As we approach the 21st century, radiology continues to evolve into an integral part of the delivery of medical care. Physicians rely on radiologists more, and patients have come to expect, among other services, routine screening mammography and MR examinations for whatever their complaint is or whatever their local sports star is suffering from. On the horizon? The whole body scan replete with virtual imaging/screening, colonoscopy, and assessment of whatever ails the patient from gall bladder to coronary artery disease.
Couple this with the longest economic expansion in the nation’s history and we are in an era where everything looks good: Even the outlook for providers of health care appears to be turning as a quiet revolution emerging in medicine changes the prevailing payor models. The economic climate coupled with a revision of the ground rules of medical care are transforming the landscape of reimbursement. As hospitals, medical centers, and health systems emerge from the failures of managed care, they are beginning to thumb their collective noses at the insurance industry, rejecting proposals that in the past have pushed them to the brink: assumption of risk and shared risk. There is too little fat in the system, and too little appetite among providers to sustain these efforts. Integrated delivery systems and all the varying forms of that model either have crumbled or are rethinking their most recent initiatives.
In the Philadelphia market, the behemoth known as the Allegheny Health Education and Research Foundation has been dismantled by bankruptcy and business practices that have led to criminal and legal investigations that may never be resolved. The vaunted University of Pennsylvania Health System is emerging from annual deficits of $200 million. The radiology department is a microcosm of the medical system: dwindling prestige, loss of intellectual capital, and ongoing battles with members of its health system.
Risk recedes
What does all this portend for radiology? In short, a return to order and perhaps civility. Capitation and other forms of risk assumption are receding in many markets, replaced in some instances by more favorable reimbursement. Medicare recently added 4% to the reimbursement for radiology, and there is relief for hospitals and other providers of care through revisions to the Balanced Budget Act. Other indicators of a reversal? Many of the fledgling brokers of radiology services are out of business, struggling to get their businesses in order, or have changed direction away from risk sharing to a more benign model–assisting the insurance industry, physicians, and radiology practices with managing radiology services.
At the level of individual practices, there continues to be consolidation, not as a reflex to the larger-is-better thought process, but, more important, because it makes sense from a business perspective: Not for the purpose of negotiating contracts with managed care entities, but because economies of scale can be reached in the back office activities of billing, compliance, staffing, and recruiting.
Although it is an employee’s market and jobs go unfilled as salaries escalate, we should not forget that these, among other trends, are cyclical. The future is indeed bright; yet as we gaze into the crystal ball of what lies in store for radiology, we need to be reminded that economic trends both at the national level and within medicine are definitely cyclical and can be hazardous to one’s well-being.
Howard B. Kessler, MD, is chairman of the Department of Radiology, Graduate Hospital. Tenet Health System, Philadelphia, and a member of the Decisions in Axis Imaging News editorial advisory board.
