- Email: [email protected]
Focusing on the Big Picture
ACR CHAIR’S MEMO
ARL VAN MOORE, JR, MD
Focusing on the Big Picture Radiology is faced with many challenges these days. We categorize them and look for solutions, and we often focus on micro-level issues since they are typically the issues de jour. For example, the Deficit Reduction Act (DRA), the recent Five-Year Review of the physician fee schedule by the Centers for Medicare and Medicaid Services (CMS), and the now-annual Sustainable Growth Rate (SGR) “fix” that needs to be implemented by Congress are all economic issues that have captured our attention recently as we worked hard to delay or reverse some of these trends. We also are faced with nongovernmental challenges to our profession, some of which we characterize as “turf” while others we categorize as rapidly evolving technology, manpower, 24/7 coverage issues, etc. One could argue that many of these really are short-term issues. The DRA is in place now and any significant changes will require new legislation. Similarly, absent a permanent legislative fix to the SGR provisions of the Balanced Budget Act, we will almost certainly need to continue seeking annual “fixes” from Congress. Unfortunately, faced with looming budget deficits, Congress is unlikely to come up with a permanent fix. Soon we will begin again the process of contacting our respective legislators to ask them for an SGR fix in 2007. This year, different issues will probably vie for our attention and again put us in a reactionary stance. Whether your concern is credentialing, pay-for-performance, tort reform, or something else, it will be easy to take a micro-focus as we deal with these individual challenges. But a question I that I believe that I need to ask is, “Is this the big pic-
ture?” As one of our business managers challenged my group several years ago when we were very focused on an issue that was of minimal long-term importance, “Are we tuning the radio while we are running the car off of the road?” So with the above prologue as a prospective, let’s take a look at the “big picture.” What are the issues that frame this picture? As noted above, there are many matters that compete for our attention, a number of which are economic in nature. While I do not mean to suggest that these issues are trivial, there are other matters on the horizon that will require us to demonstrate that the care we provide our patients meets higher and higher levels of quality standards or measurements. I consider this a “big picture” issue that requires both a long range focus and a continuing and consistent response. Radiology’s approach has been the development of ongoing programs such as pay-for-performance, maintenance of certification, and modality accreditation. Perhaps the next set of challenges for radiology can best be described as technology-driven. Many authors and lecturers have addressed the numerous changes that innovation has brought to our technologybased specialty. The 64-slice CT and 3T MR machines have provided us with more images, faster, and clearer. PACS, voice recognition software, and electronic medical records promise to help make us more efficient and effective. Local teleradiology has provided greater flexibility by moving the diagnostic function out of the reading room. The advances clearly benefit both our profession and our patients and have enabled us to provide care in
© 2007 American College of Radiology 0091-2182/07/$32.00 ● DOI 10.1016/j.jacr.2007.01.004
places and at times that were previously inconvenient, if not impossible, to cover. Some have referred to these advances as “disruptive technologies”, but that is not really accurate. The examples above are actually sustaining technologies that improve quality or efficiency through incremental change. Disruptive technologies change the value proposition in a business sector through fundamental change. They are revolutionary rather than evolutionary. So what are the “big picture” disruptive technologies” facing radiology? There are a number of them, but I believe some changes are happening on such a large scale and at such a rapid pace that many of us may not yet perceive them as threats. This is probably best described as the “disruptive business model.” While I believe there are three basic facets to this concept, space only allows me to focus on one of these concepts. This first facet is represented by the growing number of teleradiology companies that have been spawned in the last several years. This concept is the proliferation and funding of teleradiology companies. It is not simply that these companies exist that is a disruption since they provide a service using a concept of time shifting that helps us provide better care to our patients. The disruption, in my view, is that as these companies grow and look to the public or to venture capital firms for their capital needs, these new, non-physician owners are going to expect to share in any profits resulting from these efforts. The night market is becoming saturated in terms of the number of providers offering nighttime coverage. Therefore, in order to continue 81
82 ACR Chair’s Memo
