In 2005, Lima Memorial Health System (LMHS), Lima, Ohio, was managing its 100,000 imaging studies per year through a traditional hospital–radiologist relationship. LMHS contracted with a 10-member radiology group that handled all of the health system’s imaging, and according to a longstanding policy within the group, each member was paid an equal share of its total earnings. “That’s how the group was built, and that was its approach to doing business,” Bob Armstrong, senior vice president and COO of LMHS, recalls.
As younger radiologists joined the group, however, things began to change. “They brought in younger subspecialists who had expectations of making more money, and that created a lot of tension that began to unwind the cohesion within the group,” Armstrong explains. “There was a power struggle.” In 2006, the group held a meeting and voted to move to a model wherein each radiologist brought home what he or she earned. “When the group finally decided to change the model, it went from 10 members down to five,” Armstrong says. “We once had a very strong group, and now we had a fractured group.”
Armstrong elected to continue working with the halved radiology group, contracting separately with one of the group’s former members, a mammographer, to ensure that breast studies at LMHS would continue to be read. “We wound up with two separate radiology groups,” Armstrong says. Though LMHS was hopeful that the makeshift solution would work, the complaints soon started rolling in, both from the hospital staff and from the radiologists themselves. Before long, Armstrong’s office was fielding three or four complaints per day.
“Lack of coverage was the biggest issue,” Armstrong says. “After the group came unglued, we only had three radiologists on-site. They decided they were only going to do certain things; they were refusing to do procedures they’d done in the past.” He recalls that at least half of the complaints consisted of the two radiology groups attacking one another. “We had one person turn another in to the state medical board,” he says. “That’s how ugly it got.”
A Hybrid Approach
In January of 2007, LMHS gave both groups notice that it would not continue with the current arrangement unless the warring radiologists could find a way to work together again. When it became clear that no such détente was on the horizon, the health system issued a request for proposal for a new radiology group. In the end, LMHS elected to use a hybrid model offered by Franklin & Seidelmann Subspecialty Radiology, Beachwood, Ohio, that would incorporate on-site staff with a team of subspecialists available for remote full interpretations.
“The fundamental premise was that the company would have a network of subspecialists available via its own cutting-edge–technology distribution process, with an on-site component in the form of a radiologist who could handle the bread-and-butter stuff. We knew we needed to have someone here on-site whom our physicians could come down and talk to, and who could handle the procedural stuff radiologists need to do from time to time—as well as interventional-radiology (IR) procedures, CT-guided biopsies, and so on,” Anderson says.
The new business model made sense for a health system the size of LMHS, which handles its share of imaging, but cannot justify hiring a staff of radiology subspecialists. “It was not a decision we made lightly,” Armstrong notes, “but it just makes sense that this is the way to go. A typical radiologist can read 20,000 to 25,000 studies a year. We get enough business for four radiologists, but there are now six or seven different fellowships in radiology you can specialize in, and there’s just no way we have enough business for that.”
Franklin & Seidelmann supplied a general radiologist to act as on-site medical director of radiology, while earlier this year, LMHS recruited an interventional radiologist to help rebuild its IR program. The health system’s former mammographer continues to read breast studies; she contracted with Franklin & Seidelmann to continue doing mammography for LMHS, and now, she reads for several other hospitals in the area. “That’s what she loves to do, and that’s what’s kept her going,” Armstrong notes. “She’s thrilled.”
The New Paradigm
From a financial perspective, Armstrong says, the current arrangement with Franklin & Seidelmann is probably more cost effective than any contract that LMHS could have negotiated with a