RSNA 2019: Dr. Vijay Rao on why hospital radiology departments must grow to compete

Hospital radiology departments hoping to survive and thrive in healthcare’s volume-to-value era must get creative—and even somewhat aggressive—about growing their outpatient business.  

Or, as put by Vijay Rao, MD, at RSNA in Chicago Dec. 2: “We need to be more entrepreneurial.”

Rao, the immediate past president of RSNA, is senior vice president of enterprise radiology and imaging at Jefferson Health, and professor and chair of radiology at Thomas Jefferson University’s Sidney Kimmel Medical College.

In her talk, “Expanding Radiology Practice to Large Geographic Area,” she told how her institution ballooned from two hospitals to 14 and shared what she’d observed and learned along the way.

Much of the impetus for the deliberate growth spurt came from the phoenix-like resurrection of a formidable set of competitors: freestanding imaging centers.

“When you think of market forces that are driving patients to freestanding imaging centers now, how did we get here?” Rao said. In the early 2000s, she reminded, freestanding imaging centers were booming. Then, with reimbursement cuts spurred by the Deficit Reduction Act of 2005, imaging centers starting closing their doors, pulled back from their expansion plans or were bought by hospitals.

And now the pendulum is swinging once again, she pointed out, as penny-pinching payers steer patients back to freestanding imaging centers.

That’s not to say these centers are nothing but discount shops. “They offer better access for patients and usually more convenient parking that’s often also free,” Rao said. Meanwhile the smaller facility is easier to navigate, and the customer service at freestanding imaging centers “is usually better than that in hospitals.”

Expand or recede—what’s it going to be?  

Rao then walked attendees through some of the particulars of Jefferson Health’s “growth journey,” which began back in ’02 but greatly accelerated four years ago, as volume to value descended on U.S. healthcare economics.

“We are very proud of our diversified and entrepreneurial portfolio,” she said. “Our department covers 12 of our 14 hospitals, and a private group covers the other two. We provide services to several urgent care centers, and we will be opening our seventh Jefferson outpatient imaging center in the spring of 2020.”

But off-campus centers are only a part of the story. Jefferson Health also has added mobile PET/CT services, a mobile CT unit for strokes and professional service agreements to provide professional services to a number of outside imaging centers. The institution’s interventional radiologists provide telehealth consultations. And the entire radiology department does a lot of imaging for clinical trials.

There’s more. The department has entered into three-way joint ventures with freestanding imaging centers and a third-party outpatient imaging consultancy. Plus it has contracted with a radiology benefits manager in a deal that has Jefferson providing consultations on appropriateness of imaging studies.

The latter “has been an amazing source of revenue for us,” Rao said.

United and aligned

As for the recent drive to get large fast, Rao said, the strategy involved managing multiple priorities without losing sight of any.

“Over the last four years, since we started this journey to become a giant health system, if you will, we have integrated our two separate radiology groups into our department,” she explained. “So we have 100 employed radiologists and 30 contracted radiologists. We have greatly increased our efficiency and raised our subspecialty bar.”

Another goal is for all Jefferson radiologists to be able to read from anywhere. 

Meanwhile the department has standardized practices on MRI contrast, showing savings there, while standardizing equipment strategies and rationalizing services.

Much has been accomplished, Rao said, yet many challenges remain.

“Each hospital and health system that joined us wanted to retain their autonomy,” she said. “Their local culture needs to be preserved, so you have to be a little soft around that. You have to kind of blend cultures. And you have to have control of capital, so we do enterprise-wide capital management and planning.”

Rao and another VP are responsible for the capital piece across all 14 hospitals.

“You have to prioritize and be fair and equitable,” Rao said. “And you have to work with employing radiologists as well as working with those who remain in private practices.”

Everyone is expected to play by the rules and, as part of that, “the hospitals cannot have their own profit and loss statements,” Rao said. “If they do, the incentives are not aligned. And we have to look at the bottom line for the enterprise to see where we all are.”

Patients better served

Summarizing her central point, Rao reiterated that a diversified provider portfolio is crucial for growth.

“Expansion of practice outside medical centers helps to improve access for patients closer to home, improves network retention and helps maintain quality of care,” she said.

Along the way, she added, opportunities arise to standardize equipment policies and protocols, and to optimize workflows such that they help drive efficiency across the enterprise.

“Imaging is a port of entry for new patients. It’s a value-add for a health system,” Rao concluded. “People get their imaging here, we make the diagnosis here, and then they come to see physicians within our system to get follow-up treatment.”

If that scenario highlights radiology’s key contribution to its parent health system, she suggested, then marketing and brand-building are critical for hospital radiology departments that recognize the need to compete in the community for outpatient business.