Memorial Hospital in Colorado Springs, Colo, is celebrating its 100th anniversary this year. Recently the 477-bed hospital has had a lot to celebrate. It has opened two outpatient centers that provide imaging. A new 90-bed hospital is being planned for the north end of town, and a 107-bed hospital-within-the-hospital children’s facility is being built on the main campus. Both those hospitals are slated to open in 2006.

From left, Tom Kerwin, CIO, Sandy Anderson, outpatient imaging director, and Warren Goldstein, MD, radiology director.

Just a few years ago, things did not look so bright for Memorial. Its radiology outpatients had nowhere to go but the main hospital, and waits to get into the imaging suites were oppressive. Some modalities were being kept open for outpatients until 1 am.

“We were behind the competition in having an outpatient radiology presence,” says Warren Goldstein, MD, president of Radiology and Imaging Consultants, PC, the 12-person group that is contracted to interpret for the hospital. “Patients were waiting hours to get a chest x-ray. We began to get complaints from HMOs and PPOs about the lack of capacity.”

Memorial tried to stop the bleeding by opening a small outpatient center on the hospital campus in 1993. “But shortly after it opened it was at capacity, and people were again being funneled into the hospital where they again experienced long delays,” Goldstein says.

The outpatient crisis was no surprise. Goldstein had come to Memorial in 1982. He says he had been lobbying for years for the hospital to move beyond its inpatient focus to serve outpatient imaging needs. The problem got bad enough that trauma patients were sometimes diverted to a competing hospital in Colorado Springs. Entrepreneurs eyeing Memorial’s backlog began opening imaging centers at many locations in the hospital’s coverage area.

“After a significant amount of pushing on my part, the hospital realized the competition was mounting from both local and national sources,” Goldstein says. “At the exact same time that this was occurring, we were completely overwhelmed by the number of exams we were doing and the lack of available space, for both equipment and film storage.”


It was facing an outpatient crisis, but Memorial had several factors working in its favor. As the city’s oldest hospitalit had opened in 1904 with a student nurse, a supervising nurse, and eight bedsit had a strong foundation in patient care. It was profitable and had always run in the black. As a municipally owned facility administered by a publicly appointed board of directors, it had the ability to issue revenue bonds.

Radiology was not the only area of outpatient care feeling a crunch; space for outpatient surgery was also needed. The hospital administrators, physicians, and board members began to settle on a solutiona new outpatient surgery and imaging center that would shift the bulk of outpatient traffic away from the hospital campus itself. The hospital had possessed the foresight to purchase land at two locations so that it could expand when the time came. The hospital issued $60 million in revenue bonds and the expansion began.

The first expansion site was a mile or two from the hospital on land adjacent to an old Printer’s Union retirement home that is an historic building in Colorado Springs. Dubbed Printer’s Park Medical Plaza (PPMP), the outpatient site opened in May 2001. It is a big facility, three stories and about 280,000 square feet in all. It houses an outpatient surgical center and a 24,500-square-foot imaging center on the ground floor, along with a laboratory and, importantly, Memorial Hospital’s Information Services (IS) Department, which was entirely transferred from the main campus. On the second floor is a large orthopedic practice and a rehabilitation center, along with something not normally encountered in outpatient centers, a school for radiologic technologists (see “A Staffing Source” below).

The construction of PPMP was only undertaken following meticulous planning. Sandy Anderson, RT(R), CRA, is Memorial’s director of outpatient radiology and imaging services. She was one of those responsible for collecting the data and doing the business planning to justify PPMP. She jokingly calls the process “analysis paralysis.”

According to materials provided by Anderson, the business planning included surveying the hospital’s patient base by gender and age group according to zip codes. This was compared to hospital data for outpatient services by modality for those same age and gender sets. This established a base-level projected demand. The plan also looked at Memorial’s imaging growth rates compared to national standards, and at the expected growth in the utilization of hospital services generally. The impact of local competition was also analyzed. Expenses versus revenue projections were developed.

The goal initially was to get 40% of Memorial’s outpatient radiology traffic directed to PPMP. But that goal was quickly expanded. Today, PPMP is doing about 250 outpatient imaging procedures per day, while the number of outpatient procedures per day is down to about 20 at the hospital. That is a transfer of 92% of the outpatient volume.

Almost three and a half years after its opening, PPMP’s actual demand is closely following the projections run earlier. Overall radiology volume has increased by about 8% per year, Anderson says, very close to projections. Now, says Anderson, outpatient waits are being measured in minutes, not hours. Same-day referrals are accepted routinely. “The goal is to get the waits down to 15 minutes,” Anderson adds. “We’re almost there.”

A year ago, Memorial opened a second outpatient center in the north end of Colorado Springs. Called Briargate Medical Campus, it is smaller than PPMP, and is Memorial’s opening salvo in a north end expansion that will include the new hospital due to open 2 years from now. PPMP and Briargate both have been funded out of the original $60 million in revenue bonds. Like all aggressive business expansions, there is risk. Briargate, says Anderson, is too much of an infant to have generated analyzable statistics. Still, Colorado Springs has a metro population of a half million. It is home to the US Air Force Academy, several military bases, two colleges, the US Olympics training complex, and dozens of high-tech businesses. Nestled at the foot of Pikes Peak and the Rockies, it attracts retirees. Memorial’s outpatient expansion fits right in with the city’s growth profile.

