and the continuum of care—and what that means to patients, throughout their lives. Gray: The role of radiology is to take a balanced and somewhat frugal approach to high-quality diagnostics. Collaborate with the health system and other clinical partners to manage not just the imaging component, but the total cost of care. Over the next decade, try to configure the knowledge base—because we know so little about how imaging fits into the continuum. There’s a major role to play, not just in academic settings, but for community providers committed to analyzing the process and establishing which excellent practice patterns should apply. Calendine: Look carefully at your local market. It’s going to be different for everybody, but try to align with one of the leading health systems there. Find your place at the table, because you’re not going to have a place if you don’t. We’ve been fortunate in that respect, but we don’t take this for granted. We continue to work actively to be a good partner. To some extent, you have to change the radiology culture (which is not appealing to hospital administrators). We need to have more collaborative arrangements with health systems. Kauffman-Pickelle: This has been a fascinating discussion, emblematic of the cultural transformation that we all face. Wherever you sit in the process, I think it’s undeniable that moving from this isolated, production-orientated mentality to one where you’re really involved in the IHN speaks volumes about the mandate to develop relationships that will offset the dismissal of radiology’s relevance. I have heard, from clinical colleagues in other specialties, that when we talk about gain sharing, radiology is certainly irrelevant to the process, whether on the risk side or the gain side. Why are we irrelevant? Maybe we weren’t in the room at the right time, maybe we didn’t have that right relationship, or maybe we have not really told our story and tooted our horn about radiology’s value proposition. I am encouraged by the fact that there is a lot of underutilization out there. We’ve got quite a story to tell, especially in the areas of utilization and participation in IHNs, as well as in outreach and in branding ourselves—delivering that message so that our relationships are truly developed along lines of mutual understanding.