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 it, not least because so many patients are moving to high-deductible plans. “People are shopping around, asking why the price is so much different just a few miles away,” says Welch. “We are working on trying to get our prices to be more competitive with the [freestanding] outpatient imaging centers.”
People programs, business ventures
At Baystate Health in Springfield, Mass., a four-hospital system affiliated with Tufts University School of Medicine, Jason Newmark, VP of diagnostic services, says the institution’s biggest enterprise-wide push is for value. To that end, the system runs aggressive programs to improve on not only patient experience, but also employee engagement.
Imaging is becoming commoditized, and many people assume that quality is limited to nationally ubiquitous markers like speedy turnaround times on reads, thorough peer review of select cases and, increasingly, carefully documented radiation dose monitoring, says Newmark, who also directs lab operations. To differentiate itself, Baystate is “always looking at how we treat our staff. It’s very important that we create a culture that we want to be part of—we make sure everyone on staff knows that they are an important part of what we’re doing,” he says.
Engaged employees make for pleased patients, he believes, pointing to surveys on which 70% of patients score various measures of the hospital experience with a perfect 5 stars—up from as low as 30% giving “high fives” just a couple of years ago.
Where improving “people skills” makes for a healthier care environment at Baystate, an eye for business helps ensure its fiscal health. For example, Baystate has entered into a number of joint ventures [JVs]. The system employs physicians in many specialties, explains Newmark, but radiology is not among them. Some years ago its primary contracted radiology group, a longtime strategic ally currently numbering 30 radiologists, agreed to form a JV. The move enables the group to “better align with us strategically while enabling us to get into the community a little more effectively,” Newmark says.
The venture, Baystate Radiology and Imaging (BRI) is a shared-ownership arrangement enveloping several outpatient sites plus mobile services. “BRI is licensed as physician owned, so we’re able to negotiate different rates than hospital rates,” Newmark says. “It’s our lower-cost option.” The technologists are employed by Baystate Health, and Newmark’s group is now driving efforts to coordinate radiology scheduling across a current total of 11 sites. Plus, they’re working to integrate various imaging IT systems, including RIS and PACS, on a single platform. (A second JV, also formed some years ago, melds BRI with Boston-based Shields Healthcare to provide independent outpatient MRI and PET.)
From a branding standpoint, Baystate’s JV partners have the appearance of standing on their own. That’s a perception that needs to be nudged, Newmark says. “Anything that has a Baystate Health logo in front, we really want to consolidate and integrate, so that ‘Baystate’ means something,” he says. “People have to know that, when they walk into any Baystate facility, the standards, the protocols, the level of quality are all the same. Right now we are in the middle of a very strategic play to pull all that together. It’s very exciting.”
Meanwhile, radiologist employment is on the table and under consideration, Newmark says. A final decision may come before the end of this year. “There are many pros and cons to both employed and contracted,” he says. “I have my own bias, but I don’t think it’s a good idea to say it out loud yet.”
“This is a fun time to be in healthcare,” continues Newmark, pointing to the potential of big diagnostic data to drive population health efforts. “I appreciate that it’s very difficult with the financial pressures. But often when you’re put up against the wall, good things happen. Somebody is going to come up with something that is disruptive. Somebody’s going to find a way to make their value more visible and understandable. And they’re the ones who are going to be standing when the dust settles.”
Centralized and un-siloed
PACS standardization: $800,000. Supply standardization: $900,000. Centralized shared staffing: $1 million. System capital purchasing: $2.5 million.
At Scripps Health in San Diego, those numbers begin to tell the story of hospital-based centralization. Each eye-popping figure represents cost savings the imaging section of the four-hospital, 28-outpatient-site system has realized since CEO Chris Van Gorder set the standardization express in motion four years ago.
That was before even getting to the thousands of job descriptions that once cluttered the system across all departments, top to bottom. Today there are just 35.
“It’s been a great journey,” says Todd Hoff, the corporate vice president who oversees imaging, along with lab and radiation oncology, not to mention hospice, palliative care and home health. “I used to run operations for siloed hospital campuses. We were a decentralized hospital company. Now, we are moving toward a system of care.”
Hoff says centralizing imaging didn’t come easily. Siloed and separately selected PACS, RIS and imaging equipment abounded. “The last four years, we have literally been yanking [systems and equipment] out. Standardizing takes a long time in imaging because you can’t simply turn stuff off.”
On the equipment side, where once many vendors had a foot in the door, now if your name isn’t one of two vendors, you’re out. “We had to do that because we are now centrally staffing,” Hoff says, adding that payroll represents 50% to 60% of the budget, making it the largest line item. “Every employee who comes in starts as part of the shared staffing. They get trained across the system. And if you have different equipment at each site, it’s really hard to move people to where they’re most needed.”
Asked for an example of centralization/standardization in action—at Scripps those two terms seem to be used more or less synonymously—Hoff points to interventional radiology. With five different IR sites, Scripps has formed one IR technical committee to make all product selections while standardizing inventory. The committee looks at the physicians whose numbers identify them as outliers, then tasks physician leaders to go in and ask, “Why is your procedure X costing $200 more, on average, than everybody else’s?” “That’s the level of detail and granularity that we are now into,” Hoff explains.
