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THE BIG PICTURE
Growing Old Together
By Curtis Kauffman-Pickelle
A lesson in business maturity: Microsoft CEO Steve Ballmer met the company's cofounder Bill Gates when they were both undergraduates at Harvard. Gates dropped out to build one of the most successful companies in history. Ballmer went on to graduate from Harvard and eventually ended up at Stanford, in the graduate school of business. By the time they got together as business partners at Microsoft, the company had matured to the point where Gates' entrepreneurial model desperately required buttoned-down business principles and infrastructure in order for the company to succeed in achieving his original vision of a completely linked and computerized society.
What's the lesson for today's radiology practice leader or imaging executive? Vision eventually requires infrastructure and proven business leadership in order to realize its full potential. Businesses evolve and change in order to thrive. Those that don't do so stagnate and eventually become obsolete.
The trick is to know, as Gates did, when the time is right to evolve the organization from a laissez-faire, mom-and-pop operation to a big-time structure designed to implement the ideas that result from the vision and to provide for long-term growth and maturity. Of the many questions that I am asked as I traverse the country and meet with various practices, the most frequent is, "How will I know when we are ready to take this next step? Do we need a CEO?"
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Legislative Report:
Another Temporary SGR Fix Is in the Wings
By Howard Fleishon, MD
The CMS Sustainable Growth Rate (SGR) is again the center of attention for the medical community. The State Children's Health Insurance Program bill passed in December 2007 averted the last SGR-mandated cut by funding a 0.5% update for six months. We are, however, once again at the precipice of unprecedented, and arguably untenable, physician payment cuts. Without intervention, Medicare rates will go down 10.6% on July 1, 2008, and another 5% on January 1, 2009. The Medicare Trustee Report estimates that by 2016, the reductions will total 40%, if legislation is not enacted. Many in Congress want to tie any SGR alternative to a longer-term solution to fix the dire financial projections.
In 1992, the current fee-schedule approach used by Medicare replaced the prior system, which was based on physician charges. The current CMS schedule bases payments on measures of work needed to provide services, or RVUs. As originally drafted, the fee schedule was updated annually based on the Medical Economic Index and an adjustment factor, the Volume Performance Standard (VPS). In 1998, Congress replaced the VPS with a new mechanism, the SGR. The SGR was designed not only to control spending for physician services paid for under Part B of Medicare, but also to distribute risk. By aligning fee updates with spending, the SGR was to provide physicians with a collective incentive to control both the volume and intensity of physician services.
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Coronary MR Angiography:
Can It Compete With Multidetector CT?
By David A Bluemke, MD, PhD, MsB, FAHA
Just five years ago, the thought of cardiac cross-sectional imaging turned immediately toward the potential of MRI for evaluation of the heart. Equipment manufacturers provided new MRI scanners with fast gradients for this purpose and developed new pulse sequences. Advanced 3D workstations provided new software for analysis of cardiac function, and stress tests started to be performed in the MRI scanner. Everyone understood the superiority of MRI, compared with echocardiography.
The key word in the preceding description remains the potential of MRI. Today, when we think of cardiac imaging, our thoughts move immediately toward cardiac multidetector CT (MDCT). These machines can combine hundreds of rows of detectors for imaging the heart in a fraction of a second; 3D images display spinning hearts and cutaway views of the coronary arteries with astounding clarity. Turf wars that were a concern with cardiac MRI never manifested themselves, but turf wars may potentially rage again with cardiac CT. What went wrong with MRI?
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Contract Negotiations:
Not Just About the Dollars
By Rich Smith
Contract negotiations with payors formerly were a lengthy process. Not any more; they are concluded now in half the time because payors have stopped telling radiology groups to take it or leave it and, instead, are simply saying, "Take it." Payors seem to hold all the cards in any bargaining over reimbursement rates. Mark Kleinschmidt, CEO of St Paul Radiology in St Paul, Minn, suggests it need not be that way. There are, he indicates, strategies that a radiology group can employ to strengthen its hand at the negotiating table.
One is willingness to walk away from a bad deal. "Unfortunately, most of us don't feel we can," Kleinschmidt says. He also serves as president of Coeur D'Alene, Idaho-based NightHawk Business Services.
"We feel we've got to come away with a deal, any deal, just to be able to say a deal was made. I don't agree with that. A bad deal is a bad deal, and it's not going to help you in the long run to accept it."
— Mark Kleinschmidt
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Trends in Mergers and Acquisitions in the Diagnostic Imaging Sector
By Douglas G. Smith
There is little question, and ample evidence, that merger-and-acquisition activity in the diagnostic imaging business sector has increased since the Deficit Reduction Act (DRA) in 2005, and since Medicare Physician Fee Schedule changes and IDTF Standards changes in 2006 and 2007. Many in the prognostication business have been forecasting some sort of shakeout in the freestanding imaging center sector as a result of the DRA and the implementation of certain regulatory changes affecting IDTFs, as well as certain payor-driven initiatives related to diagnostic imaging services. Specifically, what forms the shakeouts might take has been the subject of diverse opinions and equally diverse actual occurrences.
