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Kyle Salem Connects the Dots - Predictions for the Radiology and Imaging Industries

by Kyle Salem, Ph.D. on Feb 2, 2016

There’s probably nothing I like more than trying to connect the dots in a complex system of things to makeRadiology_Predictions-blog.jpg predictions about future behavior. I had a chance to do this with health care, in general, in a previous post. Now I’d like to take the idea just a step deeper and look at the first of the two areas closest to our business interests – Radiology and Imaging. 

Of course, I could be totally wrong. Everything I write here may be so far off, you might as well stop now and not even bother reading any further. That said, you just might want to continue reading because if I’m right, the results of not paying attention could be disastrous.

I’ve tried to spread the ideas around, so I’ve focused a bit on radiologists, imaging providers, the industry and government. So let’s dive in one-by-one.

Radiologists

This will be an interesting year for radiologists. The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) change to the physician pay formula will push them toward value-based payment, but that’s not something that is clearly accomplished in the radiology world. There is often still a perception that as a radiologist, you should get paid by the number of cases you read. At the same time, as health systems continue to consolidate, they will look to integrate all of the necessary pieces of the system to provide broad-based, capitated care, and this will include radiologists. So my two predictions:

  1. We will see at least one major national IDN either employ or partner with a large radiology group not paid on a volume basis. I’m not saying there won’t be incentives to provide the best possible care and service, but it won’t be tied directly to volume.

    In addition, the radiology group will be considered to be a one-stop provider – there will be no nighthawk, no separate interventional group.  In fact, we may even see a radiology group take responsibility and risk for the operations of the department through a fully outsourced radiology department approach.

  2. Radiology groups will begin to focus on how to meaningfully prove value to health-system executives, and one focus will be on using the cloud to make results available according to the Meaningful Use Stage 3 rules. Notice I don’t say provide value. They now have to PROVE it. Expect the eruption of management systems, greater measurement of workflow metrics, downstream cost savings calculations, and statements of appropriateness. 

    One aspect of this will definitely be focused on the ability of a radiology group to turn around reads and make them available to the patient within the defined timeframe (24 hours) according to the MU Stage 3 rules.

Imaging Providers

We should call this the year of the delay. It’s not that everything will be delayed, but a series of delays have created some uncertainty. Maybe I can clear that up here.

  1. The date for clinical decision support utilization will be set to 1/1/19 (maybe 1/1/18). The Medicare Physician Fee Schedule final rule from this past fall included an indefinite delay to the clinical decision support requirement. While the previous deadline was 1/1/17, CMS determined that not enough providers would be ready and they were not in a position to announce other key program details. They did, however, lay out the criteria for a provider-led entity to set Appropriate Use Criteria (AUC). 

    While it’s not clear what they will choose as the next deadline, what is clear is that no deadline usually means less action. Smart organizations will continue to work toward implementing a CDS system – heck, smart organizations already have – but knowing that the next time a deadline will be set in November of 2017 in the next final rule, it may be a stretch to require compliance in a year. More likely a deadline set at the end of 2016 will be two years out and in the range of 10/1/18 (the government’s fiscal year start) or 1/1/19. Either way, it can’t go much further. The new Meaningful Use requirements need such a system in place, too.

  2. There will be a veiled attack on reimbursement for hospital outpatient radiology. There already have been so many cuts to reimbursement over the years. And we know that we are slipping our way toward value-based medicine, but there are a few key items to watch for a potential hidden cut. Last year, the government revealed the “on-site” rule stating that new hospital outpatient departments had to be within 250 yards of the main building to bill under Hospital Outpatient Prospective Payment System (HOPPS) reimbursement.

    What’s next? I think we definitely see an expansion of this payment equalization push (maybe not this year, but coming soon). We will definitely see the impact of value-based medicine on radiology and it will look like a pay cut to radiology budgets. As health systems start to plan for the new Medicare ACO model with full capitation, they will start to allocate costs at a much lower rate than usual to the performance of radiology exams. This will again force the “more with less” model that we’ve all started to see.

Industry

And the lightning round for the industry; a few items that I think we’ll see with respect to innovation.

  1. Toshiba will be bought by Fuji. The Japanese culture will not allow a private equity group to take Toshiba’s medical division out of the hands of a capable Japanese buyer. The acquisition will slow both organizations and they will fall behind. In time the new Fuji medical will become a major low-end player in the market and likely overtake Philips as the global number 3 behind Siemens and GE.

  2. The ACR will start to recognize the issues with implementing some of their recommendations in the rural environment. The ACR too often errs on the side of protecting jobs and securing the value of those in the field. The problem is that when resources are scarce it becomes too hard to implement new ways of doing things to protect a service line. 

    Take the requirement to have a fully-certified MR technologist, and hopefully two, with every patient in the MR suite itself. This is a noble idea, but finding a certified MR technologist in rural America is hard enough, let alone justifying two. There are new technologies that will allow us to be better, faster and nimbler in the practice of radiology and the ACR will catch on.
  1. Technology will continue to focus on value and not premium, new features – except in nuclear chemistry. There is still a driving need to put better technology in the lower-price-point space, and the industry’s drive to reduce overall costs will dictate more, less expensive equipment. The one exception may be in the development of nuclear tagging agents. The government’s new “moonshot” approach to cancer may ramp up the need to develop targeted agents that can help identify, guide and deliver therapies. This may even lead to a quick expansion of nuclear medicine over the next 5-10 years.

  2. And finally, the rural market will see its first privately-owned ED/imaging center. The outpatient clinic will be right next door, but the continued pressure on certificate of need, declining populations, difficulty keeping inpatient beds open and the wild success of private, for-profit emergency rooms in suburbia will all lead to a new model for rural health and imaging. 

There they are.  Eight predictions of what we’ll see this year in radiology. I hope I’m right…

Nothing here is catastrophic to the industry, but it should make us think about how we form the proper friends and alliances to succeed in the new world in front of us.

 

Meet the Author

Kyle Salem, Ph.D.
President of Cassling

Kyle joined Cassling in February 2005 and was named President in 2017. Kyle holds a doctorate in Biomedical Engineering as well as business education through the Kellogg School of Management. Prior to Cassling, he worked with Siemens Healthcare's Magnetic Resonance Imaging division serving as a scientist and manager.

Today, Kyle strengthens community healthcare by working with customers to ensure Cassling's offerings meet their short- and long-term goals, as well as clinical, financial and organizational needs. With a focus on helping customer increase quality and decrease cost, he manages Cassling's corporate strategy, advising the organization on industry direction and trends to help intelligently drive the growth, while exploring new business opportunities.

Click here to request more information about Cassling's Speakers Bureau or call 800-228-5462 ext. 1117.

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