Radiology’s Balanced Scorecard
By Curtis Kauffman-Pickelle

Curtis Kauffman-Pickelle with Debi Brannan, Director for Business Development, Austin Radiological Association

In business, as in life itself, success is all about balance. And in the business of radiology, balance is among the most important factors that can determine the fate of the practice. Take any position or point of view to its extreme and the result is alienation, tension, and, inevitably, sub-optimal performance. Too much attention on technology at the expense of customer service can lead to a great-looking suite of scanners sitting idle for lack of patients. A myopic attention to financial success at all costs can lead to a drained organization incapable of sustaining itself for the long term. You get the picture.

The same holds true for the metrics and instruments for measuring success in business. Although outcomes and their determinants have been an important part of the medical lexicon since Hippocrates exhorted his students in his first rule to do no harm, the business world has struggled with how best to evaluate outcomes in a way that will reveal the various layers on which its success can be fairly evaluated—in a balanced way that tells the full story, and for the benefit of all stakeholders. It is a story of the role of innovation and other important characteristics of an organization that may not be readily discernable to the evaluator of the firm’s balance sheet.

One device that has successfully accomplished this complex task is the balanced scorecard.

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Legislative Report:
Post-DRA Roundup: The Good, the Bad, and the Downright Ugly
By Douglas G. Smith

I have been asked to provide our experience, so far, in 2007, with respect to the impact of DRA 2005 on imaging centers. Many professional associations and news outlets are all asking the same question: What is the real impact of DRA 2005? In our experience, it is a bit early for any of us to have sufficient data to precisely assess the impact of DRA 2005 in various settings and markets.

However, for the purposes of this article, we will share our experiences to date, based on specific data from a number of imaging centers, in different markets across the country, with varying federal and state patient content, and with varying market positions in the communities they serve.

As one might expect, early results vary widely, depending on the size of the imaging center, local demographics, numbers of modalities in the imaging centers, and the aggregate amount of Medicare and Medicaid content at each of the centers. But, as we found out, DRA 2005 is only part of the story.

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Maximize MR Throughput
with Efficient Scheduling

David A. Dierolf

As little as one extra MRI per day can generate more than an additional $200,000 in incremental revenue annually. But most imaging centers use crude scheduling systems that do not accurately present a center’s potential throughput. David A. Dierolf, director of performance improvement, Outpatient Imaging Affiliates (OIA), Nashville, Tenn, outlined a handy method for understanding the potential of your schedule to enable maximum throughput for an audience gathered at the May meeting of the Radiology Business Management Association in St Louis, Mo.

Hired by OIA in advance of the Deficit Reduction Act to improve efficiency throughout the company’s imaging center holdings, Dierolf, an IT expert, shared two case studies with the audience that revealed his techniques and yielded significant additional incremental revenue at the centers. OIA specializes in establishing joint ventures with local health care providers and operating those centers for its partners. Attributing OIA executive VP, operations, Kelly Gill, as the inspiration for his talk, Dierolf said: “One of the first things he told me was nothing is worse than unsubstantiated success. I am going to build my talk around that.”

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sponsored by

Marcia Flaherty

Many business opportunities for radiology groups become mired in an inability to act in the private practice sector. In order to explore the dynamics that facilitate entrepreneurial action within radiology practices, ImagingBiz.com identified a practice that has successfully developed several new service lines in the past five years: Riverside Radiology Associates in Columbus, Ohio, a soon-to-be 60-radiologist practice, officially founded in 1980, but with roots that go back many years. Not only does RRA operate a successful full-service outpatient imaging center and interventional office, it has developed an information technology service and a brand-new teleradiology business, and also provides billing for some clients. We explored the process by which RRA assesses new business opportunities with Marcia Flaherty, who has served as practice CEO for seven years.

ImagingBiz.com: Tell us about some of the most successful new service lines and delivery models RRA has developed over the past five years? 

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Michael Mardini

sponsored by

The mantra for practice management in the post-DRA era is data management, and everyone knows how much data a radiology practice can produce. From the multitude of bills (service points) to the vast number of customers—not to mention the deluge of clinical data—radiology practices need tools. Commissure offers tools that assist in three domains: reporting and communications, decision support and utilization management, and data analysis tools. For the purpose of this interview with Commissure CEO Michael Mardini, ImagingBiz.com focused primarily on the utilization management tools and the leverage they provide the radiology practice in the post-DRA environment. Mardini founded voice recognition and reporting company Talk Technology in 1994, which was acquired by Agfa Healthcare in 2001. He founded Commissure in 2004.

ImagingBiz.com: As the business side of radiology evolves, where do practices need to be in their ability to manage their data? What are the flash points?

