The tide is turning

For quite a few years, I had to listen to demands of new graduates from fellowships and residencies when recruiting into my practice.

The most inane demands including "no weekends" or "no mammo" or my favorite "I don't x and I want to practice y 80% of the time".

I suspect this is the invisible hand of the market and other practices tolerated it, so we were faced with it also. We fought it whenever possible, and I think we were stronger for it.

Those same "its all about me" players went to other practices and became problems for those groups.

Its a different story now.  The radiology professional market is a complete buyers market.  Unless we see a substantial market rally, the soon to be retired radiologists remain in their practices not allowing new incoming recruits.

There is a complete glut of graduates, many who are now forced to stay on as junior attendings in their respective fellowship hospitals as very cheap labor.

I guess its good for academic practices, good for seasoning of recent graduates and makes for a much better market for private practice.  If you are running a successful practice, you can be very choosy on who you hire.

My opinion of the "stock" of radiologists is that the residency selects for high intellect, selfish, non-team players seeking lifestyle and monetary reward.  Almost the worst possible people to build a group practice upon.  There are however good eggs in the whole bunch.

The downside... and its probably cyclical is that the dearth of jobs means less students go for radiology which in turn lowers the quality overall of the incoming med student which hurts the radiology world in the long run.  You want the smartest, most driven people (with all their warts).

We (at my practice) remain optimistic in increasing the value and skill of our group on the whole with this new equilibrium but I'm still hoping the stock market rallies so the radiology world remains robust with demand for new advanced well trained graduates.

The Radiology Experience

The relationship between hospital based providers and their overseers, the hospital administrators can be a stormy one.

I wonder however if any of the physicians in these hospital based groups have ever read a book on customer service or actually experienced the shortcomings of their departments and the level of service and quality they provide.

It amazes me that radiologists can ignore a ringing phone or do their utter best to avoid helping a clinician with the short-sighted view that they are too busy, not realizing that referrals from that same clinician are the lifeblood of the practive.

The flip side is that service flow and the patient customer experience is largely based on the infrastructure designed and serviced by the hospital and radiology managers/supervisors and administrators.

Perhaps the two shall never meet.  I laugh however when I get inane recommendations from a vice-president that maybe we should try something when they have no experience running a radiology department.

This leads me to the conclusion that perhaps the hospital should outsource the entire department to an outside vendor for a fixed cost, collect outpatient technical component, offload personnel, equipment maintenance and just provide the space, power and infrastructure.

I would not be surprised if  Imaging Company X with the full complement of tech staffing, IT experts, radiologists and administrators could revolutionize the whole experience and radically shape it into a faster more responsive customer-centric organization where the radiologists / providers and the administrators are strongly aligned.

Just a thought

The Rise of RadNet

Sounds like an interesting title for a terminator movie.  The radiology professional services market is undergoing tectonic shifts in outpatient and hospital based radiology departments.  The rise of large telerad providers such as vRad and RadNet serve to commoditize the actual service of professional interpretation of films.

The obvious scales of economy and 24-7 coverage and lack of geographic constraints have created a power struggle between independent groups and the national providers.  vRad has concentrated its efforts on taking market-share at the hospital provider level and changing from a nighthawk only model to daytime and nighttime reads.  Ultimately vRad will take its place but not be able to sustain a relatively good growth rate to reward shareholders.  It should be a private company.

RadNet however has over a 100 outpatient imaging centers in its footprint as well as a strong hospital professional business.  Their strategy will be superior.  RadNet in certain places such as Maryland now has the lion's share of outpatient imaging.  Since insurance contracts are generally a state-level negotiation. RadNet will be able to leverage their market size and negotiate better rates.  This sounds like possible anti-trust litigation potential, but does create the more viable revenue stream and a better business model than vRad.

The rise of large corporations only serves to divert professional revenues from the doctors to private parties and shareholders.  It may be time that independent groups retain their sovereignty but invest in back office/shared infrastructure type agreeements to achieve the same economies afforded by the big players..... or just join them.

Welcome

Welcome to my narrow view of a huge industry dedicated to diagnostic and therapeutic imaging of disease. An interesting thing happened to the burgeoning imaging center business recently related to significant cuts in technical component reimbursement on the medicare fee schedules. Significant would probably be an understatement in some cases.

For people who don't understand imaging reimbursement, outpatient imaging consists of two payments from Medicare, a technical component and a professional component. The professional component is for the professional interpretation of that particular test, and the technical component is the fee paid for the equipment or infrastructure part of the test. In many cases this fee is paid together as a 'global' payment if the provider of the imaging service provides both professional and technical services. Many private insurers and HMO base their reimbursement on the medicare schedules usually paying anywhere from 90% to 125% of the medicare fee schedules.

This does not impact inpatient services because in most cases, a patient is admitted under a DRG and no matter how long or short the stay the money is the same on that DRG (oversimplified) so imaging costs on the technical side are lumped into the DRG reimbursement.

Up until recently the imaging portion of the medicare budget has been growing at a pace far exceeding any other category. This budget cut however is aimed at reducing that growth.

What does this really mean? I think we will see imaging center growth slow from its frenetic pace, operating margins will slim down and established players will take over while marginal
centers will close.

It also means that the latest 64/128 slice CT scanner that costs $2.1 million won't be worth the investment as outpatient imaging.

11Blade