Staying Alive: Conquering the Five Top Imaging Center Challenges

In today’s increasingly competitive imaging arena, centers are constantly vying for leadership positions in the markets they serve.
Reimbursement has been top-of-mind for many operators. But there are other concerns operators continually face, including, among others, the number of modalities offered; containing labor costs; controlling information technology expenses; self-referrals and keeping up with technology.
How does an operator meet these challenges? Here is a look at the top five challenges encountered by today’s outpatient’s centers.
Single Versus Multimodality
Physicians seem to be expecting, and payers ultimately requiring, that centers employ multi-modalities including plain film (X-ray) and ultrasound. A recent trend points to payers requiring centers employ multimodality practices to remain on their payer panel. They are also requiring conservative treatment before authorizing expensive magnetic resonance imaging (MRI) or computed tomography (CT) procedures. This often means an X-ray before an MRI. In short, both payers and physicians are showing less tolerance for centers offering only the cream of the crop and more sympathy for those willing to take a loss to earn an MRI.
Most single modality centers often occupy the smallest square footage possible. This poses a problem for those deeming it necessary to add new modalities. Centers entrenched in their current offering have limited space, resources and finances to invest in a low-reimbursing modality.
Many centers are moving administrative offices, break rooms and storage space to off-site locations to combat this. Also, for about $2,500, healthcare space planners can usually rework floor plans and find additional space that center operators never dreamed possible.
Labor Pains
With advancements in imaging modalities and high-tech imaging gadgets comes the need for better-qualified and highly experienced employees. This adds pressures to the labor line across the board. The 2006 Radiology Business Managers Association (RBMA) compensation survey showed that the median base salary in 2005 for center-based managers increased 15.4 percent over the prior years’ median.
There are some solutions to ease labor expense impact. First, consider beginning an internship program with a local radiology school. It affords the operator an opportunity to create a stream of candidates for ongoing positions. The more hiring options a center manager has, the less likely they are to overpay. Next, think about hiring both experienced and less experienced technicians. By developing an internal mentoring program, center operators can quickly acquire talent at a less expensive cost. Also, offering bonus and profit-sharing programs as part the compensation base can add value to a hiring package. This enables employees to share in the benefits when the company succeeds. Lastly, many offices have created assistant tech positions to help with patient setup and post- scanning procedures, such as filming and 3-D post processing.
Paying for IT
Many centers bear the burden of supporting a complete IT solution that encompasses PACS and RIS as well as significant costs relating to storage. In many ways, dealing with film was easier and less expensive. While some of the need for filming has been reduced industry wide, the cost of providing and storing images has not necessarily decreased. Add to that costs relating to maintenance and storage. To help relieve some of the burden of trying to determine which PACS or RIS vendor to hire, a wise place to start may be by calling on imaging centers that operate on the same product platforms. Perhaps they would share their first and last three months of IT expenses associated with running their RIS/PACS. This analysis will better prepare any operator for the shock ahead and can aid in choosing a system in line with the budget at hand.
Outsourcing to an experienced IT company can alleviate IT pricing pressures. Centers often choose the less expensive outside consultants, which may result in larger expenses due to their inexperience. Hiring an in-house IT can also prove more affordable for companies with greater than three imaging centers. Lastly, consider piggybacking on what a competitor may be using. If a competitor’s PACS works and the referring physicians are accustomed, there is no need to reinvent the wheel.
Physician Competition
In the past four years, more physicians have been quick to start their own imaging centers. Physicians have identified what they believe to be a key opportunity to enter the outpatient imaging business and are acquiring their own modalities. This is posing additional competition for locally owned and operated centers and has resulted in considerable reductions in clientele. Obviously, this has impacted bottom-line performance and stagnated growth.
Hospitals, with their strong referral bases, seem to be somewhat immune to this type of competition, but outpatient centers have felt the pain. Many laws are being introduced throughout the country preventing self-referrals. A center administrator should become familiar with their state’s Stark legislation and educate referring physicians looking to purchase their own equipment. Many referring physicians aren’t privy to the Deficit Reduction Act (DRA) and the Pay-for Performance (P4P) legislation working its way through the Medicare system. After explaining the risks and changes ahead, they may find that owning a magnet is not what they envisioned. Through education, many doctors are choosing to opt out from acquiring a 100-percent ownership of an investment that looks to be quite risky.
Technological Advancements
Increased competition from both competing centers and those entering the market has created “Tesla and slice-count envy.” Since open MRI created a niche war within the industry, operators have been trying to one-up each other. Competitive marketing tactics have led to the need to outshine the competition. Often the risk/reward to increase a few slices on a CT scanner or to upgrade from four to eight channels on an MRI does little for the bottom line.
Educating referring physicians that bigger isn’t always better may help curtail the need to upgrade. For example, a 4-slice CT can detect a lung nodule just as well as a 64-slice CT and often provides less dosage to the patient. A center must assess its needs and then weigh the benefits of the various technologies before making a purchase. If competitive centers in local markets have installed or are planning to install a 3T, for example, it may not always be necessary for a center to upgrade to afford the facility marketing advantages and to remain competitive.
It is most important to study the landscape, know the competitors, adhere to technological advancements, control costs and educate those considering entry into the market. These are keys to success in today’s highly competitive and extensively penetrated outpatient imaging arena.