Part II: Bringing a Technology Plan of Action to a Successful Conclusion

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Devising an imaging-center strategy and choosing a piece of technology take the imaging-center operator only halfway toward the successful conclusion of a technology plan of action: Further decisions and additional initiatives will be necessary before a piece of technology is successfully deployed.An imaging-center operator must determine whether to lease or buy its equipment, although center operators in certificate-of-need (CON) states have an additional regulatory layer that can drive the overall technology strategy considerably. Because a new piece of technology is not only costly but, in many cases, represents an improvement in the community standard of care, a strategy to market the technology is also important.Finally, imaging-center operators are well advised to draft an implementation strategy and assign someone to oversee the process, often given surprisingly short shrift. To Buy or Not to Buy? Debate will always surround the question of buy versus lease, whether the desired object is an automobile or an MRI scanner. Richard Townley, president and CEO, AGI Healthcare Group, San Ramon, Calif, believes that the automobile lease serves as a good analogy when considering finance options in medical technology. AGI consults with hospitals, radiology groups, and imaging-center operators. “The question always comes up: Are we better off with a dollar buyout or a lease?” Townley notes. Although there are different names and terms for a lease, sometimes called a fair-market lease, it effectively has a shorter term than a purchase, Townley says. At the end of the term, the lessor has the opportunity to have the vendor do a significant upgrade and then restructure the lease, or to buy it out at an agreed fair-market value rate or a not-to-exceed rate. Townley professes a neutral position in the debate.“We’ve penciled them out from an economic standpoint both ways,” he explains. “The advantage with the fair-market-value capital lease is you have a lesser payment each month because it is like a car lease, you are not buying all of the car. Unless you pay them a balloon payment, you have to turn the car back in. Same with the MRI, CT, or PET, versus a scenario in which we would have a dollar buyout.” According to Jim Yanci, senior manager, Charis Healthcare, LLC, Hudson, Ohio, which specializes in helping hospitals and physicians develop services in the outpatient setting, hospital clients operating in the outpatient imaging arena primarily are choosing 2- to 5-year leases to avoid technology obsolescence. “From the hospital’s perspective, depending on how much capital they have and how robust the system is, we are seeing a lot of leasing of equipment due to the fact that technology is turning over so rapidly,” Yanci says.Technology obsolescence, however, is not a major factor in the lease-versus-buy decision for Townley, tipping his hand as a fiscal conservative. “Typically, we finance our equipment over a 7-year period, but at the end of the 7 years, you own it,” he notes. “We find that—and this is part of our decision-making on technology—we don’t go with vendors we don’t believe are going to be around strategically, and the upgrade path, the type of equipment you are buying, and where it is in its product life cycle all come into play. Normally, for us, technological obsolescence is not an issue that drives the financing in and of itself; it is just one of those issues.” CON: A State Unto Itself The imaging-center owner that operates in a certificate-of-need (CON) state is subject to specific operating stipulations that are likely to drive technology strategy significantly.Located primarily east of the Mississippi River, CON states differ widely in their specifications, so it is important to research the dollar thresholds and what they include carefully, Townley advises.“State CON stipulations, if applicable, can drive your strategy significantly,” Townley asserts. “You will go with what you believe is necessary to meet the dollar thresholds, which in some states include the equipment, tenant improvements, etc. In other states, there is a $1 threshold on all high-end imaging services. This can be a very political process, and may prompt parties who would not otherwise consider doing so to come together in a venture.”The lower the threshold, the greater the politics, Townley says, so in states where there is a $1 threshold on any MRI, such as North Carolina and Michigan, the process is extremely political. In states where there is a $1-million threshold, particularly if the threshold includes both equipment and tenant improvements, this results in more frequent deployment of used equipment.Townley shares an anecdote about a client in South Carolina that ended up buying a low-field open magnet just to establish a foothold in the market, with a plan to argue for a replacement magnet once volumes had been built to a sufficient level. The $1-million threshold included equipment cost, installation costs, tenant improvements, and all of the costs allocated to that service (including a parking lot and amortization of the waiting rooms and front office), leaving $300,000 for the magnet itself.Townley advises would-be competitors in CON states against trying to game the system. “The states are very sensitive to game playing, so you don’t want to get caught up in that, where you agree to spend—for what would otherwise be a $1-million magnet with a $100,000 annual post-warranty service cost—$500,000 to come in under the threshold and then $200,000 a year for the post-warranty service contract,” he explains. Also beware these additional caveats: Upgrades, even if the Tesla strength of a magnet remains the same, can trigger a CON review. “You are increasing the magnet’s performance and ability to do studies