Imaging center revenues, budgets cut due to DRA

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IMV Limited interviewed 125 imaging facility administrators throughout the United States to see how they are faring with the Deficit Reduction Act of 2005 (DRA).

A report, titled, 2007 Outlook for U.S. Diagnostic Imaging Centers, provides insight into the actual effect the DRA is having on independent imaging centers around the country.

"We felt this was important, because we weren't aware of anyone else who had gone to the centers themselves," said Mary C. Patton, director of market research for the IMV Medical Information Division. "We asked the people what they thought was going to happen to their own businesses, as well as what they had done to date to try and prepare for the DRA."

Respondents completed a lengthy online survey in March, just months after the DRA took effect. Despite that, many administrators were making long-term changes. IMV found that slightly more than two-thirds of the sample indicated they were taking the most conservative approach possible.

"Many of them have essentially put their capital equipment budgets on hold. One administrator told us they had already closed one of their multiple centers in anticipation of the DRA and another person stated they anticipated closing their only operation at the end of the year, because they didn't anticipate they were going to be able to survive it [the DRA]," said Patton. "They are going to proceed as though the DRA rates are going to remain in effect and they believe that if something was borderline [in] profitability in 2006, it's clear that under the new reimbursement rates it was going to lose money."

Respondents were generally pessimistic about the survival of the weaker players in the market, Patton said. However, many of the centers surveyed were taking steps to improve efficiencies in the business, either through location consolidation, staffing changes, or upgrading existing information management solutions.

"If there is a silver lining, it would be for those who sell PACS and other systems that are geared toward improving efficiencies in the centers," said Patton. "Whether it's more effective billing or less expensive systems for improving any sort of operations, purchases of systems for operational efficiencies are the one exception we saw to the budget freezes."