to “grow the business” these companies are going to have to go after new markets. The only other market that is out there is the daytime market, which dwarfs the nighttime market in both size and, more importantly, economic value. The most obvious growth target is the standard technique of capturing share from other companies in the “nighthawk” business. However, as the night and weekend “off hours” market becomes saturated, this will simply result in shifting the cases between competitors, with minimal net volume growth. The second potential growth target is the foreign market. I am not an economist, but it seems to me this will work only if US radiologists can provide services that match the local providers in both quality and price. This seems unlikely, given the current amount of “nighthawk” business flowing from
the United States to foreign countries, based primarily on price and with no proof of quality. The third and most likely growth target is to shift emphasis and go after the “daytime” market in the United States. Once hospital administrators are convinced that teleradiology is good enough for the 7:00 PM to 7:00 AM period, it should be relatively easy to apply this logic to the 7:00 AM to 7:00 PM shift. After all, the “dayhawk” radiologists will largely be US trained, will be licensed in the states for which they interpret, will often be sub-specialized and can be credentialed in the facilities for which they provide care. This “disruptive practice model” will be a direct challenge to the traditional radiology practice model that remains the norm in many places today. This will be especially true for small groups who may not be able
to offer adequate sub-specialization and round-the -clock coverage. This is just one example of the “big picture” issues I believe we are facing as radiologists. As a profession we need to understand the potential impact of these business models on our practice of medicine. I have challenged your leaders on the Board of Chancellors and the Council Steering Committee to determine how we can keep our profession a vibrant and exciting medical specialty. As part of this process, we will examine how to deal with such disruptive business practices. Although this will not be simple or quick, it is essential to radiology. Will it be easy to face these challenges? No. As President John Kennedy said, “We do these things, not because they are easy but because they are hard” and I would add, “Because it is the right thing to do.”
Arl Van Moore, Jr, MD, Charlotte Radiology PA, 1701 East Boulevard, Charlotte, NC 28203; e-mail: [email protected].
ARL VAN MOORE, JR, MD
Focusing on the Big Picture Radiology is faced with many challenges these days. We categorize them and look for solutions, and we often focus on micro-level issues since they are typically the issues de jour. For example, the Deficit Reduction Act (DRA), the recent Five-Year Review of the physician fee schedule by the Centers for Medicare and Medicaid Services (CMS), and the now-annual Sustainable Growth Rate (SGR) “fix” that needs to be implemented by Congress are all economic issues that have captured our attention recently as we worked hard to delay or reverse some of these trends. We also are faced with nongovernmental challenges to our profession, some of which we characterize as “turf” while others we categorize as rapidly evolving technology, manpower, 24/7 coverage issues, etc. One could argue that many of these really are short-term issues. The DRA is in place now and any significant changes will require new legislation. Similarly, absent a permanent legislative fix to the SGR provisions of the Balanced Budget Act, we will almost certainly need to continue seeking annual “fixes” from Congress. Unfortunately, faced with looming budget deficits, Congress is unlikely to come up with a permanent fix. Soon we will begin again the process of contacting our respective legislators to ask them for an SGR fix in 2007. This year, different issues will probably vie for our attention and again put us in a reactionary stance. Whether your concern is credentialing, pay-for-performance, tort reform, or something else, it will be easy to take a micro-focus as we deal with these individual challenges. But a question I that I believe that I need to ask is, “Is this the big pic-
ture?” As one of our business managers challenged my group several years ago when we were very focused on an issue that was of minimal long-term importance, “Are we tuning the radio while we are running the car off of the road?” So with the above prologue as a prospective, let’s take a look at the “big picture.” What are the issues that frame this picture? As noted above, there are many matters that compete for our attention, a number of which are economic in nature. While I do not mean to suggest that these issues are trivial, there are other matters on the horizon that will require us to demonstrate that the care we provide our patients meets higher and higher levels of quality standards or measurements. I consider this a “big picture” issue that requires both a long range focus and a continuing and consistent