The business of medicine is in the throes of tectonic change, with profound implications for the way physicians practice medicine. From pay for performance to bundled payments to other new models of financial risk-sharing—not to mention falling reimbursement, rising regulation and transparency on pricing and quality—radiology has all it can handle just to maintain its footing. Who will still be standing when the shaking stops? Radiology Business Journal spoke with leaders of five practice models to talk about relative strengths, potential weaknesses—and how they are preparing for the future.
The academic medical center: JVs and readiness
William Bradley, MD, PhD, has seen the future of academic radiology and it is patient care. Not that medical schools and their affiliated hospitals were ever not about patient care, but, says the chief of radiology at UC San Diego, Calif., the balance between research and teaching on the one side and clinical work on the other has been tilting toward the latter—at least as measured in focus and emphasis.
It’s important to understand, however, that the shift has developed not in spite of academic activities but because of them, Bradley emphasizes. “My marching orders from the dean who hired me out of private practice 12 years ago were to take us from number 39 in National Institutes of Health (NIH) funding to the top 10,” he explains. The department hit that goal about four years ago, along the way expanding the department from fewer than 10 researchers to more than 50—and from 30 or so radiologists to nearly double that number. “Hiring all those researchers has paid off,” he adds, “and paid off in many ways.”
The ways include not only improving patient care but also advancing it, Bradley says. He gives as an example a new imaging technique pioneered by UC San Diego’s Anders Dale, PhD, the noted neuroscientist and radiology professor. Dale has developed what he calls restriction spectrum imaging (RSI) to localize and biopsy tumors in the prostate with great precision, greatly reducing pain from multiple blind biopsies while also cutting treatment and recovery times.
“This is one of the things we’re very excited about right now around here,” Bradley says, because it shows that, throughout the department, “it’s not just about being in the top 10 in NIH research—it’s about helping patients. This has been a big move for us, and obviously it’s going to be very good for everybody.”
Having multiple revenue streams provides academic medical entities with a more stable financial footing in the healthcare-provider universe, enabling scale in business growth and clinical innovation. Radiology practices under the academic umbrella, however, are not immune to the same forces bearing down on all practice models across all specialties, from still-shrinking reimbursement to pay-for-performance pressures to increasing regulatory oversight.
Moving forward, UC San Diego Radiology will need to come up with enterprising ways to stay strong and get stronger, Bradley says. “This is the first time we’re working with a magnet that’s not owned by the medical center,” he says of a pre-owned 3T MRI unit that UCSD acquired for research. “The dean of the medical school, the head of neuroscience and I [went three ways] on buying what we’re calling a translational magnet. This is a joint venture within the system.” As such, the cost sharing represents a new approach to business for UCSD San Diego.
“What I’m seeing is an integration of what were classically two parallel paths, school of medicine and medical center. We’re now becoming, much more, one single entity,” Bradley says. “We’re doing this partly to save money—there’s no way you can run an academic medical center on Medicare rates.”
And yet, like everyone else, they have to find a way. UCSD is working on, for example, coming up with new compensation models for radiologists that stress RVU bonuses over salaries. Meanwhile, as capitated payments come to coexist with fee-for-service over the next few years, the medical center may form “pods of expertise” in which, as Bradley puts it, “head and neck radiologists will hang out with the head and neck surgeons. There won’t be one big reading room like we’ve always had; radiologists will work closer to where the clinical activity is. Then these pods will coalesce to form new ACOs.”
Another possibility under consideration is combining the five University of California medical centers into one big ACO covering the