A First-to-market Approach in Charleston

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Imaging Specialists of Charleston opened its doors at a time when most imaging centers were looking for ways to cut costs-and the South Carolina center took an aggressive first-to-market approach, investing in some of the most advanced imaging technology available, including digital mammography and the country's second open 3T MRI scanner. When the imaging center opened in January 2008, it was the first facility in the region to offer a full range of imaging services, from radiography and ultrasound to CT and MRI. The center is owned by an LLC formed by the partners in Charleston Radiologists, PA, which provides professional services. Michael Garovich, MD, president of Imaging Specialists, spearheaded the center's strategy: to win market share by offering comprehensive, top-of-the-line service to referring physicians and patients alike. He spoke with ImagingBiz.com on the risks-and the potential pay-off-of the first-to-market approach. ImagingBiz.com: In the post-DRA era, most radiology groups are watching their technology investments closely. How did you determine that this approach would sustain you? Garovich: The strategy was to offer the most advanced equipment in a patient-friendly environment. We wanted to be very respectful of the patients’ time, get them in and out, and provide a high level of service to our referring doctors by having a turnaround time in minutes, rather than hours or days. At the hospital, they’re trying to cut FTEs, and that affects the level of service they can offer. Since we can control all the steps, we can provide superior service. For instance, the expense of more transcription hours is worth it, because by providing that extra level of service, we get more business. In this time, when most people are circling the wagons and don’t want to buy equipment, we went out and bought a 3T open MRI. It’s great for the patients. It’s faster, it’s higher resolution, and the bore is so open that the patient’s comfort is incredible. If you’re claustrophobic, it’s great. I can’t tell you how many patients who used to need IV sedation can come here now and zip through the scanner. They’re not paying any more for it, and we’re not getting reimbursed more for it, but we believe that if we’re doing a great job, we’ll get more volume. ImagingBiz.com: Is a first-to-market approach important across all modalities, or is it more viable when it comes to advanced imaging technologies? Garovich: We thought it was most important in MRI because it’s a real differentiator for both sophisticated patients and for physicians. Orthopedic surgeons or neurosurgeons really appreciate image quality, but even with other doctors, you can get the message across that if it’s faster, that’s good. You don’t have to understand the physics of MRI to understand that twice as powerful makes a difference. The other critical area was digital mammography. There were only two facilities in town that had digital mammography at the time that we purchased ours. We weren’t first to market, but since we got it, all our competitors switched, and we didn’t stop with that. We have computer-aided detection on both digital mammography and breast MRI. If I were a woman getting a mammogram, I would want every advantage possible. Some people will just go where their doctors say, but others are discriminating, and we want to give them the best that we can. ImagingBiz.com: What high-tech modalities does Imaging Specialists have, and how does your portfolio compare to what’s in the Charleston market? Garovich: We have DR and high-end ultrasound. When we got our open 3T, the Medical University of South Carolina did have an older 3T magnet, but it was one of the first 3T magnets in clinical use, and it was mostly used as a research tool. When we applied for a certificate of need, we didn’t have any problems getting it because our MRI was going to be strictly for clinical use. Since that time, the Medical University has installed a new 3T magnet. As far as digital mammography goes, when we designed the center, there were only two other facilities in town that had it. We have 16-slice CT; most facilities in the area have 4- or 16-slice CT, though there are a couple that have 64-slice CT. The reason we didn’t make that leap to 64-slice was we found that the big utilization for that is detection of coronary-artery disease, and we don’t do too many coronary CT angiography (CCTA) cases. The physicians have not embraced that use of the technology. We decided it was better to put money into the MRI scanner than buy a 64-slice that doesn’t really bring much more to the equation. I think we will get one down the road, however. I think CCTA will catch on eventually. ImagingBiz.com: How will you know when the time is right to upgrade? Garovich: You’ll just know, because doctors will start ordering CCTAs. It isn’t that we haven’t tried to educate them. I think it’s a wonderful test, and I think most people should be getting it in their 40s, or even 30s. That’s the time to start making the lifestyle change. What normally drives these changes is ease of reimbursement. In Charleston, there are all kinds of funny things; for instance, some carriers will pay the technical—but not the professional—fee. Medicare can say, “We think this is as reasonable test, and we’ll reimburse at this rate,” but the local payors can modify that to fit their particular needs. They tend to drag their feet a little bit; where are they going to get the extra money? I believe it’s going to explode in the next year or so. If you read some of the pieces a few years ago about virtual colonoscopy, you see that a lot of people pooh-poohed it. Some of those early studies were very flawed. With patients, if you can show them how effective it is, they are very motivated. ImagingBiz.com: Would the first-to-market approach work in any market? What was it about the Charleston market that led you to believe that it would be a winning strategy? Garovich: I think it was just an overall vision that was somehow galvanized. No one was offering one-stop, state-of-the-art, service-oriented outpatient imaging. There was a niche there—an opportunity—and we saw that with some hard work, we could get it done. We chose the Mt. Pleasant area because there were a lot of people moving in who were a little more sophisticated and tech savvy. We’ve seen that shift from the physician dictating where patients go to patients deciding for themselves. Reimbursement is lower in the outpatient setting, but the patients and physicians are getting better technology and better service, and they’re getting it for less money. Everyone’s health care dollar is important to him or her. If you’ve got a 20% copayment on your insurance and a scan costs $1,000 at one place, but $600 at another, that’s a big difference. ImagingBiz.com: Who, in your marketplace, do you consider competition: freestanding imaging centers, hospitals, or academic centers? Garovich: We don’t have many outpatient imaging centers, and even fewer that are full service. Most of the outpatient imaging was done at the hospitals, and hospitals serve so many masters that it’s hard to serve anyone well. We don’t have those issues. We had one outpatient imaging center that was full-service, but it decided mammography wasn’t cost effective, so it quit doing mammograms. That really hurt it, because I think a lot of people decided not to send it patients in other areas anymore. You have to take the good with the bad. Mammography may not be a lucrative side to the practice, but if you look at the big picture, it’s important. It’s kind of like owning a home. You take pride in your palace, even if it comes with some headaches. This is our palace. There’s no one else to blame for our shortcomings or successes. ImagingBiz.com: How do you communicate your technological advantage to referrers and the community? Did you have any assistance in devising your message, or any operational support? Garovich: Medical Imaging Specialists (Metairie, La) was instrumental in developing this project with us. We tapped into their expertise quite heavily, and from what I can tell and what I’ve seen in my experience, we are unique. We also had to make the public aware of what we were doing, so we sponsored some events and then implemented a full-blown marketing plan as we got closer to opening. We knew most of our patients would come from our referring physicians, but we also were sure to direct some marketing to the public, because there is a certain segment of the population in which people educate themselves, using the Web, on what they’re about to have done. On our Web site, imagingsc.com, patients who saw our commercial or literature could go online to learn more. We also made ourselves available to local television shows; we were on health segments on news shows and Low Country Live, a local-access show that always has medical content. We had focus groups to find out what women in the community thought was important, because women control their family’s health care choices. What came out of that was that imaging was serious to them; they wanted service, comfort, and high quality. What was really surprising to me was that cost was a lesser concern—not that they wanted to pay excessively, but they were willing to pay for quality. ImagingBiz.com: What is the next technology investment you hope to make, and why? Garovich: We’ll eventually put a PET/CT scanner in, and I think we’ll eventually go to either 64- or 128-slice CT once the reimbursement falls into place. I’m shocked the cardiologists haven’t embraced the 64-slice CT, but I think that paradigm will change. As the price comes down and the number of detectors goes up, I think people will move to 128-slice CT.