Preparing for ACOs: The Radiology Group Evolves

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Kenneth Schwartz, MDIn November, CMS released the final rule for the formation of accountable-care organizations (ACOs), intended to spark a transition away from fee-for-service medicine and toward value-based purchasing. Groups of providers can begin registering as ACOs as early as April 2012, positioning themselves to be paid according to their ability to reduce costs while meeting quality and patient-satisfaction targets.

What this will mean for radiology is not yet clear, but industry thought leaders have noted a risk of commoditization if radiologists are treated as vendors under the new payment paradigm. Kenneth Schwartz, MD, medical director of New York Radiology Alliance (NYRA) in Bedford Hills, says, “Radiologists will be under even more pressure to prove their value—their ability to drive the whole imaging process in such a fashion that patients get the best possible outcomes at reduced cost. They will have to get the patient to the quickest, and most accurate, means of diagnosis, so that the rest of the care team can handle its functions as efficiently as possible.”

What ACOs Need

Though the form that ACOs are likely to take in the years to come remains nebulous, leaders of practices around the country are now tasked with attempting to determine what these organizations will need from radiology to succeed—and what radiology will need to do to work within them successfully.

“The commodity portion of this is just getting the cases read as efficiently as possible, with the best diagnoses,” Schwartz says. “Being able to deliver that reading function in an unsurpassed fashion will help keep the price at a level that will make the radiology portion fit well into the ACO structure, whatever it is.”

If radiology is to avoid being commoditized, however, the profession will have to do more than provide fast and accurate interpretations. “Rather than just sending the cases out to be read, in true commodity fashion, reading results should be integrated with the information clinicians actually need to solve the patients’ problems and move them through and out of the system in the most efficient way,” Schwartz says. “For that, you need the kind of communication and consultation that only on-site radiologists can provide.”

Schwartz adds that a sophisticated IT infrastructure will be necessary for radiology groups to maximize their efficiency while offering lower costs. “The better the IT, the better your final product,” he says. “It translates into being able to go to an ACO and say, ‘We can stay within your radiology budget and return money to the organization, without sacrificing quality and turnaround time.’ I think that’s going to be a very compelling argument.”

The Group of the Future

Of course, IT infrastructure of this kind does not come cheaply—one of many reasons that Schwartz anticipates radiology groups growing in size as new payment models become more prevalent. “I believe very strongly that we are headed for several large, national radiology groups,” he says. His own experience reflects this: “We were originally a large group, with 58 radiologists, and we realized that even though we were big, we weren’t big enough to achieve what we needed to in order to continue to be competitive as the field gets tougher and tougher,” he notes.

For that reason, in August 2010, Schwartz’s practice, S &D Medical, joined with Virtual Radiologic (vRad) Eden Prairie, Minnesota, to create NYRA. “What we see coming is very similar to the retail pharmacy market,” he says. “There are no local pharmacies anymore, and the reason they’re all chains now is that prescriptions are cheaper and can be picked up, all at once, from convenient locations. They offer greater value to patients, and I think a similar thing will happen with radiology.”

Larger groups can leverage their shared resources to invest in the infrastructure necessary to provide faster, more subspecialized interpretations, Schwartz says; they can also afford to hire staff to handle some of the more time-consuming aspects of radiologists’ traditional duties, from critical-results delivery to human-resources tasks to dealing with legal and compliance matters. “Every aspect of what we deliver is enhanced by our size,” he says. “It’s easier to practice good medicine when you have that kind of help. It improves both productivity and service, which will be critical for the integrated care sought by ACOs.”