Surmounting the Challenges of Radiology-group Affiliation to Achieve Sustainability

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Bill Pickart

In the most recent issue of this publication, I spoke of an emerging business model for radiology practices that want to maintain their independence while making the best use of economies of scale: local and/or regional affiliation. As hospitals and health systems continue to consolidate under emerging payment and delivery models, medical groups that hope to continue serving these customers as independent entities will have to increase in scope and scale to survive.
Nowhere is this truer than for radiology practices, which (in today’s health-care environment) can no longer expect to maintain their hospital contracts without providing true, deep, and broad subspecialty-level service, 24/7, to support health systems’ goals. These goals include improved access, better referring-physician alignment and recruitment, differentiation from competitors, demonstrated quality, and demonstrated appropriateness of care. What’s more, radiology groups need to provide this enhanced service level at a lower price—and are working with less and less reimbursement, to boot.
Ironically, it has been shown, time and time again, that radiology groups are most effective when they are able to remain nimble and entrepreneurial—in short, when they have the characteristics of a smaller-sized group. For that reason, the future business model with the most promise for this profession is affiliation and collaboration, in which multiple radiology groups align around shared service-level delivery, clinical and operational quality, efficiency, and financial performance—while maintaining their autonomy.
This model balances the need to increase in scale with the importance of remaining independent and agile. It’s the best of both worlds, from a strategic perspective, if it can be planned, structured, and executed correctly.
Like any emerging business model, however, the affiliated approach does contain potential hazards. The entrepreneurial nature of many radiology practices means that groups will have to learn to set aside their individual agendas for the sake of the power of the affiliated group entity. Once the affiliation is established, it will need to market itself appropriately to hospital and health-system customers—and will have to be prepared to deliver on its service commitments through innovation and recognized initiatives, as well as to provide evidence of that delivery through the use of powerful analytics, decision-support tools, and published measurements that prove that the group is furthering the goals of the affiliation (and the goals of its customers as well).
Coming to the Table
Based on the early development of collaborative-care models in which our radiology clients have been asked to consider participation in an affiliation (or to lead affiliation efforts), one of the most critical considerations for groups contemplating an affiliation is the availability to the affiliated group of each member practice’s datasets. The informatics and decision-support requirements of the emerging health-care environment will be stringent.
Practices must have access to the data produced by their key information systems, including revenue-cycle management, RIS, PACS, hospital information, scheduling, peer-review, accounting/finance, and any other systems that produce meaningful data that the practice can use to demonstrate added value to each member of the affiliated group, and, more important, its customers. Value, in this case, is defined as the establishment and documentation of favorable outcomes in terms of cost-efficient, high-quality patient care and of hospital customers’ differentiation needs.
Clinical data are also of critical importance because it is the convergence of clinical data that will create differentiation for the affiliation—and confer differentiation upon its hospital and health-system partners as well. By tapping into the reams of information produced by the PACS and the procedural side of the RIS, newly affiliated groups can begin to establish clinical protocols and determine the parameters that they will need to meet in order to be of benefit to their hospitals.
Clinical data will represent more of a challenge for newly affiliated organizations than financial/operational data will. Next year’s implementation of ICD-10 will result in disparities between how new codes are applied. Of course, radiology reports also contain a wealth of information in a nonstructured format that is difficult to derive with any degree of