Hoff says he believes Scripps’ top-down call to unify and conquer whatever challenges healthcare reform may bring positions the system well for long-term fiscal health. “We have very detailed capacity analysis,” he says. “We know exactly where the workflow is, where the demands are. We do have two call centers, but they are managed by the same manager. And one of the things we are doing right now, actually this year, is we bought a facility so we can move to a centralized call center with a centralized platform for scheduling. And that is really going to be a big, big benefit for us.”
This is precisely the dynamic change that healthcare has to go through, Hoff says. “We’ve got to reengineer the way that we do our work. We are not perfect yet. We still have a lot of work to do. We are on that journey of continuous improvement.” And steady standardization.
The top management priority for hospital-based radiology right now is—or ought to be—collaboration between radiology administrators and clinical radiology leadership. The two should be meeting frequently to talk about strategic paths to enhance and strengthen radiology’s partnership with the hospital.
That’s the considered opinion of Penny Olivi, MBA, senior administrator of radiology at the 816-bed University of Maryland Medical Center for close to 14 years. The future is now in the Old Line State, as capitated payments through the Maryland Health Services Cost Review Commission (MHSCRC)—through which hospitals receive a monthly sum and figure out how best to spend it—discourage volume growth and reward the value-oriented. This happens in effect if not by design. Either way, the mandated thrift demands a unified approach.
More and more, “we have dyad leadership—an administrative person and a physician person—in key areas of the department,” Olivi, says. “I think in hospitals that is just imperative now. And radiology is so well set up for that, because we have always worked with our department chairs.”
Olivi’s care setting being academic, her chair and co-leader of radiology, Elias R. Melhem, MD, PhD, is employed by the medical school, carrying teaching and research duties along with clinical, while she is half paid by the practice and half by the medical center.
“I think that is the right model,” she notes. “If you’re in the hospital radiology business, the chairman and administrator have to feel accountability to both those entities because the goals of the two can be very different and they could be very badly misaligned. And they need to be aligned.”
Once the relationship is established, says Olivi, the administrator/chairman dyad needs to be in the C-suite, making sure radiology is represented at the hospital table. That’s critical, she says, in a time of “misaligned incentives,” when hospitals are no longer rewarded for increasing their volume but many radiology practices still are.
“This all has to be worked out through relationships and partnerships, which become more important as healthcare moves from volume-based to value-based,” says Olivi. “Anyone can manage in an upward market. When reimbursements are constrained, when finances are tight, that’s when it takes the really good relationships, strategies and partnerships to keep things going.”
The future rises in the far Southwest
Roughly 2,600 miles west of Maryland, UC San Diego Health System is going beyond envisioning the future to building it—literally. Next year it will open the inpatient sections of its new 10-story, 510,000-square-foot, $840 million Jacobs Medical Center. An outpatient pavilion will follow in 2017.
For Katherine Richman, MD, medical director of UCSD's Thornton Radiology, the opening will be equal parts dream come true—she spoke about reimagining radiology at last year’s RSNA—and business won back.
“We’ll have a whole new interventional radiology suite, and in the outpatient pavilion we’re going to have two new CTs, two MRs, ultrasound, fluoroscopy x-ray units, the whole bit,” she says. “We’ll be able to expand service, and I’m hoping that by the time we open the outpatient pavilion we’ll have a better ability to, for example, have online decision support and immediate patient feedback. I would hope we’ll also have critical results reporting.”
The principles guiding UCSD’s mega-move can serve as inspiration to all hospital-based imaging stakeholders. After all, the current facilities aren’t exactly low-rent—and yet “we lose patients to community imaging centers all the time,” Richman says.
Will those who choose easy parking and suburban drives to freestanding imaging centers outside San Diego start streaming in for more than just an initial look-see? Richman believes so, as the building project is just one plank in a broader plan for strategic growth.
“We’re trying to move toward same-day imaging” and easy electronic image sharing, she says. “For many patients, yes, it may still be more convenient to go to an outpatient center. But they’ll know that it’s better to get their imaging done here for a number of reasons. If they’re coming to see one of our specialists, we want to make sure they can get all their imaging done here. That’s better for them, because a lot of other places don’t do the kind of imaging that we do with the detail and special sequences we use.”
She points out that imaging is “at the heart of patient care, so we can be at the forefront of getting all the players in the community to sit down together and say, ‘Let’s forget our silos. Let’s ask what we’re going to do to make the patient’s life easier and better.’ Often what can happen is that imaging leads to greater access into other areas of care.”
Back in Salt Lake City, Welch, a 41-year veteran of Intermountain Healthcare, is as excited about the future of hospital-based imaging services as she’s ever been. “I actually love the environment we’re in,” she says. “We are being forced to make certain changes, but we can do so much more than we could do before. We spend a lot of time thinking about how we can innovate to take care of our patients in new ways that are less costly and more valuable.”