Building the Business Case for Molecular Imaging
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| Clinical images courtesy of Siemens Healthcare |
Still, the relationship between sound medicine and smart business is not necessarily reciprocal. That is, optimal clinical offerings do not necessarily translate into increased profits. Reimbursement remains challenging, particularly after the draconian 50 percent cuts in PET/CT reimbursement in 2008. While reimbursement is a critical issue, profitability hinges on a combination of factors. As SNM holds its annual meeting this month, experts from large, medium and small facilities weigh in on the business of medical imaging, providing critical input on:
- Building a strong referral base
- Securing reimbursement
- Achieving standardization of care
Building the knowledge base
Most physicians are somewhat familiar with PET/CT, but building a strong referral base requires physicians to graduate from awareness to diagnostic confidence. Ten years after PET/CT’s debut, clinical knowledge of molecular imaging remains a work in progress.
“Specific knowledge of and confidence in PET/CT imaging varies from physician to physician,” says Fred Stuvek, president and CEO of Trident Medical Imaging, which owns and operates six multi-modality outpatient imaging centers in Georgia. “Referrals are an issue in the U.S.,” points out Paul Shreve, MD, medical director, PET Medical Imaging Center, Advanced Radiology Services in Grand Rapids, Mich. He explains, “The number of PET/CT studies that are performed in the U.S. is much lower than the number that should be performed based on the incidence of cancer.”
What does it take to build knowledge and confidence in PET/CT among referring physicians? Successful PET/CT providers are masters of relationship building. Consider for example Diagnostic Radiology Consultants in Chattanooga, Tenn. In 1998, the practice became the first private provider of PET imaging in Tennessee. “I couldn’t convince local hospitals to invest in PET imaging,” recalls Joe Busch, MD, staff radiologist. In fact, local hospitals predicted that the practice would lose $250,000 in its first year of operation. In 1999, Busch stunned the skeptics when the practice earned $20,000 in its first year of business.
How did it happen? There’s no magic formula. Busch visited local tumor boards weekly and today continues to make the rounds of tumor boards at three hospitals. He shared clinical research with referring physicians. As data and clinical confidence accumulated, business grew.
Busch urges his PET/CT colleagues to invest in peer-to-peer marketing with oncology clinicians. “The key to business success is involvement in oncology care; we [PET/CT providers] have to think of ourselves as oncologic diagnosticians.” Today, Busch is the first non-oncologist physician to serve as president of the regional oncology association, enabling him to cement relationships and build the referral base.
Stuvek of Trident Medical Imaging advocates a multi-pronged approach to clinical education. “Time is a major constraint on both sides. We have limited access to referring physicians, and they have limited time to learn about PET/CT.” Stuvek aims for maximum impact with a variety of educational offerings tailored to the needs and preferences of individual physicians and practices. Diverse approaches let physicians engage in learning about molecular imaging in the way that best suits them.
The educational needs of the referring community extend beyond physicians. Front office staff need to understand the basics, including ordering studies, pre-certification and reimbursement. Because PET/CT is fairly new and brings specific and specialized needs, smart practices lend a helping hand to referring office staff by including them in the educational process and assisting them with pre-certification, reimbursement and more.
Clinical education of referring physicians and their staff is important, but it isn’t the only factor in the referral process. Many practices share clinical evidence with referring physicians; however, physicians often make decisions based on anecdotal factors. That is, if the PET/CT study is useful and if helps the referring physician, he is more likely to continue to refer patients. “Studies should be performed optimally with correct interpretations and clear reports,” says Shreve. Evidence indicates that PET/CT report quality is quite variable. In fact, the National Oncologic PET Registry (NOPR) found some reports with little utility to referring physicians. The SNM PET Utilization Task Force aims to remedy the situation with the publication of a PET/CT reporting template at the meeting this month.
Addressing the reimbursement challenge
Reimbursement presents a significant hurdle for PET/CT practices. Initial reimbursement for PET imaging seemed fairly reasonable. In 2004, Diagnostic Radiology Consultants calculated that the practice could break even by performing four PET/CT studies and eight CT studies daily. Fast forward a few years. The Deficit Reduction Act cut reimbursement by 50 percent, approximately doubling the minimum volume required to maintain a practice. “It takes about eight studies a day to break even; it used to be three PET/CT scans,” reports Shreve. Technical reimbursement for PET/CT is relatively low, exacerbating the issue. “Radiologists are paid more to read CTs of the chest, abdomen and pelvis than whole-body PET studies. Plus, most are busy and are not looking for additional work,” shares Shreve. Radiology benefit management companies inject additional stress into the system by increasing the time it takes physicians to refer patients for PET/CT studies. Finally, coverage for PET/CT is fragmented and based on pre-defined indications rather than broad parameters.
Experienced practices meet reimbursement hoops and hurdles head-on. During the business development process, Busch packed his briefcase with academic data and visited every local health insurer to make the case for PET/CT imaging. In addition, the PET/CT evangelist confers with third-party payors to obtain pre-certification on difficult cases. Similarly, Trident Medical Imaging offers referring practices a helping hand in the pre-certification and scheduling processes. “Our staff brings PET/CT know-how, so we try to provide as much support as we can at the different levels of the PET/CT decision-making chain,” says Stuvek.
