The divergent interests of radiologists and the hospitals they are supposed to serve has many administrators worried about the profitability of their diagnostic imaging departments.
For most hospitals, radiology remains an important source of income in an otherwise inhospitable payment climate. More than four in five administrators say that radiology is a moneymaker, according to a recent survey by International Radiology Group, a Dallas-based radiology outsourcing company.
Nevertheless, the profit picture could be better. More than two-thirds of administrators said their imaging departments could earn more, if their radiologists were more inclined to play ball.
Administrators fret that all too often their radiologists are unwanted competitors. More than half of responding administrators, or 59%, say their radiologists serve more than one hospital or imaging center. Still, 44% of administrators believe that their institutions are the doctors' top priority, the survey says.
Turning more radiologists into partners is paramount. "If the radiologists don't cooperate, the hospital is literally helpless in increasing the profits from that department," says Mark Bakken, director of business development at IRG.
The stakes are big. More than half, or 56%, of 353 responding administrators surveyed by IRG over the four months ended Jan. 30 said radiology is the largest source of departmental revenues within their hospitals. An additional 18% identified radiology as the second-biggest revenue generator.
But getting recalcitrant radiologists to work with hospitals isn't easy.
That's what Don Daniels, a vice president at the management services organization for SwedishAmerican Health System in Rockford, Ill., found out the hard way three years ago.
After analyzing expenses at the 50-physician MSO, he concluded that radiology costs were too high. "We were paying a little more to our (radiology) group than what we should have been," Daniels explains. He says the cost for an outside group to read films would have paid for a full-time staff radiologist. A careful look at the workload showed, however, that it was only a part-time job. That discrepancy-full-time pay for part-time work-underscored that costs had to come down.
Unfortunately, the incumbent radiology group declined to even consider changing. "Their attitude was that you have no effective alternative," Daniels says.
That lasted until Daniels talked with rival doctors and tested outsourcing some film reviews to IRG. After Daniels showed he was serious, the group came around. SwedishAmerican renegotiated the radiologists' contract in early 1997, and the new deal yielded better service at lower prices. Now Daniels says: "We're extremely happy with our relationship."
As competition among healthcare providers heats up, the details of radiology service have become as critical as its cost. The 9-to-5 work habits of many radiologists simply don't jibe with the round-the-clock approach to healthcare that many system executives say is vital.
At 388-bed University of Massachusetts Medical Center in Worcester, Alan Lucia, director of radiologic services, says that "almost all the issues we have had centered around (radiologists') availability."
And "begging and coercion," Lucia concedes, have been the primary tools administrators had to change the radiologists' ways.
But more recently he has brought some of the slackers to heel directly. He bought them. "We just acquired a group radiology practice because somebody didn't listen to me," Lucia says.
However, that's the exception to the widespread feeling that administrators can't make change stick. A perceived shortage of real options reinforces the historic smugness of radiologists and the helplessness of administrators.
According to IRG's survey, most administrators feel their options are severely limited. Only 8% of administrators said they have a high level of choice in selecting radiology services. Two-thirds of respondents said they had minimal choice and one-quarter said they had only "some choice."
But hardball isn't the only approach to take in turning radiology operations around. Including radiologists in top-level financial decision also can make a difference.
At 647-bed Lehigh Valley Hospital in Allentown, Pa., the head of the independent radiology group serving the hospital participates in the weekly meeting of senior hospital management.
That has helped align the interests of the radiologists with the hospital.
"Our goal is to reduce radiology utilization," says Sheila Sferralla, radiology administrator at Lehigh Valley. Benchmarking data show that radiologists at Lehigh Valley perform more computed tomography, nuclear medicine and ultrasound exams than those at comparable institutions. Against the backdrop of rising managed-care penetration, the hospital and the radiologists are now working together to control utilization and costs.
Radiologists know this will mean reduced income, but they agreed to help, Sferralla says, because they now are privy to the payment pressures driving the changes. That level of radiologist involvement and cooperation is a first for Sferralla, who has worked as an administrator at three other hospitals. By being brought into the inner management circle, the radiologists at Lehigh Valley now understand what's at stake, she says. "It's important to them for the hospital to survive and thrive," she adds.