Dollars & Sense: Keeping Your Practice Financially Viable
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The politics of radiology
Service issues, including responsiveness to referring physicians and radiology practices not aligning themselves with the goals of the hospital, as well as competition with other radiology groups can be to blame for why radiologists may lose their contracts with hospitals, says Lawrence R. Muroff, MD, FACR, CEO and president of Imaging Consultants in Tampa, Fla.In addition, diminishing reimbursement is impacting outpatient radiology even harder, he says. “If the radiologists have an office, they are more apt to be impacted and will be impacted to a greater extent.” By situating themselves into the medical, social and political fabric of the hospital and community, radiology practices can work to overcome these obstacles, as well as maintain fiscal viability, Muroff opines. Developing relationships with key referring physicians, serving on hospital boards and running for medical staff office are ways in which radiologists can preserve their contracts, as well as prevent “turf erosion.”
Muroff explains that by becoming an integral part of the hospital, radiologists will become “far more resistant to being replaced. I personally have never heard of a radiology practice losing its contract if a member of the practice was serving on the board of a hospital,” he says. “It’s very difficult for a hospital administrator to fire a board member.”
In addition to networking, radiologists must keep in mind that they are a part of a service specialty, and providing high-quality service to their patients and referrers must remain the top priority, says Muroff.
To help radiologists forge better alliances with hospitals, the American College of Radiology established the Task Force on Relationships Between Radiology Groups and Hospitals and Other Healthcare Organizations. In a report released by the task force in June, it recommended, “Radiologists must rededicate themselves to the concept of service. Radiologists must be more visible to patients, referring physicians and the hospital administration… This can entail expanded hours of onsite coverage, a greater number of available radiologists, more subspecialization, and greater opportunities for consultations with referring physicians and their patients.”
Patients & payors
Geoffrey G. Smith, MD, president of Casper Medical Imaging Radiology Group in Casper, Wyo., believes that patient mix and payor types have much to do with diminishing reimbursement, noting that Medicare’s current reimbursement reform is focusing on outpatient settings.“If the radiology practice or outpatient imaging center is in an area with a high number of indigent patients and these patients are serviced as outpatients, then groups might actually see improved reimbursement due to coverage of previously uninsured patients,” says Smith. “But a lot of that has yet to be seen,” regarding the current healthcare reform in the U.S.
For radiology practices that maintain separate outpatient facilities, relationships established within the local marketplace, including referring physicians remain crucial, explains Smith. And as for hospital contracts, differences of opinion in how patients should be served can play a large role in the disbanding of a contractual agreement between the radiology group and the hospital.
To avoid these pitfalls, get involved in the governance of a hospital organization or allowing a hospital administrator to become “part and parcel within the imaging center,” says Smith. While networking may not be the complete solution to navigating away from these hazards, it can help, he advises.
In addition to networking, three main principles reign supreme for radiologists to preserve the integrity of their practices. “Be available, be affable and be able, in that order,” advises Smith, drawing from advice a consultant gave him while he was a resident, which he says has been reinforced by his own experience.
Perhaps most importantly, “radiologists should know in a general sense where their patient volumes are coming from, how those patients are reimbursed and what the payor mix is,” says Smith, noting that this information allows the practice to “make business decisions based on actual data, instead of just a subjective feeling.”
Taking off the blinders
It’s no secret that reimbursement cuts have most seriously impacted outpatient radiology, notes Richard B. Gunderman, MD, PhD, of the department of radiology at Indiana University School of Medicine in Indianapolis. And thus, it is key that radiologists and administrators remain focused on excellent service and earnings contracts and referrals.“Sometimes, we radiologists focus our attention to largely detecting lesions, offering differential diagnoses and the hands-on practice of radiology to the neglect of other important aspects of our professional missions, like building relationships with referring physicians, hospital administrators, patients and even communities,” Gunderman explains.
“If we are better known to those groups and the contributions we make are better understood and appreciated, then I think radiology groups are in a less vulnerable position.”
In fact, regular, direct contact with referring physicians and hospital administrators for radiologists is essential. “The idea that the radiologist can just walk through the hospital with blinders on, show up in the reading room and interpret studies all day and then go home, is problematic, and the same could be true for radiologists who work exclusively in outpatient imaging centers,” notes Gunderman.
In addition to networking, the radiologist must resist the temptation to focus on short-term revenue and cost-reduction strategies. They may look good from a short-term perspective, but could turn out to be counterproductive in the medium and long term, says Gunderman, who notes that some practices cut costs by employing fewer residents and medical students, or restrict service on hospital committees because they may view these activities as taking time away from revenue-generating activities, including reading studies. While these may work as short-term solutions, these “relationship-eroding” habits could hurt practices in the long term.
Depending on the local circumstances, Gunderman suggests “striking the right balance between making sure each patient who comes through the radiology department is cared for promptly, efficiently and effectively and being good team players within the larger community of the hospital” to achieve fiscal viability.
A marathon, not a sprint
As healthcare reform brings systemic change, Smith believes that radiology practices must carry out their due diligence to their financial relationships and have informatics capabilities in place, whether internal or external, “to be able to know in a general sense, at least where their patient volumes are coming from.”And in paying attention to financial relationships, Gunderman says that one of the best ways to maintain financial viability is to look up from the gauge on the dashboard of the practice which shows day to day and hour to hour revenue generation, and “look at the broader vista,” in order to identify long term sources of professional fulfillment for radiologists rather than focusing on short term financial issues.
Indispensability is another important feature that radiology practices should strive for in today’s climate. The ACR report notes that “Radiologists must rededicate themselves to the concept of service,” by “being more visible to patients, referring physicians, and the hospital administration.
“We have to make ourselves as valuable as we can to patients, referring physicians, hospital administrators and healthcare payors,” says Gunderman. “It could be that in the short term, our revenue may not increase, but in the longer term it’s the best strategy. I think we need to focus less on short-term financial issues and more on long-term sources of professional fulfillment for radiologists and try to understand as well as we can the real value we contribute to those different constituencies through the practice of radiology.”