Smart molecular imaging providers also focus on containing costs. “The biggest threat to expanded PET/CT imaging is additional cuts in reimbursement. We know molecular imaging is in the crosshairs. As providers, we have to employ strategies to reduce our costs and increase our volume,” Stuvek says.
Many experienced providers use the hybrid scanner as a diagnostic CT system to supplement revenue. In the early days of PET/CT imaging, hybrid scanners incorporated single or four-slice CT components. Patients often underwent a PET/CT study and a separate diagnostic CT study.
The advent of higher-slice CT systems opens the door to new, more efficient and cost-effective models. PET/CT practices can complete a diagnostic CT at the same time as the PET/CT study. “It’s one patient visit to one site for one exam,” share Busch. Many smart practices also use the CT component of the PET/CT scanner for routine CT studies, which changes the pro forma and allows practices to break even with fewer PET/CT studies. Trident Medical Imaging embraces the shared service business model and uses its scanner for PET/CT studies in the morning and CT scans in the afternoon. Similarly, daily volume at Diagnostic Radiology Consultants, for example, hovers in the range of 10 PET/CT studies and 30 CT exams. The minimum volume, however, is lower, suggests Shreve, and practices may succeed with as few as three PET/CT studies and 15 diagnostic CT scans daily.
There is a bright side to the reimbursement issue in the U.S.: CMS expanded indications for PET/CT imaging for Medicare patients, which opens the door to new opportunities. (See chart, top of page 8)
The Differentiator: Service
Successful molecular imaging providers share a number of common factors. At the top of the list is a strong commitment to service. The commitment is displayed in multiple ways: careful attention to patient needs, physician-centered reporting and a commitment to standardized care.
PET pioneer Busch created one of the first molecular imaging models in 1998. He focused on the basics, educating the referring community about the value of PET imaging and sharing data with third-party payors. Busch continued to attend to details as he built the practice. For example, the practice realized it made sense to pay for taxi fare to transport some patients to the center. That’s because the cost of a $12 cab ride pales compared to the expense of a wasted radioisotope dose, which amounted to $750 at the time. Similarly, the practice used a “bullpen” model with staggered patient appointments. If one patient couldn’t be scanned, another patient could substitute.
Shreve emphasizes the availability of PET/CT report templates, which help guide the development of useful, physician-centered reports. Templates, however, don’t translate into every practice. In fact, Trident Medical Imaging focuses on tailoring its reports to the preferences of referring physicians. That is, their reports include as much detail as requested for some physicians. Others prefer a concise format. The practice strives to accommodate all preferences while using available templates to ensure completeness and consistency. Trident Medical Imaging also makes use of a Web-based viewing system to share images and reports with referring physicians, with the goal of 24-hour turnaround time.
Similarly, as Busch completes PET/CT interpretation, he focuses on the specific needs of the referring physician. Thoracic cancer surgeons require datasets in three planes which help surgeons understand the level of involvement of the vascular tree and airways. Radiation oncologists require a similar level of detail.
Another ingredient in the recipe for superior service is location. After Diagnostic Radiology Consultants initial PET lease expired in 2004, Busch was forced to go back to the drawing board and secure a new location for the practice. By that point, he had established solid relationships among the oncologic community. “Many oncologists wanted the new PET/CT system close to a linear accelerator. I was determined to find strategic location,” recalls Busch. Ultimately, he relocated the practice to a building in the center of the city that housed seven pulmonologists, a radiation oncologist and a medical oncologist. The results include improved service to area physicians and increased patient convenience.
On the horizon
Molecular imaging will continue to move from the research realm into clinical practice. Providers need to consider future directions as they develop their business model. Busch points to several new business possibilities. “We’re looking at using molecular imaging to follow patients after radiofrequency ablation and at monitoring response to therapy.” Both areas might be a difficult sell for payors; however, he stresses, “PET is not as expensive as continuing a non-effective therapy.”
The emphasis on IT is likely to increase over the next several years. That’s because cancer patients are living longer, which translates into more and larger datasets. “It’s a new image management dynamic,” shares Busch. Smart PET/CT providers will proactively invest in IT and image management infrastructure to support larger datasets.
Shreve adds to the list of business challenges to consider. For example, a number of imaging probes targeted to specific disease processes are in the pipeline and under development. Clinically, disease- or therapy-specific probes expand personalized medicine. The business model, however, becomes much more complex as the cost of specific probes is higher and practices will not be able to take advantage of economies of scale as they can with more generic probes.
The strategic approach to molecular imaging
Successful PET/CT providers share a strong commitment to molecular imaging. The business model is multi-pronged and includes:
- A commitment to comprehensive education of referring physicians and office staff
- A willingness to work with payors and lobby government decision-makers
- The ability to employ standardized care and use templates to guide the reporting process, while also tailoring reports to the needs of referring physicians
- A readiness to invest in IT infrastructure to prepare for the ongoing evolution of PET/CT
- The end results warrant the investment of financial resources and time; with the right approach practices do prosper. In addition, the practice of molecular imaging offers a new professional paradigm, helping radiologists develop a new role—oncologic diagnostician.