When Atlanta-based The Radiology Group was founded in 2006, it looked like a traditional private radiology practice, albeit a family affair. Anand Lalaji, MD, a musculoskeletal radiologist, his wife Tejal Lalaji, MD (a neuroradiologist and breast imager) and his father-in-law Mahendra Patel, MD, (a body imager) grew the practice over the subsequent three years into a thriving enterprise with multiple hospital and imaging center clients in Northeast Georgia. 

That success, however, bred its own set of problems, and chief among them was inefficiency.  “We used to read and operate on three, four or five different PACSs, and over the course of time that becomes incredibly inefficient as the volume starts to grow,” Lalaji, the practice’s founder and chief medical officer, says.

At the same time, Lalaji and his partners were experiencing the successive reimbursement cuts that had the rest of radiology in a vice grip. “In order to be protected, the practice had to diversify,” he says. “We needed to get out of the traditional model of interpretation only.”

In 2009, the practice took initial step to improve efficiency by consolidating all of its clients onto one PACS that was efficient, had a decent amount of “bells and whistles” and, most importantly, allowed communication easily among multiple parties, Lalaji says.

Next, the principles came up with a three-part plan to squeeze waste out of their “production” system and diversify the practice. “Our company is built on innovation,” Lalaji notes. “We continuously look at our processes and create solutions to improve quality and efficiency. We felt that Viztek, given all of that, was a good platform to help us take that next step, and that’s what we did.”

Leaning the interpretation process

Today, the practice serves the needs of more than 175 imaging sites of service in 21 states, including imaging centers, urgent care and hospitals, with on-site radiologists at some hospital sites. During the past five years, the practice’s IT platform and the strategic plan have evolved in concert.

At the center of its drive to remove waste from the interpretation process is a system it calls radASSIST, developed by applying the principles of Lean Six Sigma to the interpretation of a radiology study and the development of the report.

“There is an incredible amount of time that is significantly inefficient that a radiologist has to spend to look for a lot of different things,” Lalaji says, whether that is looking for a history, a particular imaging sequence or prior study, or making a call to find a missing piece of information. “There is a lot of inefficiency in the set up of a radiology report.”

In response, the practice created a conveyor-belt methodology for the purpose of interpreting the radiology study with different teams “stationed” along the conveyor belt responsible for specific functions necessary to put together a radiology report.

This system has allowed the practice to achieve a .1% to .2% error rate compared to a nationwide average of 3% to 6%, Lalaji says.  “What was great about our partnership with Viztek, was that they modified and coded different aspects of the PACS so that we could create this virtual conveyor belt,” he says.

The radASSIST system creates efficiency, which in turn creates economy, and that economy is shared with clients. “Not only are our clients paying an economical rate, but they are also enhancing their quality,” Lalaji says.

Working with consolidators

A key market segment for The Radiology Group is imaging-center consolidators. “As reimbursement continues to decline, imaging centers are getting bought by hospital systems, private equity and banks,” Lalaji says. “It’s happening all over the country. The imaging center business is an extremely fragmented business: The five largest imaging-center companies represent less than 20% of the market.”

Much of the consolidation activity in the imaging-center market is regional, with hospital systems and local companies the most active players, but eventually national companies will be predominant, he predicts. “Goldman Sachs and other investment banks are taking more interest in this sector but the way they think is, ‘If we buy 1,000 imaging centers, this is the return we are going to get,’” Lalaji says.

After equipment, the biggest expense on an imaging center’s books is the radiologist’s cost, and that cost is variable and therefore unpredictable. With radASSIST, he says, the work of 10 radiologists can now be done with fewer radiologists.

Lalaji is confident that radASSIST will be the backend platform of choice for imaging center consolidators. “They can send a large portion of their studies through the radASSIST platform, and by economy of scale, they are able to enhance their quality and efficiency and still not pay a variable proportional cost that escalates out of control,” he says.

Drive to diversify

The second action item on the practice’s strategic plan was to diversify. Interpretations continue to provide the primary revenue stream, but the practice has created a series of vertical service lines calculated to meet all of the needs of an imaging center, evolving from a traditional practice to a radiology services provider.

As the practice grew during the past eight years, it brought many services in house and now provides technology and operations consulting and compliance, finance and billing services to imaging center clients. “You can’t go partially into the management business,” Lalaji says. “You have to create all of those things that are important to an imaging center, and then create those verticals and offer the full package if needed.”

A good example of how the practice’s IT platform and service offerings have developed together over time is a built-in coding function in the PACS that promotes more accurate billing and provides clear reconciliation if charges are missing. Before a report can get approved, the radiologist completes a verification check of the number of CPT codes that will be billed.

With insourced billing, the coding function enables management to keep track of exactly how many CPT codes are read by the radiologists and reconcile that with the number of CPT codes billed per client, by modality.

“Radiologists know a lot more about coding than you think they do,” Lalaji says. “And they know exactly how many reports they are reading. They may not be 100% perfect, but radiologists make the best coders. If there is a bilateral upper extremity venous ultrasound, that is two body parts and they are going to put in a number two.”

This function was coded into the Viztek reporting module platform upon suggestion from The Radiology Group. “By doing that, every station along the way on the conveyor belt is checking how many CPTs are there,” Lalaji explains. “The radiologist has the final say, but he is seeing what the other people have have coded, so everyone becomes a coder.”

Fixing a broken system

The third and final action item on the strategic plan was to diversify into imaging center ownership, but the practice wanted a specific niche and believed that women’s imaging provided an excellent opportunity to repair the anxiety-producing process of diagnosing breast cancer.

To that end, The Radiology Group recently opened two women’s imaging centers under the banner of The Women’s Imaging Group, with plans for two more acquisitions in 2015. The Lalajis developed a process they call Pink Compass that expedites the breast cancer diagnosis from beginning to end.

As The Radiology Group re-engineers the radiology practice, even the practice’s staffing model is unique: If the work gets to be too much for the 11 core radiologists and the support staff of 30 FTEs (which Lalaji calls the primary “solar system”), then a secondary solar system of radiologists is employed. A tertiary or third solar system of FTEs also can be utilized when volumes reach a higher level.

“We are a small company, but we are very technologically driven,” Lalaji says. “Our goal is to leverage our assets—our process, our technology and our people—to transition from a small company to a medium to large company in the next four or five years.”