3 ways for rad practices to survive reimbursement cuts

When the Harvey L. Neiman Health Policy Institute was launched in late 2012, the first policy paper it issued addressed the question of whether the medical imaging growth boom was over.

In looking at the data, the answer was fairly clear: There has been a dramatic and sustained decline in utilization and spending on imaging, highlighted by a series of drastic reductions in Medicare payments for individual imaging services.

A recent article in Radiology Business contained an observation from radiologist Rodney Owen, co-director of Scottsdale, Arizona-based Southwest Diagnostic Imaging (SDI), Ltd, that illustrates the impact these cuts have had on revenue over the last decade.

Reimbursement cuts that began in 2005 when the Deficit Reduction Act went into effect have led to a nearly 35 percent decline in Medicare reimbursements over the last 10 years, according to Owen. Throw in the fact that healthcare inflation has run about 3 percent annually during that time, Owen said, and that decline is more in the 50 percent range.

So how do practices survive in such an environment? Here are three ways, according to the article:

  1. SDI has found that using neuroradiologists rather than general radiologists for neuroradiology MRIs enhances both workflow and quality
  2. Another practice, Minneapolis-based Consulting Radiologists Ltd, has 37 on-site hospital and clinic clients, but has reduced costs though the increased use of teleradiology, while simultaneously expanding its client base
  3. Nashville, Tennessee-based Advanced Diagnostic Imaging has saved several hundred thousand dollars annually by having partnering with several other practices to form a captive health insurance company

There are other steps practices can take to increase profitability, as well, such as hiring competent radiology revenue teams, ensuring the hiring process results in identifying the right employees, and constantly monitoring and examining the costs associated with maintaining and servicing expensive pieces of equipment.

And leveraging cloud technology is yet another way practices are dealing with staffing issues. For instance, David R. Phelps, M.D., president of Radiology Associates of North Texas, told Diagnostic Imaging in spring 2013 that the use of cloud technology has allowed his practice to move readings around its multiple locations from parts of the practice that are overloaded to those that have some unused capacity.

To learn more:
- see the article in Radiology Business