Improving Quality While Boosting Revenue: CMCH Case Study

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When Bill Lawrence became CEO of Central Michigan Community Hospital (CMCH) in Mt Pleasant, in 2008, he began examining options for improving the hospital’s radiology services. Declining volumes, long turnaround times, and lack of specialization were among the issues that had led to increasing dissatisfaction with the hospital’s radiology services. Bill LawrenceAfter reviewing several options, Lawrence chose to outsource the radiology professional services of this 118-bed community hospital to Radisphere National Radiology Group, Beachwood, Ohio, which serves hospitals in more than 30 states; CMCH kept only a radiology practitioner assistant (RPA) on staff. Lawrence shared CMCH’s experience in transitioning to outsourced radiology in a presentation entitled “Core No More” at the Community Hospital 100 meeting in Williamsburg, Virginia, held October 4–5, 2010. Scott SeidelmannImplementing the change wasn’t easy, but the benefits proved to be worth the hassle, Lawrence says. In the first year, CMCH increased its bottom line slightly more than $780,000. “Most CEOs don’t know that there is an alternative to underperforming local radiology practices,” Lawrence says, adding, “If this isn’t the radiology system in the future, I don’t know what it would be.” New Delivery Model Through the years, advanced imaging has evolved, leading to more specialization and the growing need for 24/7 service, Scott Seidelmann, CEO of Radisphere, noted during the Community Hospital 100 presentation. “The problem is the delivery model just hasn’t changed,” he says. As it developed in the 1960s and 1970s, radiology-service delivery typically focused on general radiologists providing interventional radiology services or mammograms, Seidelmann observes; family physicians, internists, obstetricians, and general surgeons were radiology’s most common referrers. Radiology has grown increasingly specialized since then, with new equipment and advanced imaging giving physicians options that didn’t exist previously. Referring physicians have grown to include cardiologists, oncologists, pulmonologists, and emergency-medicine physicians. The radiologists Radisphere hires must meet comprehensive background requirements and pass tests that measure their skill and knowledge. The passing rate for applicants is roughly 50%, Seidelmann says. Radisphere is able to hire radiologists with the background and ability needed to provide subspecialty radiology services—something that most community hospitals do not have the imaging volume to justify. Many hospitals have a local practice that provides two to four radiologists at any given time, but CMCH opted for an RPA, Lawrence says. Seidelmann notes that Radisphere also works with local radiologists so they can provide on-site services as needed. Otherwise, a patient’s exam results are transmitted electronically, with redundancies in place to ensure that no interruption of service occurs. As part of its delivery process, Radisphere also provides hospital administrators and other key personnel with monthly reports containing information not readily available under the old delivery model, Seidelmann says; for example, the monthly report includes numbers for turnaround times, as well as the results of peer review. Implementation Hurdles CMCH has an emergency department that sees more than 27,000 patients per year; the hospital also has a 7,000–square-foot heart/vascular center and a cancer center. Once the decision was made to move forward with Radisphere and outsourcing the radiology department, Lawrence faced the challenge of implementing a new system. A first step was soliciting the opinions and concerns of the hospital’s medical staff. Physicians, for example, were used to being able to walk down the hall and discuss findings with the radiologist. With images being reviewed off-site, that option wasn’t immediately available. The creation of a medical staff steering committee helped guide the changes initially and started an open dialogue with the medical staff during the deployment of the new system, Lawrence notes. The integration of the information systems also needed at least 60 days, Lawrence says, and any issues that arose during the deployment had to be handled. The emergency department, for example, had several concerns, but further research found that many problems existed in the processes and equipment that the hospital already had in place, not with the new radiology-service delivery system. Billing adjustments were needed to ensure that payments could be made for out-of-state radiologists. Benefits Since implementing the new system, CMCH has seen multiple benefits, and “we’ve done no marketing at all, at this point,” Lawrence notes. Those benefits include quicker turnaround time for all imaging studies, he says. CMCH has also seen increased outpatient referrals for MRI and CT services, with the additional CT volume increasing revenues about $444,000, in the first year, and the additional MRI volume increasing revenues about $339,000. Lawrence says that CMCH’s radiology reports have been consistently more detailed, leading to higher satisfaction among medical staff; the improvements in quality have been noted by an oncology physician at the University of Michigan and by physicians in a demanding orthopedics practice. Radisphere also provides quality-assurance data and critical-findings compliance. “I had never seen information like this previously,” Lawrence notes. Bottom-line and quality benefits like these are attractive to hospitals in search of new delivery systems that can help their institutions during an era of health-care reform, Seidelmann notes. Radiology is a key strategic service, and it is one of only a few hospital service lines that can lead to a positive operating margin. “There are a lot of changes coming,” Seidelmann says, “and radiology is in the crosshairs of all of these.” Jane Cys is a contributing writer for