response. Radiology’s approach has been the development of ongoing programs such as pay-for-performance, maintenance of certification, and modality accreditation. Perhaps the next set of challenges for radiology can best be described as technology-driven. Many authors and lecturers have addressed the numerous changes that innovation has brought to our technologybased specialty. The 64-slice CT and 3T MR machines have provided us with more images, faster, and clearer. PACS, voice recognition software, and electronic medical records promise to help make us more efficient and effective. Local teleradiology has provided greater flexibility by moving the diagnostic function out of the reading room. The advances clearly benefit both our profession and our patients and have enabled us to provide care in
© 2007 American College of Radiology 0091-2182/07/$32.00 ● DOI 10.1016/j.jacr.2007.01.004
places and at times that were previously inconvenient, if not impossible, to cover. Some have referred to these advances as “disruptive technologies”, but that is not really accurate. The examples above are actually sustaining technologies that improve quality or efficiency through incremental change. Disruptive technologies change the value proposition in a business sector through fundamental change. They are revolutionary rather than evolutionary. So what are the “big picture” disruptive technologies” facing radiology? There are a number of them, but I believe some changes are happening on such a large scale and at such a rapid pace that many of us may not yet perceive them as threats. This is probably best described as the “disruptive business model.” While I believe there are three basic facets to this concept, space only allows me to focus on one of these concepts. This first facet is represented by the growing number of teleradiology companies that have been spawned in the last several years. This concept is the proliferation and funding of teleradiology companies. It is not simply that these companies exist that is a disruption since they provide a service using a concept of time shifting that helps us provide better care to our patients. The disruption, in my view, is that as these companies grow and look to the public or to venture capital firms for their capital needs, these new, non-physician owners are going to expect to share in any profits resulting from these efforts. The night market is becoming saturated in terms of the number of providers offering nighttime coverage. Therefore, in order to continue 81
82 ACR Chair’s Memo
to “grow the business” these companies are going to have to go after new markets. The only other market that is out there is the daytime market, which dwarfs the nighttime market in both size and, more importantly, economic value. The most obvious growth target is the standard technique of capturing share from other companies in the “nighthawk” business. However, as the night and weekend “off hours” market becomes saturated, this will simply result in shifting the cases between competitors, with minimal net volume growth. The second potential growth target is the foreign market. I am not an economist, but it seems to me this will work only if US radiologists can provide services that match the local providers in both quality and price. This seems unlikely, given the current amount of “nighthawk” business flowing from
the United States to foreign countries, based primarily on price and with no proof of quality. The third and most likely growth target is to shift emphasis and go after the “daytime” market in the United States. Once hospital administrators are convinced that teleradiology is good enough for the 7:00 PM to 7:00 AM period, it should be relatively easy to apply this logic to the 7:00 AM to 7:00 PM shift. After all, the “dayhawk” radiologists will largely be US trained, will be licensed in the states for which they interpret, will often be sub-specialized and can be credentialed in the facilities for which they provide care. This “disruptive practice model” will be a direct challenge to the traditional radiology practice model that remains the norm in many places today. This will be especially true for small groups who may not be able
to offer adequate sub-specialization and round-the -clock coverage. This is just one example of the “big picture” issues I believe we are facing as radiologists. As a profession we need to understand the potential impact of these business models on our practice of medicine. I have challenged your leaders on the Board of Chancellors and the Council Steering Committee to determine how we can keep our profession a vibrant and exciting medical specialty. As part of this process, we will examine how to deal with such disruptive business practices. Although this will not be simple or quick, it is essential to radiology. Will it be easy to face these challenges? No. As President John Kennedy said, “We do these things, not because they are easy but because they are hard” and I would add, “Because it is the right thing to do.”
Arl Van Moore, Jr, MD, Charlotte Radiology PA, 1701 East Boulevard, Charlotte, NC 28203; e-mail: [email protected].