The Current State of Radiology Administration
Penny Olivi, MBA, CRA, FAHRA, RT, has more than one finger on the pulse of radiology administration in this economic downturn. In addition to serving as president of the AHRA—The Association of Medical Imaging Management, she manages both the radiology department at the University of Maryland Medical Center, Baltimore, and the department’s physician practice at the University of Maryland School of Medicine; together, these generate more than 600,000 imaging procedures per year.
Penny Olivi, MBA, CRA, FAHRA, RTA former radiologic technologist who went on to acquire a master’s degree in business administration, Olivi likes to say that she graduated from x-ray school before the CT scanner was invented. She manages approximately 250 hospital employees and handles the needs of 50 radiologists, 20 fellows, and 36 residents. At the hospital, initiatives of which she is proud include the installation of PET/CT and 3T MRI, along with a current project to upgrade all six interventional rooms to flat-panel technology. On the physician-practice side, she has assisted in successfully extending subspecialty coverage to remote hospital sites. Olivi brings 12 years of experience in community-hospital radiology leadership to the University of Maryland, where she has presided for seven years. “I come from a radiology background and a community-hospital background, so I very much care about hospital operations,” she explains. “There are people who come from the business side who may care more about the radiology-practice side. For me, this job is the perfect alignment of all the misaligned incentives. In the end, what I care about is the radiology patient, and however I come at it, through the hospital or the practice, it makes sense to me.” RBJ: What is the requisite skill set for someone doing your job, and how has that changed in recent years? Olivi: My generation of administrators came up through a clinical background. We demonstrated proficiency there, and we went on to get advanced degrees. While that model might still exist in the future, I believe that radiology leaders can be successful with strong business skills, if they take the time to understand the clinical environment. I want to prove my competence with both my experience and my education, so I always will state publicly that a clinical background coupled with a business background is the right mix. What I am observing, though, is that there are people who are more skilled in the science of management, and actually having the specific billing/coding expertise or specific clinical expertise may be less important to them. Finding the right people with those skills will become most important. I just hired an associate administrator on the practice side, and she has master’s degrees in nursing and business administration. She comes from a diverse nursing background, with some procedural-based experience through the catheterization laboratory and some research experience, and she has hit the ground running, from a clinical perspective. Now, I am starting to wonder whether it needs to be a radiology clinical perspective. Could it be any clinical perspective? I think we are going to see some significant changes in the backgrounds of our emerging leaders. RBJ: How has the economic downturn affected your inpatient and outpatient radiology services? Have you seen a decline in admissions and elective procedures? Have you experienced pressure to cut costs or delay purchases? What impact has this had on long-term strategy? Olivi: We have seen declines of that kind, and have experienced financial pressures. Here’s an interesting thing we are seeing at our medical center: There seems to be no rhyme or reason as to when we are busy or not busy. There is no trend. We have a month where we are very busy, and then we have a month when we are not. Historically, October is one of our busiest months, but last October was one of our worst. March has always been a huge month for us; it was not, but April was huge. We are still experiencing tremendous stress on our emergency department. We believe that there are people who truly may be using the emergency department rather than their primary care physicians, but we don’t have a lot of evidence of that. It’s just conjecture. The other thing I am hearing a lot about is that people are delaying their elective procedures, mostly because if they have a job and insurance, they are worried about being away from work. We are hearing this from practices that do elective surgery that might require that people be out of work for three to six weeks. These people are saying, “I’m worried that if they see they can do without me for six weeks, they may think they can do without me forever.” That is something I have never heard before; patients are definitely worried. We (along with everyone else) are under tremendous pressure to cut costs and delay purchases. It’s affecting our long-term strategy. I read an article quoting some hospital CEOs who said they are not worried about long-term strategy right now; they are just trying to get through each month. That is the balance we are trying to achieve. We are trying not to throw our long-term goals out the window, but we are constantly reconnoitering to match what we are doing with what is going to be funded. One of the things we’ve done is put less emphasis on our new initiatives and projects and more on process improvement. Perhaps we should view this as a time when there might not be money for new buildings, new departments, and huge renovations, but it might be the time to do what we do in a more efficient way. The timing of the changes in quality curriculum in the resident program has been fortuitous. We have created a quality initiative that involves all the faculty and residents, as well as the department management and staff. The program meets the residency requirements, and it creates a framework for a departmental quality initiative. It has been a most exciting change, with great future potential. Here’s the other interesting thing, from an economic perspective. I have no openings, and I have no agency technologists. People are not leaving. One of my technologists said, “Even if another place is hiring, I don’t want to be the