Managing Expectations

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Curtis PickelleEditor Cheryl Proval and I had the privilege of moderating a very interesting and animated session at the recent RBMA meeting in New Orleans, Louisiana. It was a face-to-face panel discussion with the CEOs of each of the five radiology benefit management (RBM) companies. Anticipation built during the conference, and the attendees were definitely ready for their opportunity to grill these CEOs about what they view as the extremely burdensome processes of preauthorization, which have added costs and workload to their practices.

Each panelist was gracious and accommodating in responding to questions, and apart from a very few attendees who rather pointedly took issue with what the panelists had to say, the audience was respectful; it provided intelligent perspectives on the dilemma of how best to control rising costs in medical imaging.

Brandon Cady, CEO of American Imaging Management (Deerfield, Illinois); Curt Thorne, CEO of MedSolutions (Franklin, Tennessee); Cherrill Farnsworth, CEO of HealthHelp (Houston, Texas); Thomas Dehn, MD, CMO of National Imaging Associates (Avon, Connecticut); and Donald Ryan, CEO of CareCore National (Bluffton, South Carolina) fielded a variety of topics and questions that were designed to shed light on the business model, value proposition, processes, and role of RBMs in a health-care arena under extreme pressure to manage imaging utilization. Although they are competitors with each other, there was consensus among the five that the radiology managers had some very good points—chief among them, a suggestion that these five find ways to standardize their processes for the sake of efficiency in the imaging profession.

Kudos to the RBMA for building a framework for conversation with the RBMs, for having the foresight to assemble these leaders, and for providing a forum for a meaningful exchange. Although there was wide disagreement on several of issues, it was apparent that both the RBM organizations and the practices/centers represented by those in attendance are seeking solutions that will protect the status and efficacy of radiology practices, as ever more scrutiny and pricing pressure emerge from the payors.

It became very clear, as the CEOs delved deeper into the rationale for some of their preauthorization processes, that they are acting on behalf of the insurance-company payors for which they are the administrator/vendor for the benefit. Their target is the primary-care practitioner, and the majority seemed supportive of the diagnostic-imaging value proposition.

One point among many caught my particular attention. In response to a rather heated debate about the impact of RBMs on practice economics, Dehn said that the biggest challenge facing radiology practice managers, administrators, and CEOs, in the coming years, will be how best to manage the expectations of the radiologists within their practices. This is in light of the perfect storm of economic changes headed their way.

A couple of statistics that were discussed throughout the day added impact to that statement. One was that there is consensus on the notion that some 20% to 40% of imaging studies are unnecessary—and that is where the RBMs focus their attention and target their reductions. The second statistic discussed among thought leaders was that the most likely reduction in professional-fee reimbursement in the next five years will be 30%: a double whammy.

The view among payors is that a significant portion of imaging is wasted money, and they—in addition—plan on continuing to ratchet down payments for professional fees over the next several years.

Given these two huge changes to the economic portrait of the radiology practice, Dehn is absolutely right: The biggest challenge will be to find how best to understand the impact, to manage expectations among those currently oblivious to this reality, and to take actions, now, that will protect the enterprise for the long term. How can you enhance productivity? What efficiencies can be gained? How can you increase revenue, build customer loyalty, gain market share, and eliminate internal strife? How can you align all of the stakeholders around the idea that everyone will need to be a part of the survival solution?

All of this (and more) will be required, if these predictions are correct. In addition, after listening carefully to the viewpoints of the RBM executives and considering the enormity of the task for providers and payors in eliminating waste and taking cost out