Inside the Hospital–Radiology Contract of the Future

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Chad CalendineLuann CulbrethContracts between hospitals and radiology groups are evolving to reflect the shifting requirements of health care—and both parties can expect to continue to see changes, according to Stephanie Krent, an analyst with The Advisory Board. “What we have learned, from speaking with many hospitals and radiology groups, is that contracts need to be individualized to fit the relationship and to reflect current priorities,” Krent says. “It has to be a fluid process, with the contract continually updated to reflect how needs are changing and risk is shifting.” Chad Calendine, MD, CMO of Optimal Radiology Partners (Nashville, Tennessee), notes that radiology groups can be seen as outdated—or, on the flip side, progressive—by their hospitals, based on the service and quality measurements that they do or do not agree to in their contracts. For instance, he says, Optimal Radiology Partners commits to turnaround times of two hours or less for routine studies and 30 minutes or less for emergency-department studies, on a 24/7 basis. “Hospitals focus on metrics such as turnaround time because of its importance to being clinically relevant,” he notes. Standard Measurements Standard measurements often included in today’s hospital–radiology contracts, according to The Advisory Board, include turnaround-time requirements, such as those that Calendine mentions; 24/7 coverage, including interventional coverage; critical-findings compliance; use of voice recognition and self-editing by radiologists; peer review, with findings reported at a predetermined interval (such as a month or a quarter); and availability of subspecialty expertise. “We are seeing an increasing focus on meaningful contracting terms,” Calendine says. Robin Brand, senior consultant with The Advisory Board, adds, “Today’s contract metrics are starting to get at measuring the performance of how the radiology group delivers value to its key stakeholders.” Echoing those sentiments, Calendine points to the relationship of Optimal Radiology Partners with Baptist Hospital (Nashville) as an example of a meaningful, individualized contract. “Baptist Hospital has a very large breast center, and it has a lot of stipulations about the qualifications of mammographers so it can be a center of excellence,” Calendine says. “If the hospital needs something to maintain that designation and those quality levels, that’s meaningful—and it’s an example of the way contracts should be written.” Another example is the use of voice-recognition software by radiologists, which “results in a meaningful cost savings to the hospital,” he says. Luann Culbreth, executive director of medical imaging for Baptist Hospital, agrees. “What Chad Calendine said to us is that it’s not about the number of bodies, but about a demonstrated level of service,” she says. “Our clinicians want a partner in their decision-making processes for patient care; they want the radiologists to be engaged with them. Optimal Radiology Partners has been with us for 16 months, and that’s exactly what our experience has been.” Looking Ahead In the future, Brand anticipates, hospital–radiology contracts will become even more demanding for radiology groups, in reflection of risk shifting to hospitals and health systems. “When you transition to risk-based payment, you’ll see metrics adjust to reflect what will be beneficial to the risk bearer, which may be the provider,” she says. “Eventually, we will begin to see metrics hospitals will track to demonstrate the ability to control costs or affect downstream quality.” Krent says that contracts will also be revisited more frequently, the better to continue raising the bar on service and quality. “Some hospitals will want to revisit their contracts on an annual basis because they will have built in specific metrics, for that year, to reflect system-wide priorities,” she notes. “There will also be more evergreen priorities, including turnaround time, quality metrics, critical-results notification, and others—things hospitals will want to support through incentives for a good number of years.” Culbreth also points to factors that are more difficult to encapsulate in measurements, but that are of growing importance to hospitals and health systems, such as radiologist engagement. “Engagement is just as important as turnaround time,” she says. “It’s difficult, in a hospital setting, because you have the triad of patients—inpatients, acute-care patients, and outpatients—competing for time and the report. Measuring the level of radiologist engagement is challenging.” Proactive Approach Culbreth does have certain indicators for which she looks, however. “It’s a relationship assessment—noticing whether the radiologists are active in the medical executive committee, the quality and safety committees, and the physician capital committee,” she says. “I know that the radiologists from Optimal Radiology Partners are at those critical meetings because I would hear about it if they weren’t, so the measurement is really the relationship being experienced with the hospital and its staff.” Her view reflects Calendine’s assertion that radiology groups should take a proactive approach to contracting, delivering what hospitals need without their having to ask for it. Brand and Krent observe that hospitals will commonly build incentives into radiology-group contracts for meeting certain targets, and they note that some radiology groups are beginning to volunteer to sustain penalties if stated goals are not met. “It’s a way of meeting the hospital halfway and putting some skin in the game,” Krent says. Calendine observes, however, that groups should require neither payment nor penalty to exceed the service and quality standards built into contracts. “Philosophically, the idea that the hospital has to give the radiologist an incentive, financially, to act like a quality radiologist is crazy, and I think hospitals will begin to realize that it’s a sign of dysfunction,” he says. “Groups should not need any additional benefit or penalty to motivate them to do the right thing.” Culbreth says, “Those kinds of problems are why hospitals change groups.” Cat Vasko is editor of and associate editor of Radiology Business Journal.