Sg2: More than 90% of Decade’s Imaging Growth Will Occur in Outpatient Sector
Imaging will grow a respectable but relatively sedate 12% to 14% over the next 10 years, and the vast majority of that growth will occur in the outpatient sector, predicted Michael Silver, PhD, vice president, Sg2, Skokie, Ill, at the 2nd Annual GE Healthcare Outpatient Imaging Center Conference in Washington, a rate roughly one third of the imaging growth rate of the previous decade. Silver identified five major growth areas over the coming decade, including cardiovascular imaging, cancer-related imaging, and neurological imaging. Radiology could see more of what Silver calls broad, “Excel-sheet” cuts to federal health care programs, like those wrought by the Deficit Reduction Act of 2005. The intention of the federal government in enacting the Deficit Reduction Act , Silver maintained, was to decrease the growth rate for imaging and to force a payment volume correction. In effecting that strategy, the government targeted the entrepreneurial and opportunistic segment of the market, which is much more sensitive to growth and payment levels than the hospital market. “They don’t look at imaging in a granular manner at all, it’s a line on the Excel spread sheet,” he explained. “In general, any rapid growth is growth that should be inhibited: They want predictable growth.” Payor Trends Both government and private payors are making a big push toward quality incentives, pay for performance (P4P) initiatives, accreditation, and pre-certification programs. Payers perceive P4P as another tool to decrease the growth of imaging across the market, as such programs impact all players in the market, from physicians to diagnostic imaging centers to the hospital. “Overall, they would like to see more evidence-based discipline and that will be part of the quality programs that we are going to see in the marketplace,” Silver said. Expect CMS to push for national policies on new technologies and techniques, such as its recent actions relative to coronary CTA, Silver said. Creating registries is a strategy that plays the double duty of building evidence and discouraging participation of the original referring physicians who are unwilling to deal with the paperwork, Silver noted. Fraud is a growing target of both CMS and state prosecutors, Silver said. “Their experience with the home health care program investigation in Florida has triggered a complete awareness within a lot of the government agencies that where there is smoke, there is fire,” said Silver. “When they see rapidly growing utilization, they will look for the smoke in terms of where the abuse is taking place in those areas in general. Their strategy to control the growth rate of imaging is to lower the dollars and raise the hurdles for opportunistic or other aspects of imaging.” Private payors are more willing to get more granular in technology assessment, but, on the whole, they also are looking to contain growth. “Following the lead from CMS, they are getting much more emboldened than they have been in the past,” noted Silver. “They are looking very aggressively at pre-certification programs, they are looking at preferred provider networks, and it is probably safe to say that there are no payer executives who will get fired today for proposing more restrictions on imaging or more qualifications on imaging procedures that are done in the marketplace. This is very different than where they were a few years ago, or in the mid-90s, when they got negative feedback on the growth of managed care." Imaging Forecast Nonetheless, imaging volume will grow over the next 10 years, Silver predicted, with outpatient growth significantly exceeding inpatient growth. Total imaging will grow about 12% to 14%; and just 1% of that 12-14% will be due to inpatient growth, Silver predicted. Outpatient imaging growth will occur due to the ongoing shift in care to the outpatient setting coupled with reimbursement shifts, Silver said. Data based on 2005 claims from Sg2 confirms that neurosurgeons, neurologists, oncologists, and orthopedic surgeons are currently leading the way in the ordering of outpatient advanced imaging (MR, CT and PET) per 100 patient encounters at the following rates: Neurosurgery: 40 Neurology: 30 Oncology: 24 Orthopedic Surgery: 22 However, primary care physicians were the source of nearly 50% of all advanced imaging orders, compared to orthopedic surgeons at about 12%; neurologists at about 10%; and oncologists and cardiologists, neck and neck, both near 8%. “Looking at the distribution of orders by specialty, primary care providers are overwhelmingly the largest group ordering MRs, CTs, and PET/CTs,” Silver said, noting that PCPs are being targeted by radiology benefits management companies (RBMs). “Their rationale is that specialists know why they think an MR or CT is necessary for a given patient, but their operating guideline is that most primary care providers don’t have the evidence-based understanding of why an MR or CT may be necessary,” Silver explained. “And that is why they are targeting, more and more, the PC providers. That has implications for your marketing activities and business projections for the future.” Sg2 has identified five growth areas for outpatient imaging over the next 10 years (2007 to 2017): Cancer-related imaging. Cancer-related outpatient advanced imaging will experience a 171% growth in the next 10 years, excluding non-cancer mammography, according to Sg2 projections. A 48% increase in cancer-related visits will boost volume in all sectors of the cancer care continuum, including chemotherapy (38%), radiation therapy (31%), and surgery (24%). An overwhelming 98% of this care will be delivered in the outpatient sector, according to Sg2 projections. Neurological imaging. Sg2 projects a total 19% increase in outpatient neurosciences growth, with a 26% growth in advanced imaging and an aggressive 116% increase in stereotactic surgery procedures. Spine imaging. The total outpatient spine procedures market will grow 37% according to Sg2 predictions. Currently imaging accounts for 74% of all outpatient spine-related procedures; injections account for 20%, spinal procedures account for 5%, vertebroplasty/kyphoplasty contribute 0.5%, and exploration/decompression account for 0.4%. In the next ten years, Sg2 projects a 44% increase in advanced spine imaging; a 93% increase in vertebroplasty/kyphoplasty; a 106% increase in exploration/decompression; an 18% increase in injections; and a 15% increase in spinal procedures. Sg2’s prediction for a 44% growth in spine imaging is lower than it has been in the past because government payors are taking a hard look at spine procedures. “If you think imaging is in the crosshairs, spine imaging is even more so because there is much less evidence for a lot of the spine procedures that are being done in the country,” Silver explained. “There is huge variation in the rate of different spine procedures done in the U.S. depending on where you are in the country. For discectomy there is an eight-fold variation across the country and for spinal fusion there is a 20-fold variance across the country. In general, because of all the attention being focused on spine surgery, the imaging associated with that is probably going to be coming down.” MSK imaging. Sg2 predicts a 46% increase in musculoskeletal imaging. “The good news about that for imagers is that the majority is what we might call sports medicine-related, and that is not paid under Medicare,” Silver said. Cardiovascular imaging. Sg2 predicts a 207% increase in cardiovascular imaging over 10 years. The rate at which coronary CTA is reimbursed will likely determine whether cardiologists or radiologists ultimately claim the market, but radiologists are well-positioned to benefit from the surge in peripheral artery imaging, Silver said. “On the cardiovascular side, and this is the big growth opportunity, as more and more patients survive cancer, as cancer becomes more of a chronic disease, patients go on to develop heart disease as other disease treatments become better,” he explained. “So we project about a 210% increase in cardiovascular-related imaging, and the big growth area for cardiovascular is in peripheral vascular disease. A lot of services are being developed in the marketplace for treatment of peripheral vascular disease over the next 10 years. This series will conclude with Part III in the October edition. Part III in this series focuses on business practices and will be published in the October issue.