Strategic Imaging Center Technology Deployment

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In the technology-driven field of radiology, it is not just what is installed, but when, where, and why the technology is deployed, according to three experts interviewed by ImagingBiz.com. Many factors drive technology decisions, beginning with the existing competitive environment and inevitably arriving at the Deficit Reduction Act of 2005.

“The most important factor to consider is that technology is not a strategy,” began Kevin Locke, partner, Charis Healthcare, LLC, Hudson, Ohio, a company that specializes in helping hospitals and physicians develop services in the outpatient setting. “Technology is an enabler to allow a strategy to be implemented. In our estimation the strategy needs to be built around market opportunity, strategic objectives, end-in-mind financial objectives, and relationships between physicians, hospitals, and/or other imaging providers.”

One point each expert agreed on is that technology decisions should be predicated on the competitive arena in which a provider is based. But whether a center is new to the market or an established competitor will also impact technology choices, said Richard Townley, MBA, president and CEO, AGI Healthcare Group, San Ramon, Calif, a company that helps hospitals, radiology groups, and imaging center operators reduce costs, improve productivity, and grow revenues.

Townley said technology choices could differ based on the following characteristics:

New center

Existing center interested in upgrading technology

Joint venture, or restructure of a joint venture, in which one of the partners has a higher technology in its system.

An imaging center operator new to a market will feel the most pressure to compete based on technology, Townley explained. If market intelligence reveals that a competitor plans to install a scanner that represents a significantly higher technology than that planned for the new center, then the costs in additional capital, maintenance, and siting should be weighed against the potential loss in volume.

Townley said this dilemma for market newcomers is most pronounced in the 3T versus 1.5T MRI, and 64 channel CT versus 16-channel CT. “In both of those cases, the higher levels of technology are overwhelmingly not necessary in a typical outpatient setting in most markets in the US,” said Townley. “However, because the referring physicians’ perceptions can come into play so significantly, and if we are concerned that these perceptions can hurt us from a volume standpoint, we may look to see if we can somehow put together some of that higher level technology that makes sense from a capital standpoint.”

Existing players, on the other hand, should not feel as much pressure to engage in a technology war that pits 3T MRI against a late-generation 1.5T MRI, or 16 channel CT against 64-channel CT. “We may not necessarily feel compelled to upgrade, because we have already established our service delivery, and we have shown the referring physicians that we are meeting their needs from a clinical standpoint with the existing technologies,” Townley said.

A joint venture in which one of the partners already posses the higher technology in another location can also relieve the need to install the latest and greatest technology, because the provider does not necessarily need to have a redundant system in every point of service. “If we have a joint venture with a hospital and a radiology group, and one of them already has a 3T, then we would not feel compelled to put the 3T in this center,” Townley explained. The strategy in that instance, Townley explained, would involve being able to say to the marketplace that the higher technology exists in the network, and scheduling and triaging accordingly.

Playing the Technology Card
Nonetheless, technology can be a significant differentiator. “You need to be able to differentiate yourself in order to garner an appropriate share of the market so that you can operate a financially successful venture.” noted Tim Stampp, MBA, principal of Medical Imaging Specialists LLC, Metairie, La, which assists radiology groups and hospitals in developing and managing outpatient imaging centers.

But if a center chooses to compete in a given market on the basis of first-to-market with a technology, it needs to be aware that this strategy can be replicated, Stampp said.

“You have to be prepared when you choose to fire a shot over the bow of a competitor by elevating the level of technology,” cautioned Stampp. “You’re