The Mission to Optimize Hospital Radiology

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 - Mission

Under pressure to change, hospital radiology is entering a period of innovation.

Nowhere in radiology has the pain of the transition from volume to value been felt more immediately than in the hospital setting. Here, value-based payment is further along than in the physician practice setting.

Penalties for 30-day readmissions have been imposed on hospitals for a few years now, and failure to achieve appropriate scores on patient satisfaction surveys now results in forfeited reimbursements. In just a year and a half, the mandate to implement radiology decision support will encourage hospitals to contain rather than grow medical imaging procedure volumes.

One bright spot has been the more favorable reimbursement for hospital-based outpatient imaging services. Now that too is under pressure as hospitals seek to compete with freestanding outpatient imaging centers that are more attractive to consumers with high deductible insurance plans.

Radiology Business Journal spoke with radiology leaders at five different health systems to understand how they are optimizing radiology to lower costs and improve care quality. Standardizing care protocols, centralizing operations and creating physician–administrator “dyads” to drive change are key strategies.

Success through standardization

Deanna Welch, system director of imaging services for Intermountain Healthcare, the 22-hospital integrated system based in Salt Lake City, believes the future of hospital-based radiology lies in system-wide standardization. That’s what it will take, she says, to lower costs, increase efficiency and put patients first under payment models rewarding value over volume.

Because Intermountain has succeeded in integrating vertically, forming its own health plan, SelectHealth, in the mid-1980s, it has had time to prepare for life under capitated payment models versus fading fee-for-service. Welch says the system is in a mature state of standardization on clinical protocols for various diagnoses—as well as for technologies, including imaging categories such as PACS—but there’s still work to be done cutting out some siloed variations.

The endgame is taking the accountable-care concept and building on it. “We’re calling it ‘shared accountability,’ because we feel that the patient shares some responsibility” in seeing to his or her own health, Welch explains. “We are talking about population-based healthcare and keeping people healthy.”

Under value-based reimbursement, fewer visits would translate to lower costs. Intermountain’s imaging caseload is currently 77% outpatient and 23% inpatient, with the outpatient side steadily on the rise.

“Of course, you don’t want to perform exams that have no utility and provide no value,” Welch says. “This is where decision support can come in. But it needs to be based on evidence, not just used as a regulatory compliance tool.” Welch says Intermountain Healthcare recently had an opportunity to host a “Protecting Access to Medicare Act” workshop with CMS in Washington, where attendees offered their thoughts on evidence-based implementation of decision support.

The U.S. healthcare system changes slowly, even if at times dramatically, so Intermountain, like other health systems, must straddle two worlds until the value-based ideal is realized. For this reason,  Welch has come to view radiology as both a cost center and a profit center.

“You have to be looking at lowering costs just to maintain viability,” she says. “On the other hand, I don’t want to leave any fee-for-service dollars on the table”—meaning money flowing in from negotiated rates with private payors.

Welch includes among her division’s recent business achievements the integration of imaging scheduling and patient account services in order to streamline patient scheduling, registration and financial review processes into a one-call conversation with the patient. The order of the day now is fewer calls, sharper service and greater efficiency. “We feel this has helped us get more follow-up imaging business,” Welch says.

Asked about pricing, Welch says it’s a standardization struggle, as Intermountain’s hospitals all have different prices set by varying costs. “If one hospital has three new MRI machines and the depreciation is going to be higher, we take that into consideration in pricing,” she says. “Our finance department has been working with us to figure out where our pricing needs to be.”

Then there’s the matter of transparency in a consumer-centric world demanding