With the passage of the Patient Protection and Affordable Care Act (PPACA), the health-care community is preparing for a tidal shift in how all providers are expected to perform. Hospitals and physicians increasingly will be held more accountable for ensuring that the key pillars of health-care reform are satisfied: improving the quality and accessibility of health-care services while lowering costs.
Among many other market factors, new payment mechanisms and regulations established by the PPACA place providers of advanced diagnostic-imaging services squarely in the crosshairs, as lawmakers have repeatedly pointed fingers at the radiology community as a major contributor to the rising costs of health care (especially over the past decade). Members of the radiology community must now accept a wholly new operating environment to come, and must adopt new strategies not only to prosper, but also merely to survive.
The greatest efforts to curb the rising costs and utilization of imaging services have been aimed where it hurts most: our wallets. Since the passage of the DRA, new regulations have chipped away at technical-component reimbursement, and they also have made mechanisms to ensure more appropriate utilization of advanced imaging services commonplace, primarily via radiology benefit managers and precertification programs.
Many of these regulatory and market forces have resulted (and continue to result) in a softening of annual growth rates for outpatient imaging services. In previous years, advanced modalities such as CT, MRI, and PET grew at double-digit rates, but the outpatient-market projections of The Advisory Board Company (Washington, DC) suggest much slower—albeit positive—growth rates for these modalities: 3% to 5% annually. Slower growth rates, coupled with lower reimbursement rates expected in the future, portend decreased profitability for outpatient imaging services (and ultimately, reduced access to capital to fund new technological and strategic investments).
Looking to the future, radiology providers will need to be ever vigilant and to place additional scrutiny on how limited capital dollars are allocated, each year, toward new imaging-technology investments. In short, the cost of getting it wrong will be significantly greater than in years past.
Key to the effectiveness of health-care reform is the establishment of new payment models designed to transform the manner in which providers are reimbursed, rewarding the quality (rather than the quantity) of care. These new models—including bundled payments, episode-of-care payments, and shared-savings programs, among many other provisions of the PPACA that directly target radiology utilization and reimbursement (Table 1)—will have a profound impact on funding appropriations for capital equipment and on the rationale behind acquiring premium, versus workhorse, technology.
Perhaps the most groundbreaking of the new accountable-care payment models and regulations affecting future imaging-technology decisions is the shared-savings model. Set forth as a voluntary Medicare program in 2012, accountable-care organizations (ACOs) represent a collection of providers financially and/or legally aligned in such a manner as to permit the sharing of savings that result from besting a predetermined spending benchmark for a given patient population.
ACOs will require improved coordination among providers, with added incentives to minimize unnecessary services in order to meet certain cost thresholds. According to The Advisory Board Company’s Imaging Performance Partnership research, radiology will be greatly affected by accountable-care models on several fronts. These will include:
- • greater involvement of radiologists, as consultants and educators, in determining appropriate treatment strategies and educating physicians on order appropriateness;
- • downward pressure on traditional demand drivers, with ordering physicians taking on greater responsibility for keeping costs low and ensuring order appropriateness;
- • increased relevance of outpatient imaging centers, due to lower costs and greater access; and
- • emphasis on the need for lower-cost, capacity-enhancing technology, as opposed to premium equipment for only niche applications and/or patient populations.
Right now, it is challenging to determine exactly how greatly imaging demand—and ultimately, profits—will be affected by accountable-care models. Nonetheless, radiology providers