that it would not otherwise have been able to do, so that is considered an upgrade that would trigger the CON review in some states,” Townley warns. In some states, the CON stipulations are applicable to an IDTF but not to a physician group. “They are very specific, very fluid, and very political,” Townley says, characterizing CON stipulations. “We always assume we are going to be challenged by the local hospital, the local IDTFs, whatever. You always have to assume that you are developing under a microscope.” Marketing the Technology All consultants interviewed for this article agreed that marketing new technology is a critical component of a technology strategy. Some equipment manufacturers, in fact, provide marketing assistance to their customers, either as part of the value-added service or as an additional optional component. This marketing support can be extremely valuable in accelerating marketing efforts for a new technology and should be considered in the development of the center’s strategic business plan. The technology itself will determine who should be targeted by the marketing campaign, according to Tim Stampp, MBA, principal of Medical Imaging Specialists LLC, Metairie, La, which assists radiology groups and hospitals in developing and managing outpatient imaging centers. “You can go consumer direct, and you can go to the referring physician,” he explains. “The type of technology you are implementing is going to dictate where you spend your time and money.”For instance, Stampp would not advise a consumer-direct campaign for 3T MRI, but going directly to the consumer would be an appropriate marketing campaign for an open magnet. “The lay person understands open versus closed,” Stampp says. Stampp also would recommend consumer-direct advertising for digital mammography and computer-aided detection, but not for highly technical services that are poorly understood by the public. “Cardiac PET/CT with rubidium 82 is a highly technical service that brings great clinical benefit, but you are not going to get a billboard to say you do rubidium 82 cardiac PET,” Stampp says. “For that, you go out to the cardiology offices and sell it there. Marketing is critical, and the best strategy is to match the marketing to the technology itself.”Townley recommends that the marketing begin well before the technology is deployed and asserts that “everything” counts, including: key personnel (including the radiologists, if subspecialization is critical to the center’s success); the Web site’s presentation; hard-copy collateral materials; and a structured plan for initial and continuing interface between the center’s radiologists and the physicians who will refer to the technology.Yanci urges center operators to remember to “close the loop” in their marketing. If, for instance, referring physicians have been surveyed to understand their technology needs, then be sure to follow up to ascertain that the newly deployed technology has met their needs. This approach enables the center operator to establish a continuing dialogue with the referring physician, resulting in an ongoing referral stream, and Yanci urges center operators to involve the radiologists in this effort.“There are two different survey tools,” Yanci notes. “One is service-based, which usually involves your front-office staff in the timeliness of the scheduling process and report turnaround. Then there is a more clinical or technology-based focus, which, quite frankly, should be done by the radiologists with their peers and the referring physicians, either through a social event or a formal survey process. I think that creates another level of understanding the technology needs in your referring community.” Overlooked and Underestimated Many center operators underestimate the time and resources it takes to implement a technology, Yanci says, explaining that the job is frequently left to the center manager, who generally is too busy to handle the many change-management tasks associated with an implementation. Here again, the marketing support and guidance provided by the imaging manufacturer can be of great value.“You need to have a pretty dedicated FTE, at least full time from equipment selection to first day up and operational,” Yanci says. “It takes a lot of time to coordinate. Whether it is construction or new protocols, people frequently underestimate what it takes to get that done, because typically it’s an imaging center manager who has never done this before, worried about who called in sick and how they are going to get their patients in. It’s a lot of things on someone’s plate to think about, and you really need someone thinking about installing that technology every single day when you are going through the implementation.”Ironically, implementation is one of the most-overlooked aspects of the technology plan of action, Stampp notes. “You have to be prepared to use the tool,” Stampp forewarns. Preparation includes not just training the technologists and the radiologists to use the new technology, but educating the entire team on how the technology will enhance patient care at the facility. “Everyone has to be firing at the same time: on the physician side, that radiologist better be fully educated and trained on that technology so that he knows what it is, how to use it, and how can he help his referring docs clinically,” Stampp says. “The technologist has to know how to push the right buttons and utilize the equipment to the best of its functioning ability. Then the marketing folks have to be prepared and trained to understand what it is and what you are doing, so that they can go out to the physician community and sell that technology.” Stampp continues, “Preparation through education and training is essential. Understand what it is you are doing, the clinical value that it is going to bring back to the marketplace, and how to use the technology.”