last to be hired in that hospital in case there is a downsizing.” It’s a whole different perspective. It may allow us to have some stability in our work force, maybe asking for a little more staff input into improving processes. That may be the silver lining of this difficult economic situation. RBJ: What about that cloud on the horizon? What impact are payor requirements for preauthorization having on your revenue stream, and how are you handling those requirements? Olivi: The radiology benefit management (RBM) movement could not have come at a worse time. Everyone is struggling with the added cost of what we have to do now to meet all of the precertification requirements. I am listening to the health care debate on how we can cut costs, and I look at the expense of our front-end practice, and I think there have to be millions of dollars that could be saved across this country if there was a single payor. I don’t know what that system will look like, but what I see with the RBMs, and what scares me about reform, is that every insurer creates a different system for us to have to work through in terms of precertifications and how we deal with them. We have to maintain this huge body of knowledge; we need people up front making things right, and patients have to be informed consumers. Wouldn’t it just be so much simpler if all of that were gone and you had a card, and there were just one way in: one registration, and one way that providers get paid? In the health care reform debate, I don’t hear anything about reforming the for-profit insurance companies. I only hear about reforming the situation around the uninsured, which we must do, and about decreasing the cost of health care. Talk about misaligned incentives: If we have these for-profit insurers and not-for-profit providers trying to eke out a living, there’s got to be a clash there. When I think about reform, I think: Let’s start there. Let’s say to the insurers, “You need to be more nonprofit minded. It’s not about your shareholders; it’s about your patients.” RBJ: What are the key metrics affecting the financial viability of your inpatient and outpatient radiology services, and how are you tracking them? How are employees held accountable? Olivi: The core business of radiology is getting a report to the referring physician, so I believe that is the core activity that you have to measure, whether that involves a written report, a report through the hospital information system (HIS), or calling in a critical result. You really have to measure how well you are succeeding at that core business. When you measure the core business of getting a report to the referring physician, all of the other performance metrics required become clear. How easy is it for the outpatient to get into my facility? How quickly am I responding to the order for the inpatient? How long does the patient wait in my department after arriving there? Suddenly, every step of the process, from when an order is an idea in a referring physician’s head until you get that report back to him or her, becomes key. Financial viability becomes your ability to stay relevant to your referring physician. You should be providing a service in a timely fashion, both getting the patient in and getting the report back to the referrer, so that what we offer (the image and the report) becomes vital in asking the clinical questions and going to the next level of care. All of the other financial measures, such as your cost per unit, are very important. In inpatient and outpatient worlds, revenue is important. It is hard to measure in an inpatient world, with the prospective payment system. If you are in an outpatient world, you can measure revenue, but because we are so highly regulated, some of our revenue is out of our control. We can talk about contracting and maximizing what is paid for what you do, but if you focus on cost and can say, “I delivered my core business in a more cost-effective manner today than I did a year ago,” that is a success. RBJ: What advice would you give to a radiology administrator who wanted to create the culture of excellence and innovation that is at work at the University of Maryland? Olivi: You have to be clear in defining what you think is excellence. You have to understand, in radiology, that we have many customers. There isn’t just one customer who needs to be pleased; we provide a service to every clinical department in the hospital. It’s important to have a sense of what each service line needs, and to understand that you touch every patient in the place. Almost every inpatient comes through the department, and what you do is critical to every other standard that the hospital has: length of stay, admissions, discharges, emergency-department throughput, infection control, and hand hygiene. All of those things have an impact on your department, so the culture of excellence involves understanding the importance of what we bring to the clinical-care team, along with being informed enough to address what patients need when they are in your care so that you can continue to provide the excellence that your whole institution defines. RBJ: What role is the radiology department playing in the institution’s quality-improvement initiatives? Where is the low-hanging fruit, and what are the long-term challenges? Olivi: The low-hanging fruit is found in maximizing your equipment utilization and in maximizing your staff, figuring out what they do. In choosing quality-improvement projects, we say, “Every day, you push the rock up the hill. Let’s pick one thing that frustrates you, and let’s try to fix that.” That’s a great way to approach quality from a low-hanging–fruit perspective. These people do their work every day; they know that what they are doing is hard. If there is a way to fix that, you get a lot of bang for that buck. You make them happier, you gain efficiencies, and they start to buy into this whole idea that process improvement can be small cycles of change. We don’t have to fix the world. From a hospital perspective, focusing on the turnaround time is the lowest-hanging fruit. Immediately, you increase your relevance to the clinicians, to the other services, and to physicians. You improve the throughput, whether that’s in the emergency department, in