The Changing Faces of Radiology
By Curtis Kauffman-Pickelle

I have been musing about the past 24 years that I have been involved in the business side of radiology and how amazing the transformation of this profession has been during that time. Interestingly, the issues we face today mirror those that we faced in 1983 as prospective payment was then unceremoniously ushered (thrust?) into existence, creating the first of several subsequent tectonic shifts in the way the business is conducted and services are paid for.

Now we have “pay for performance” (P4P) on the horizon and pending shifts in the sustainable growth rate (SGR) formula to add to the litany of “adjustments” to the economic model for reimbursement that begin with the government programs and then migrate to the other payors. The assault continues and will continue unabated.

My view is that what lies ahead will quite possibly make the DRA seem comparatively mild in terms of its overall contribution to the level of angst that the business will experience. Cuts added to more cuts added to increased market pressures added to the consumer movement--with the last perhaps changing the way we do business more than the others combined—will require all of us to be more skilled at “the business of radiology.”

What about this increasing role of the patient in the outpatient business proposition?

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Doshi Diagnostics Q & A: Strategy and the DRA

Anish Berry

As the Deficit Reduction Act worked its way first through the machinery of the legislative process and then, later, through the millwork of implementation, imaging center operators around the country hoped they somehow might be able to scupper the part of the law affecting them before the DRA could take effect on Jan. 1. Once they realized there was no stopping the measure, many shifted their attentions to devising business strategies to spare their centers a fiscal savaging. Doshi Diagnostic Imaging Services of Hicksville, NY, began formulating its strategy shortly after the act passed into law at the close of 2005.

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Legislative Report:
NCQDIS: Now More than Ever
By Robert V. Baumgartner, Chair

Those of us in the industry recognize that imaging is a fast-growing alternative to invasive procedures. New technology, an aging population, and declining costs of equipment are leading to more imaging procedures being performed each year.

Unfortunately, private and public payors have a tendency to react to growing imaging expenditures arbitrarily and without a thorough understanding of the drivers of growth, both positive and negative. The 2005 Deficit Reduction Act (DRA) was an example of the type of reaction that will continue to occur if we do not stand together to educate our representatives and health insurers on how imaging actually results in better care and savings.

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EMI: The Last Cost-Cutting Frontier
By Dean Kaufman

The changing outpatient imaging business environment has made it imperative for all radiology managers to continually reduce operating expenses. Reimbursements are being squeezed by the recent Deficit Reduction Act (DRA) cuts and the multi-body part discount. The recently published Moran report, sponsored by the Access to Medical Imaging Coalition (AMIC), found 87% of procedures (126 of the 145) affected by the DRA cuts would be reimbursed less than the estimated cost of the exam. These factors all negatively affect cash flow at many centers, particularly in the larger urban centers with a disproportionate Medicare/Medicaid population. One of the single, largest, yet seldom-managed, operating expense is repair and maintenance service expenses. For some centers, equipment maintenance insurance may make sense.

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A Carrot Approach to Radiologist Compensation
By Zahabia S. Electricwala, MHS

A creative radiologist compensation plan is critical for improving group and individual performance as well as attracting and retaining talent. Transforming your practice from a traditional to an incentive-based compensation plan can be accomplished through this three-phase process.

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Business Guru Weighs in on
Radiology Leadership Issues

In an extensive interview to be featured in the April issue of Imaging Economics, Jim Collins, researcher, business guru, and author of the best-selling Good to Great, shed perspective on radiology's current harsh climate and offered a glimpse of the focus of his next book, based on five years of researching companies that have prevailed in environments characterized by turbulent disruption.

An avid rock climber, Collins used the mountain as metaphor in characterizing the swiftly changing climate buffeting imaging providers, as the following excerpt describes.

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ACR to Imaging Centers:
Do Not Dither on UnitedHealth Accreditation

In announcing that all network imaging centers must be accredited by March of next year, UnitedHealthcare, Minnetonka, Minn, has accelerated the trend toward imaging center accreditation and technical privileging requirements. The United accreditation program applies to all participating freestanding imaging centers and physician offices and is based on the accreditation standards developed by the American College of Radiology (ACR) and the Intersocietal Accreditation Commission. Imaging modalities impacted include CT, MRI, PET, nuclear medicine/cardiology, and echocardiography. In order to be in compliance, the ACR has advised imaging centers and physician offices to submit accreditation applications by June of this year.

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Berger Makes His Move

For some, the Deficit Reduction Act of 2005 was a glass half full. Count Howard Berger, MD, among them. In an article in the March issue of Imaging Economics, Berger acknowledges that his company RadNet strategically acquired 69 imaging centers six months after the act passed into law—for a grand tally of 129 centers regionally clustered throughout the United States—at a time when most imaging center operators were lobbying for the act's repeal.

"This acquisition was something we had been considering for quite a while, but not until the Deficit Reduction Act came along did we really get serious about it. The DRA was a transforming event. It was a driver for making this transaction happen."

—Howard Berger, MD

RadNet has positioned itself to benefit from growth in imaging technology applications such as MRI spectroscopy, MRI angiography, PET/CT, and MR-focused ultrasound ablation. But, perhaps most importantly, the company is prepared to offer payors its own home-grown utilization management services.

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Manage People as Assets,
Not Costs

The best path to profitability in a global economy is not technology but effective management of an organization’s human resources, according to Laurie Bassi and Daniel McMurrer, authors of “Maximizing Your Return on People” in the March issue of the Harvard Business Review. The authors contend that investments in human capital management (HCM) can be directly linked to organizational performance, and they have developed a survey tool to measure an organization’s HCM effectiveness.

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Marketing 201

In the second article of a series in the Journal of the American College of Radiology, Frank Lexa, MD, and Jonathan Berlin, MD, MBA, warn radiology practices that they can waste marketing dollars if they do not observe what he refers to as the 4 P's of marketing: product, price, positioning, and promotion. A summary of these foundational elements follows.

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Executive Suite

MEI Appoints Fear Credit Director
Raymond D. Fear was apponted Director of Credit for MEI Financial Services, LLC, Richardson, Tex. Fear will be responsible for credit and underwriting of all company transactions.

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Braly to Replace Glasscock at Wellpoint
Wellpoint CEO Larry Glasscock will step down in June, to be replaced by Executive VP Angela Braly, who also currently serves as general counsel and chief public affairs officer. Glasscock will continue as chairman of Wellpoint, Inc, Indianapolis, In.

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Grossman Takes Helm at NYU
Robert I. Grossman, MD, was appointed the 15th dean of the NYU School of Medicine, New York City, and the CEO of NYU Hospital Centers, effective July 1.

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