Dollars & Cents: Rads Redefine Value

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 - Time for Change

For the last few decades, radiology providers have survived (and thrived) in a volume-driven healthcare market. However, healthcare services and payments are in the midst of a massive upheaval and transitioning from fee-for-service reimbursement to value-based purchasing.

As imaging stakeholders peer into the future and connect the dots from fee-for-value reimbursement to physician compensation, it becomes clear that conventional approaches to productivity, performance and compensation will not suffice. In fact, business success could hinge on incentivizing behaviors that may go against the grain for many radiologists. A handful of thought leaders are suggesting new approaches to performance evaluation, aiming to drive change by quantifying performance measures like community service, collaboration and patient satisfaction.

“If radiology practices wait until the new rules are implemented, there will be a learning curve to implement the desired behavior. We should incentivize it now,” says Richard Duszak, Jr., MD, CEO of the Harvey L. Neiman Health Policy Institute in Reston, Va., which was created by the American College of Radiology to study the role of radiology in evolving healthcare delivery and payment systems.

Consider the typical response to an incidental pulmonary nodule. Despite well-established guidelines for follow-up, many radiologists rely on a personal protocol and issue a blanket recommendation for follow-up imaging. The fee-for-service model encourages this behavior, as there is no incentive to follow guidelines. In contrast, value-based purchasing could embed in the reimbursement formula outcomes, such as improved access, decreased costs and less radiation exposure. The latter approach can discourage inappropriate use.

Reuben Mezrich, MD, PhD, professor and former chair of diagnostic radiology and nuclear medicine at University of Maryland School of Medicine in Baltimore, offers a more immediate rationale for alternate metrics. It’s not uncommon for radiologists to suffer from tunnel vision and get so busy focusing on image review and report generation that they forget about their real job—clinical consultation. Yet, practices face increasing local, regional and global competition, and nearly all deliver adequate image-turnaround services. Successful players differentiate themselves from the crowd.

“Practices have to offer products beyond fast turnaround and report generation. They have to provide service to clinicians, which become a part of the culture of the practice,” says Mezrich.

The trick is incentivizing clinical collaboration. In many situations, one radiologist might act as the practice powerhouse, rapidly reviewing images and churning out reports, while another focuses on reviewing cases with clinicians. The latter service currently does not translate into compensation. “But if you make the clinician happy, he will send you three more cases,” says Mezrich. A holistic, performance-based compensation system that recognizes and rewards such behavior can incentivize more radiologists to prioritize service.   

There are many monikers for these emerging models: team RVU [relative value unit], nonclinical RVU, academic RVU and performance-based incentive compensation. Whatever term is used, a few common threads link these models. “This is a whole new way of managing labor and compensation, distributing work and valuing efficiency,” says Marcia C. Javitt, MD, radiologist at Walter Reed National Military Medical Center in Washington, D.C. In these systems, practices use clinical and performance data from a dashboard, physician report card or metrics to monitor, modify and reward professional activities. The ideal is a flexible and transparent system.


Performance measures at a glance

Educational Symposia. Figures are based on audience responses to questions asked during a pre-meeting workshop at the Oct. 2012 Economics of Diagnostic Imaging 2012 National Symposium.

 - Performance measures at a glance


RVUs: Appealing but flawed

Two separate, but related, issues cloud the question of performance evaluation. “I suspect half of radiology practices have seriously embarked on some sort of physician performance assessment, and most are focused in RVU-based productivity analysis. A minority of groups have started looking at other metrics such as quality, safety and efficiency,” says Duszak.

The RVU is a familiar productivity formula. The Centers for Medicare & Medicaid Services (CMS) determine a relative value for each imaging exam or procedure