Imaging center survival tactics
Surviving the impact of recent regulatory changes and competitive environments that threaten many imaging centers took center stage at a round table discussion during this week’s Radiology Business Management Association 2007 annual meeting in St. Louis, Mo. Though the discussion darted from topic to topic, it often settled on ways to cope with declining reimbursements brought on by the Deficit Reduction Act (DRA) and other business realities.
These realities have provoked many small imaging facilities to consider and enter into joint ventures with local hospitals or hospital systems. These types of arrangements can be highly successful and even lucrative, but also involve some risk if they are not coordinated correctly. Joint ventures also can take a long time to negotiate. One round table participant said that it took his imaging center more than two years to negotiate its contract, and even then the hospital wouldn’t "talk turkey until the steel was in the ground" for a new facility called for in the deal. In this particular instance, a radiology shortage pushed the venture forward because of a general belief that the imaging center and hospital could make more money if they worked together.
The consensus at the meeting was that joint ventures work best when they are owned 50/50 with the hospital, and radiologists are empowered to make all decisions. Also, the best joint ventures have hospitals acting as silent partners.
Another attendee opined that making a deal with an "800-pound gorilla," such as a hospital, provided them with the capital to buy new modalities, which they would not have been able to afford otherwise.
In other cases, since a local hospital is often an imaging center’s biggest customer, making a joint venture helps to guarantee referrals.
Yet, joint ventures carry risk if a hospital does not get out of the outpatient imaging business and imaging center ends up competing with it. The consensus was that hospitals should focus on inpatient imaging only, and the imaging practice should be left to control management and billing for the services.
Participating in a joint venture is a way to combat the effects of DRA cuts. Some facilities are considering the option of billing under the tax ID of the hospital to avoid the cuts that do not apply to larger facilities. However, some at the meeting warned that this type of activity, while possibly legal now, would be heavily monitored by Medicare if it becomes too widespread.
Myriad other ways of dealing with reimbursement cuts are being taken, such as "trimming the fat" off operations by cutting personnel hours and evaluating usage statistics. Other tactics include evaluating and streamlining imaging protocols; increasing patient reminders to reduce no-shows; pre-screening MR patients to anticipate and counter slow-downs; getting technologist assistants so that the technologists themselves can focus on their core work; and having chief technologists do timing studies so that workflow modifications are technologist driven.
These realities have provoked many small imaging facilities to consider and enter into joint ventures with local hospitals or hospital systems. These types of arrangements can be highly successful and even lucrative, but also involve some risk if they are not coordinated correctly. Joint ventures also can take a long time to negotiate. One round table participant said that it took his imaging center more than two years to negotiate its contract, and even then the hospital wouldn’t "talk turkey until the steel was in the ground" for a new facility called for in the deal. In this particular instance, a radiology shortage pushed the venture forward because of a general belief that the imaging center and hospital could make more money if they worked together.
The consensus at the meeting was that joint ventures work best when they are owned 50/50 with the hospital, and radiologists are empowered to make all decisions. Also, the best joint ventures have hospitals acting as silent partners.
Another attendee opined that making a deal with an "800-pound gorilla," such as a hospital, provided them with the capital to buy new modalities, which they would not have been able to afford otherwise.
In other cases, since a local hospital is often an imaging center’s biggest customer, making a joint venture helps to guarantee referrals.
Yet, joint ventures carry risk if a hospital does not get out of the outpatient imaging business and imaging center ends up competing with it. The consensus was that hospitals should focus on inpatient imaging only, and the imaging practice should be left to control management and billing for the services.
Participating in a joint venture is a way to combat the effects of DRA cuts. Some facilities are considering the option of billing under the tax ID of the hospital to avoid the cuts that do not apply to larger facilities. However, some at the meeting warned that this type of activity, while possibly legal now, would be heavily monitored by Medicare if it becomes too widespread.
Myriad other ways of dealing with reimbursement cuts are being taken, such as "trimming the fat" off operations by cutting personnel hours and evaluating usage statistics. Other tactics include evaluating and streamlining imaging protocols; increasing patient reminders to reduce no-shows; pre-screening MR patients to anticipate and counter slow-downs; getting technologist assistants so that the technologists themselves can focus on their core work; and having chief technologists do timing studies so that workflow modifications are technologist driven.