Sharks in the Case Pool: Teleradiology, the Practice, and the Purveyor

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Wilson Wong, MD, was there when teleradiology took off, almost 15 years ago. Back then, there was a radiologist shortage, and Wong saw a way to increase the efficiency of coverage and bring some relief to other radiologists who were laboring (as he was) under the constant burden of on-call night work.

In 1997, Wong started a company called Teleradiology Diagnostic Service (TDS), Inc, to serve the Southern California market; soon, he and three or four radiologists were issuing nighttime preliminary reports for hospital and radiology-group clients, mostly for emergency-department work. “I started TDS because I was tired of taking call,” Wong says. “Imagine working all night, and then you have to work the next day—another full-time job.”

It was more than a matter of ending night work for clients, though. It was a matter of streamlining after-hours reading, too. “If we could centralize, one radiologist could take more calls,” Wong recalls. Under the old on-call system, a radiologist at one hospital might spend half the night sitting idle. Wong says, “With the interruptions and the ups and downs, there were a lot of dead periods. The radiologist might sit there for 15 or 20 minutes.”

With TDS, a few radiologists soon were reading for 80 West Coast hospitals at night. Wong says, “There was no competition; everybody was clamoring to be a customer of ours.” In the beginning, TDS used film digitizers to create electronic images at the hospitals and then transported them by telephone to radiologists at a centralized reading station.

TDS fashioned its own software for its RIS to create reports. It followed the technology curve upward until its image-transport and reporting systems were server based. “We became one of the largest (if not the largest) California-based teleradiology companies,” Wong says. He ran TDS for nine years; then, he sold the company to a major, national teleradiology company. He says. “I have done extremely well. People think I was smart to sell. The truth is that I was lucky.”

He was lucky because the rosy teleradiology world that Wong helped create has, some critics say, turned sullen and predatory. According to a 2011 article by Levin and Rao,1 more than 50% of US radiology practices are now outsourcing some of their work to teleradiology providers.

Fears Come True

According to Levin and Rao,¹ this escalating adoption of teleradiology has created many ill effects for the imaging industry. Among them are the commoditization of imaging interpretations, the lowering of fees per interpretation, and the vulnerability of radiology groups’ existing hospital contracts to predation by teleradiology providers.

Wong says that it is all true; the worst fears of teleradiology opponents have been realized—but it’s not all bad, he adds. While Levin and Rao¹ warn that teleradiology might lower the quality of image interpretation, Wong argues that the opposite has been the case, at least in the late-night emergency-department venues where most teleradiology takes place.

Teleradiologists have become experts in emergency-care imaging—so much so that Wong expects them, one day, to have a subspecialty society of their own. Competition from teleradiologists has caused all radiologists to raise their standards, he argues. “Several sites have done reviews of accuracy and found that teleradiology is as good as the local radiology groups, if not better,” Wong says. “It’s the opposite of what the ACR® has predicted. It’s ironic.”

Wong agrees that competition from teleradiologists has been at least one force in cutting the price of interpretations. “When it started, the price was as high as $50 per case,” he says, “and now, the average price is below $30 per case.”

Some of that might be due to generally lower reimbursements, Wong says. He adds that the downward pressure on reimbursements isn’t going away. Where once there was a radiologist shortage, today’s young radiology graduates sometimes can’t find jobs. He says, “The demand slows, and the supply comes up; the profit margin is going to be a lot less.”

Since selling his teleradiology company, Wong has gone back to being a radiologist. He is now a partner in Arcadia Radiology Medical Group in California. “My subspecialty is body imaging; I do some interventional work,” he says. “I don’t do any teleradiology, but I still read for them once in a while.”

He says that there are so many teleradiology providers in the market now that potential customers won’t even