MARDINI: Right now, outside of the most business savvy clients, they really are not prepared. I didn’t know this coming in. The thing that has amazed me more than anything is the limited access clients have to their own data. They have to buy special tools, and they are hiring programmers to write the reports, so only the savviest of sites can really use their own data. With P4P looming, there is no way, absolutely zero chance, that any of the items or any of the changes focused on utilization management are going to be dealt with unless there are some major changes in the ability of clients to access their own data and to manipulate it. There’s a lot to be done. RadCube goes a long way, but it really starts with accessibility and consumability of the data, opening these closed architecture databases that exist now so that people can actually use their data. Commissure supports IHE-compliant methods of accessing this data that virtually every vendor conforms with.

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Quick Tips to Maximize your PACS Site Visit
By Nicole Pliner Berman, MHSA, and Lara Henshaw Archer, MBA, MA

Selecting a PACS vendor is a long process requiring a significant amount of due diligence. Unfortunately, after the research, vendor demonstrations, and analysis of lengthy RFP responses, fatigue often sets in. As a result, one of the concluding, valuable steps—the PACS site visit—is often skipped or minimized. PACS site visits, however, if planned well, can be an invaluable part of your vendor evaluation and selection process. The following are some tips on how to ensure a more valuable site visit experience.

Scheduling. Schedule your site visits before requesting RFP responses and conduct them within six weeks of receiving the responses. Also, it is best to schedule the site visits to different vendors close together. This ensures that everything remains fresh in your mind.

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Harvard Business Review: The Opposable Mind

Instead of focusing on the actions of successful leaders, an article in the June issue of the Harvard Business Review by Roger Martin looks at how successful leaders think. Martin has spent the past 15 years studying winning leaders and concludes that they all share the predisposition and ability to simultaneously hold two opposing ideas in their heads.

Martin calls this mental multi-tasking integrative thinking, and describes it as an “opposable mind.” He argues that integrative thinking is far more fruitful than conventional thinking, which tends to result in the choice of the lesser of two evils. The central example in the article is Bob Young, CEO of Red Hat, which was selling low-cost versions of the open-source software Linux in the mid-90s. Young was able to see beyond the two paths in the software business at the time—continue to sell CDs of the open source software or follow the path of Microsoft and sell higher cost versions of proprietary software—to come to a winning solution that made him a billionaire: give away the open-source software and sell service.

The article outlines the four stages of decision-making and compares the conventional approach to integrative approach.

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Inland Imaging’s
4-Part Strategic IT Deployment
By Jon Copeland

In my 25 years of information technology (IT) management in four completely different industries (distribution, agricultural biotechnology, process manufacturing, and now health care), I have found that if IT is considered a strategic resource, rather than a pure cost-savings resource, the systems efforts will be more likely to succeed. Many times over, investments in IT, which can be extremely expensive, fail because costs are cut in training, infrastructure, and follow-up support. IT projects often take longer and cost more than anticipated, but if executed well and completely without cutting corners can provide an exceptional payback while adding unforeseen strategic value.

In 1996 when I started working at Inland Imaging, we were a group of 12 radiologists based in Spokane. In that year, we created and debt financed a business services division with the insight to provide medical management, business, and IT related services to an assortment of medical groups and providers in our area.

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A survey of imaging center administrators polled right after the first quarter revealed that more than half the administrators anticipated significant, measurable declines in revenue in 2007, according to Mary C. Patton, director, market research, IMV Medical Information Division. “Some of that is due to DRA and some is not due to DRA, but in general, about 44% said that they were going to see revenue declines in the 10% to 25% range for full year 2007 versus 2006,” she said. “And another 16% said they expected those declines to be greater than 25%. You’ve got to know that a lot of those centers were marginally profitable in 2006. Those types of declines, we are guessing, took many from a profit position to a loss position.”

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Figure. Percentages of imaging facilities that have changed their organization's equipment purchasing policies based on the DRA. The possible types of policy changes were:

• More willing to lease equipment than previously
• More willing to purchase used/refurbished equipment than previously
• More willing to consider non-traditional equipment financing arrangements
• Change in scope of pro forma analysis required for equipment investment
• Reduction in the Internal Rate of Return required for equipment investment
• Longer payback period allowed for equipment investment

I had the opportunity to be guest at the strategic planning session for the Radiology Business Management Association (RBMA) a few years ago. This meeting consisted of the board members of RBMA and chairs of the various committees and at one point addressed the need of data in benchmarking for radiology groups and imaging centers.

RBMA produces a wealth of information in the form of surveys, including an annual accounts receivable survey and a biannual imaging center cost survey. However, there existed an unquenched thirst for further information behind the data, and this led to the formation of information sharing groups. These groups, called Member Exchange Community Alliance (MECA), are helping managers of radiology groups and the groups themselves cope with the changes being brought on by the Deficit Reduction Act of 2005 and other pressures, as well as seeking a “best practice” model to fit their individual situation(s).

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