The advent of value-based reimbursement has tightened the purse strings on the clinical services income that academic medical centers traditionally rely on. It will become increasingly important for academic hospitals to develop a 21st century funds flow model, and radiology departments need to know where they fit into the institutional mission—both now and in the future.
According to an article published in the Journal of the American College of Radiology, careful planning and self-evaluation will help academic radiology departments develop funding models that allow them to flourish in the era of value-based care.
“Academic centers haven’t had to be very efficient,” said lead author and assistant professor of radiology at the University of Virginia Jason Itri, MD, in an interview with Radiology Business. “As the economy turned down and reimbursement started getting crowded a decade ago, we saw the money getting squeezed out.”
An academic department’s clinical services have historically subsidized the unprofitable research and education wings, but there’s no consensus model to align funds flow across the alphabet soup of organizations, corporations and boards that make up a large academic medical center. According to Itri, a radiology department can help by finding out where it stands.
“Ask important questions like what role do you play, what role do you play in the future, where can you provide value—especially for radiology which is a support service that broaches all departments,” he said. “A lot of this is local, what’s important at one academic radiology department may not be important at the next one.”
Looking at what your competitors are doing or performing a SWOT (strengths, weaknesses, opportunities, threats) analysis are good examples of strategic planning, according to Itri. In addition, comparing yourself to nationally benchmarked data—such as the American College of Radiology National Radiology Data Registry—can identify strengths and weaknesses.
“I think what you’re going to find—especially at a mid-tier research institution—is that research funding is dwindling a little bit so they’ll try a more clustered approach,” said Itri. “They might say ‘We have resources for research on traumatic brain injury, let’s focus on that.’ That can affect recruiting, too.”
Other cues will come from institutional leaders such as the CEO or dean, who may give directives on local measures such as academic productivity, grant funding or turnaround times, to name a few. In general, cultivating relationships is quite important to radiology departments because of their reliance on referrals and hospital resources.
“As an example, it is difficult for an interventional radiology practice to be efficient if they are not provided adequate space in the hospital for holding bays and transportation services are limited,” wrote Itri et al. “You have to have good relationships or you’re going to see leakage—you’re going to see those referrals go outside the academic medical center,” he added.
While Itri is now at the University of Virginia, he led a successful implementation of this model at the University of Cincinnati, as vice chair of operations.
“With the transition to quality-based reimbursement, every academic medical center is trying to build up their quality infrastructure for continuous improvement,” he said. “What we did at the University of Cincinnati is exactly that:We came up with five strategies for the next 3 to 5 years, and those gave us a roadmap so we could determine what to focus our resources on.”