Some have predicted, with a fair amount of accuracy, that the diagnostic imaging services sector has been, and continues to be, ripe for consolidation. What we should expect over the next several years will depend on recent history and on several factors that will come into play, based on certain assumptions and emerging trends in the industry.
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The Elements of a Feasibility Study
By Cat Vasko
The number of freestanding diagnostic imaging centers opening in the United States has slowed considerably as markets have become increasingly saturated and reimbursement has declined. That's why, more than ever, it is important to consider carefully the feasibility of opening a new center. One way to weigh the potential risks and benefits-and to plan your center's technology investments to maximize its potential-is to use a professionally prepared feasibility study.
"The relative importance of doing your homework has increased substantially. Before you embark upon a project, you really have to understand whether you have a shot at making it work."
— Tim Stampp, MBA, Medical Imaging Specialists LLC, Metairie, La
Elsa Ozuna-Richards, MSA, CMPE, founder and president of REA Healthcare Strategies, Reno, Nev, agrees. "Based on my experience, when those practices that are opening a new imaging facility explore a market and define the needs of that market, they're much more prepared to make capital acquisition decisions and plan service delivery," she says. "A feasibility study identifies those factors for you."
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Contract Evaluations:
The Devil in the Details
By Rich Smith
An adage of the legal profession holds that if you've seen one contract, you have seen exactly one contract. That is never truer than when the contract in question is between an imaging center and a payor, even though 90% of the agreement's language will have been cast from boilerplate used over and over.
Norm Davidson is president of Provider Health Services Inc, a Seal Beach, Calif, firm that performs provider-contract services on behalf of imaging centers, radiologists, and others. "It's the 10% that isn't boilerplate that you have to watch out for, because that 10% of the language is 90% of the importance of the contract," he explains.
"Contracting is a key piece of the health care puzzle. Because so much of an imaging center's day is dictated by the terms of a contract, it's a matter of no small consequence that providers know exactly what is in each and every contract they sign."
— Norm Davidson
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Creating a Blog That No One Will Read
By Steve Smith
A couple of years ago, the CEO of a $100-million company was presiding over a conference call with about 16 senior members of several divisions of the company. The CEO mentioned something that he had written on his blog in order to start a discussion of the topic. What he initiated, instead, was silence. Stunned, he asked, "Is anyone reading my blog?" No one replied.
Prior to writing this column, I took an informal poll of 12 computer-savvy people, ranging in age from 18 to 63. The poll had two questions: How many blogs do you read? What would/does it take for you to read a blog regularly? Based on the CEO's experience, it may not surprise you that not one person in that poll is reading a blog. Some of the answers to the second question were, "the threat of death," "something really, really interesting," and, "information that can help me."
The chances are good that, like the people in this poll, you are not reading a single blog regularly. Just like them, you would require information that served you, so that the blog moved from being an ego-driven rant to a useful tool in your personal or professional life. When I probed further, 10 of the 12 respondents told me that they simply did not have enough time to read someone’s blog, but here is the interesting part: four of them publish blogs.
This questionable anecdotal evidence notwithstanding, I am going to recommend to you that your business begin a blog—even though you are probably not involved in the blog world, and even though Frank Barnako, vice president of MarketWatch, Inc (a subsidiary of Dow Jones & Co), wrote about blogs, “Almost no one reads them.”
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In The News
James H. Thrall, MD, FACR, of Boston, was recently named chair of the ACR Board of Chancellors during its 85th Annual Meeting and Chapter Leadership Conference in Washington, DC, May 17-21, 2008. John A. Patti, MD, FACR, of Lynnfield, Mass, was named vice chair of the ACR Board of Chancellors; Arl Van Moore, Jr, MD, FACR, of Charlotte, NC, was elected president; and N. Reed Dunnick, MD, FACR, of Ann Arbor, Mich, was elected vice president of the ACR.
John (Jack) K. Crowe, MD, of Scottsdale, Ariz, has been named president of the American Roentgen Ray Society. In his presidential address at the recent annual meeting, he cautioned radiologists not to become isolationists, and not to let the image-instead of their skills as physicians-become of foremost importance
Hiroaki Tada has been appointed President & CEO of FUJIFILM Medical Systems USA, Inc, Stamford, Conn. He assumes responsibility for all U.S. sales and service for Fujifilm's Medical Imaging, Science Systems and Non-Destructive Testing (NDT) divisions, including global marketing and R&D for Fujifilm's Synapse® picture archiving and communications system (PACS), as well as for the company's growing women's health care area. With Fujifilm for more than 35 years, Tada was previously president and CEO of Fujifilm Graphic Systems USA, Inc, a position he held since October 2003.
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| INFORMATION RESOURCES |
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Hospitals Turn to Online Auctions for Patient Debt
In a bid to recoup mounting patient debt, some hospitals have begun selling patient debt in online auctions, where collection agencies buy the debt or provide guaranteed payments to hospitals for access to the unpaid accounts. Because auctions can drive up the amount paid for debt, some experts predict that this will result in more aggressively pursuit of patients in arrears.
