Shifting radiology and other services out of hospitals could save upward of $147B, survey finds

Radiologists and other physicians agree: Shifting care out of hospitals and into less costly care settings makes economic sense, according to new survey data published Wednesday.

Imaging and other healthcare services are moving rapidly away from these traditional sites of care, which can be costly and more difficult to access. The business community has taken notice, with the number of private equity and venture capital deals focused on alternative care sites doubling between 2010 and 2021, experts wrote in JAMA Network Open [1].

Hospitals have fought this push, but health policy experts sought to see how radiologists and other physicians view it. Nikhil R. Sahni, MBA, conducted a survey of 1,069 physicians and other providers in 2021 and analyzed historical claims data from 2019 for their analysis. They found that about 10.3 percentage points of commercial and 10.9 percentage points of Medicare volume currently taking place in hospital-based settings could shift to alternative care sites.

With today’s technology, this change would not compromise clinical outcomes and could reduce overall healthcare consumption spending by between $113.8 billion (3.2%) to $147.7 billion (4.1%) in 2019 dollars each year.

“These findings suggest that while a substantial net savings opportunity may remain from site-of-care shifts, ongoing alignment among organizations, clinicians, and policymakers is needed to ensure the best outcomes for patients,” Sahni, with Department of Economics at Harvard University, and co-authors wrote Aug. 14.

About 794 (or 74%) of survey respondents were physicians, including 63 radiologists (8%). The rest came from other midlevel professional such as imaging technologists, physician assistants and nurse practitioners. An expert panel of physicians reviewed more than 5,000 diagnostic and procedural codes, whittling the list down to 312 distinct care activities. Survey respondents were provided with the 2019 claims-based distribution across sites of care for each activity. They were then asked, “based on your clinical judgment, what portion of [care activity] could safely occur in each of the following sites of care, without compromising clinical outcomes?”

For commercial health plan volume, emergency medicine visits would see the lowest volume shift (with a current state of 23.5% in hospital-based settings shifting to 16.6%), while procedures would see the greatest change (with a current state of 55.6% decreasing to 39.9%). In Medicare settings, EM visits also would see the lowest volume shift (25.1% vs. 18%). Ancillary services such as imaging and lab work would see the greatest volume shift (46.8% vs. 30.5%). Broken down by medical specialty physiatry/rehab medicine had the greatest potential followed by radiology at No. 2. In commercial settings the current state for imaging is 67.4% in hospital-based settings shifting to 42.5%, a 25 percentage-point change. For Medicare, the current state has about 70% of radiology services occurring in hospitals, shifting to 46.6% or a 23.4 percentage-point change.

However, the study’s authors cautioned that barriers may prevent the healthcare systems from realizing these savings. Shifts from hospital-based settings would “meaningfully” decrease inpatient revenue, posing challenges for hospital systems. And these organizations have made large capital investments in hospital-based settings with little incentive to reduce revenue associated with such expenditures. Capacity also could be an issue. For instance, commercial and Medicare volume in ambulatory surgery centers could increase by more than 85%, given the study’s estimates, necessitating investment in facilities to absorb this shift.

“There are reasons to believe these barriers can be overcome. The COVID-19 pandemic and resulting public health emergency and legislation enacted by Congress accelerated regulatory changes that have increased the use of alternative sites,” the authors noted. “Other changes, such as site-neutral payments, the reduction of procedures on Medicare’s ‘inpatient only’ list, and the expansion of services included on the ASC-covered payable list under Medicare, have also contributed to the increasing use of alternative sites,” they added later.

In radiology, outpatient imaging center operators already have made a big push to move imaging out of costly hospital sites to other freestanding options. Payers have taken notice, enacting policies that require certain imaging exams to be performed outside of a hospital.

You can read more about the results—including study limitations and a corresponding editorial [2]—at the links below.