your bed turnarounds, or in an increased outpatient volume, and all of that is good. From the practice side, most of the billing requires the completed documentation, or report, so the faster that report is accurately created, the more quickly you can start the billing process. The long-term challenge, with any quality initiative, is maintaining the improvement and continuing to maximize it. Sometimes we implement an improvement and, as they say, people don’t do what is expected; they do what is inspected. If you stop watching it, it drifts back. I think the challenge is to make those cultural changes and those practice changes that stick. Turnaround time is both the low-hanging fruit and the long-term challenge. The other long-term challenge is the electronic medical record. I think we need this, and we need to figure out how to achieve beautiful integration with the HIS, the RIS, the PACS, and everything else. RBJ: Is the role of radiology administrator in an academic institution vastly different from that role a nonacademic institution? If so, how? Olivi: For me, it has been very different. In my experience in a community setting, I was responsible solely for the hospital operations. Now, my role includes responsibility for the hospital and the practice. I also find that academic radiologists are different from community radiologists. One of them explained it to me: “I am subspecialized, so I have the time to be extremely curious about one body system or one body part.” I found that interesting, and I think about that a lot. That is what I have come to admire and respect: The knowledge base around that subspecialization is huge. For me, it enhances what I do. When I go to the trauma radiologists and talk about capital equipment, they are so focused on the throughput of that patient and on early imaging to get an answer for the trauma surgeon. Then, when I talk about PET with the nuclear physicians, they are so focused on what that means and how that integrates into our cancer program. I can go through every body system and say the same. It’s harder, in that radiologist coverage is so difficult when you subspecialize. It’s a lot easier to have generalists everywhere. This also ties back to your technologists, although from the hospital side, we are divided by modality, not by body part. In academic medicine, the MRI technologists are asked to do so much more because of our subspecialty radiologists: in the protocols, in what they are expected to recognize in the images, and in what they are expected to feed back to the radiologists to provide the right level of support and communication. The same applies to our CT technologists. I think it raises the bar for everyone. The other thing that I absolutely love is that there is, at least in our institution, this whole spirit and culture of education, and I think it comes from having residents. There is a culture of teaching. I couldn’t work somewhere where I couldn’t learn anymore. That’s something that academic medicine provides me. I love that. RBJ: What is the optimal form of communications with the department chair? How do you ensure that you move forward in concert? Olivi: Because I have both roles, I think I’ve learned that the role that clinical administrators have with the chairs (of any departments) is helping them to run their businesses. That is a very important role. I understand that my role in the department is to provide anyone, from technologists to nurses to radiologists, with what they need to get their jobs done. I think less about how to run the department and more about how I give people who know how to provide excellent clinical care within the department what they need to accomplish that task. We have regular meetings. I have a standing meeting with just Reuben Mezrich, MD, PhD, twice a week. I meet with him formally a few times a week, so I have a lot of contact with our chair. Our offices are steps apart, he is wonderful and open, and I can rap on his door and bother him all day long. I appreciate his insight and advice, and I also appreciate the time he gives me. He challenges me; he teaches me. I know that we both want this department to be successful. I believe that we are aligned. We don’t always agree on the process, but we do always agree on the outcome needed. RBJ: It has been said that several profitable hospital services (including radiology) subsidize much of the less-profitable care that is administered by hospitals. Is that a blessing or a curse, when considering how this affects your role in the organization? Olivi: I think it’s a blessing, and I think we need to remember that it is a blessing. We need to remember that medicine exists in a perverse economy. There’s a person who wants the service and a person who provides the service, yet a third person pays for the service, so we start out with a perverse economic situation. It’s not Wal-Mart. I always joke about that: Imagine walking into Wal-Mart, picking up a box of Tide, and saying, “This is $5.63, but I’ll give you $2.52, and I’ll pay you in three months. I’ll go home and use up the whole thing, and then I’ll think about whether I want to send you the money.” We have this perverse system that would not work in any other industry. I think that you just have to accept it: It is what it is. There are going to be pockets of profitability in a hospital, and they are going to subsidize the pockets that are not profitable. I think we have to remember that this is why we are in this profession, and that is where your clinical background helps. I do this because radiology needs to subsidize the community psychiatric-outreach program. We need to do that because that program is not going to exist on its own. That it is a vital part of what we do for the community, and a vital part of what we do for the good of all people. You have to put aside some of the debits and credits of the business side of it and say, “I am able to contribute to the greater good.” By the same token, it is a good idea to remind your CEO and your CFO, when you are asking for big hunks of money for new equipment, that in fact, you do a good job, you run a good shop, and if they give you this equipment, you’ll continue to subsidize the bottom line. I’m happy to point that out to them.