[Read more]
NPI Spurs Spike in Claims
An article in Modern Healthcare reports a more than fourfold increase in rejected Medicare and Medicaid claims and a doubling of rejection rates for claims processed by Blues plans on May 23, when the federally mandated National Provider Identifier was required. Rejection rates of 24% were reported by an executive of Emdeon Business Services, Nashville, Tenn, representing $25.8 million in claims that were turned down, compared with an average rejection rate of 6%, or $10.6 million, before May 23.
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Number of Uninsured Adults Soars by 60%
Between 2003 and 2007, the number of uninsured adults rose by 60%, from 16 million to 25 million, according to an article on the Health Affairs Web site. The authors used 2007 national survey data to update a 2003 study. In addition, more than two of five (42%) adults ages 19 through 64, or 75 million people, were either uninsured or underinsured during the year as of 2007, up from one-third in 2003.
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MRI Growth Slows to 3%
An estimated 27.5 million MRI procedures were performed at 7,195 sites in 2007, according to a recent census by IMV, Des Plaines, Ill. The figure represents a 14% increase from 24.2 million in 2003, for an annualized growth rate of 3% per year. That figure compares to an annual growth rate of 15% per year from 1999 to 2003. The two highest-volume categories of MRI studies were spine (26% of the total) and brain (25%). MRI breast studies have doubled since 2003, from 314,000 to 645.000, but still account for just 2% of the total.
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Bakersfield Group Adds Site
Truxtun Radiology Medical Group, Bakersfield, Calif, purchased Medical Imaging of Bakersfield from InSight Imaging, Lake Forest, Calif. Terms of the deal were not disclosed. Founded by Girish Patel, MD, who also serves as medical director, Truxtun Radiology now operates five imaging centers and employs 180 people.
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| VENDOR RELATIONS |
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Adaptive CT Scanner Intuits Dose
Siemens Medical Solutions, Malvern, Pa, has received FDA 510(k) clearance to market the SOMATOM Definition AS, which adapts for complete dose protection to any patient's dimensions through Adaptive Dose Shield technology. The scanner, available in 40-slice, 64-slice, and 128-slice configurations, dynamically blocks unnecessary dose, including before and after the spiral scan, ensuring that the only dose applied is clinically relevant.
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PACS Vendor Hits Migration Milestone: 10 Million Studies
FUJIFILM Medical Systems USA, Stamford, Conn, achieved a milestone of 10 million studies in converting legacy PACS to its Web-based Synapse. The company provides turnkey digital-to-digital conversions, including migration and access to prior examinations during the process.
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Remote Archive Solution Adds Mammography
Sourcecorp Radiology added mammography to its Total Archiving Program, which provides the services and IT infrastructure to convert a site's hard-copy file room to digital files. Sourecorp uses Vidar CadPro digitizers and partners with the National Digital Medical Archive, which provides compression and storage.
[Read more]
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| COMING EVENTS |
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JULY
Billing Operations Management Seminar
Sponsored by the Radiology Business Management Association
July 14–15
Hyatt Regency Tamaya Resort & Spa, Santa Ana Pueblo, New Mexico
Topics include preparing for the coming high-deductible environment, managing denials, corporate integrity agreements, billing self audits, detecting the silent PPO, and a Medicare update.
[Register]
Beyond Strategies: Best Practices for Excellence in Outpatient Imaging
Sponsored by GE Healthcare Beyond Program
July 23–25
JW Marriott Pennsylvania Avenue, Washington, DC
Top-notch keynote speakers and seminar leaders will present a variety of topics on trends in health care consumerism, merger-and-acquisition strategy, and marketing/demand management. Keynote speakers include Mark McClellan, MD; election analyst Charlie Cook; and futurist Jeff Goldsmith, PhD.
[Register]
AHRA Annual Meeting and Exposition
Sponsored by the American Healthcare Radiology Administrators
July 27–31
Colorado Convention Center, Denver
The premier educational and networking meeting for hospital radiology administrators features sessions on capital acquisition, innovative physician ventures, budgeting, calculating ROI, legal issues, revenue-cycle management, point-of-service collections, and much more.
[Register]
Process Improvement and Business Excellence in Healthcare
Sponsored by World Congress
July 30–August 1
Chicago
Hospitals, health systems, insurers, and medical practices will convene to discuss innovations in continuous quality improvement, including Lean, Six Sigma, Malcolm Baldridge, and other methodologies.
[Register]
AUGUST
Roentgen Works Seminar
Sponsored by BRIT Systems
August 23
Chicago
This day-long seminar is geared to radiology groups interested in adding remote-reading capabilities to expand their existing businesses. Topics include financial modeling, workflow efficiencies, credentialing, billing, technical requirements, and marketing.
[Register]
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| CORPORATE OFFICE |
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PRESIDENT/CEO
Curtis Kauffman-Pickelle
VP, PUBLISHING
Cheryl Proval
VP, CLIENT SERVICES
Steve Smith
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