Barbara Caro is Memorial’s administrator of radiology and laboratories. She says the outpatient expansion is already paying financial dividends for the hospital, which, according to its web site, has a net operating revenue budget this year of about $400 million. Radiology and pathology are the two “prime income generators” for the hospital, Caro says. Beyond that “the strategy to expand in the outpatient arena has really given us the opportunity to provide optimum outpatient care,” she adds. With no acute care patients and no emergency departments to compete for imaging demand, the outpatient sites provide “a much more congenial environment, softer and less clinical,” she says.

The increase in outpatient imaging volumes since PPMP and Briargate opened has more than offset reductions in outpatient volume at the main hospital, Caro says. Because it is city-owned, Memorial has a mandate to provide indigent care, and it collects less than 50% of its charges, but it still shows a strong profit, Caro says. “Last year Memorial met its financial targets, and we paid out a flat bonus of $1,000 to all FTEs, and part-time [workers received] $500. Some of the people on the lower end of the pay scale were in tears.” This year, with Briargate now open, the hospital’s financial targets have been adjusted upward and may be harder to meet, Caro adds. “We’re on track to meet them, although we’ve had some trouble with costs per adjusted occupied bed.”


In radiology though, some costs have come down. That is because, hand-in-glove with its outpatient expansion, Memorial went filmless as fast as it could.

One big componentperhaps the major componentof Memorial’s outpatient imaging strategy was the installation of a PACS (picture archiving and communications system) linking the main hospital, PPMP, and Briargate. The PACS install is already paying financial dividends, Caro says. “In radiology, our cost of supplies has gone down because we’re not using nearly as much film. Supply costs dropped over $4 per unit of service, which was about a 30% drop in 2003. We’ve seen a steady fall, and this was one of the things we projected would happen with digital radiography.”

By agreeing to act as a show site for its PACS vendor, Memorial was able to save about one third on the cost of the install. Even so, the PACS was expensive. Of the original $60 million in revenue bond funding, Caro says about $22 million went to constructing PPMP. About $13.5 million went to imaging equipment and the PACS. The rest went to Briargate construction, a few smaller projects, and the transfer of Memorial’s entire IS department from the hospital to PPMP.

According to Goldstein, also radiology director at Memorial, the hospital had at first considered retaining its film-based processes when it opened PPMP. But when it looked at the cost of using film, that plan was changed. “We were already running couriers between the warehouse and the hospital to pick up film jackets: just that was a tremendous cost.” The prospect of more couriers going back and forth from the warehouse to PPMP to the hospital was discouraging.

“We really didn’t have any other option than PACS,” Goldstein says. “We had no film storage at the hospital. It was a nightmare. Printer’s was on its own momentum and we realized we should go for a PACS solution. After that, it was a no-brainer to put the PACS into the hospital too.”

Opting for PACS and purchasing the system was one thing. Installing it and getting it to function was quite another. Despite the savings in film, Goldstein says it is “hard to say” if the PACS has improved the radiology department’s profitability. “We stumbled a lot. It was a lot of bruises and a lot of hard work. That changeover was about as brutal as anything I’ve ever done in my life, but we are way ahead of the film game.”

Goldstein says the PACS is essential to optimize radiologists’ time and abilities at the hospital, PPMP, and Briargate. “I would never go back to reading film. As a whole, the radiologists beleive they are much better radiologists in the PACS environment. It’s so much easier to manipulate images, so much easier to look at old comparison studies you may not even have known were there stuck away in some old film jacket. We have become very fluent with soft-copy review. We are so far ahead of where most hospitals our size are.”

But the Memorial radiologists are not as far ahead as Goldstein says he expected them to be at this point in time. “We are close, but the PACS is still not working the way I would like. We’re about 80% there. The problem is that the vendor has a distributed architecture versus a central architecture.”

Part of the problem is that PACS vendors think about images coming from specific modalities instead of where radiologists want those images to be available on a monitor along with  images from other modalities, Goldstein says. “They just did not understand the minutiae of how we as radiologists practice.”

He uses the example of look-up table mismatches, a frequent complaint during PACS installs. “When we bring an image up that is acquired through CR (computed radiography), there is a digital look-up table. The PACS has to be able to match that look-up table.”

There was also the critical factor of how long it took between mouse clicks for an image to upload on the PACS. “I wanted 3 seconds. Now we are at about 7 or 8 seconds, down from 25 seconds at the beginning. You wouldn’t think those few seconds would matter, but we do 700 studies per day.” Do the math and those few seconds add up to 58-plus minutes in the course of a day. That is nearly an hour lost for radiologists who must interpret quickly to stay up with the flow of examinations coming in.

Goldstein says his mantra for the hospital’s PACS is “any image, anywhere, on demand by the radiologist.” He says the PACS still does not function this way because images are not uniformly available at all radiology workstations at the three sites. “We want to be able to look at any image,” he says. “Then you can utilize the specialty training in your group. That’s how we are building our practice, a subspecialized practice that can interpret anywhere.”


Some call it IS; others, like Goldstein, call it IT (information technology). Either way the department that supports the flow of information in a hospital has taken on a new importance in the digital imaging age.

“It is unbelievable all the things you have to get worked out,” Goldstein says. “All of a sudden with PACS you become an IT department. We did not understand when we went into this PACS project how important IT was to us.”

Goldstein says either a radiology department becomes its own IT or the hospital’s IT department has to take on the operation of the PACS. Memorial chose the latter route, moving its entire IT department to PPMP where the PACS nerve center is located. “Years ago, IT basically sent out the bills. Now it’s becoming the backbone for a lot of the clinical areas. In PACS IT, you’re right in the middle of patient care,” Goldstein says.

It is not just responsible for keeping the images flowing; IT is involved in a lot of quality assurance too. “The QA process is even more important with PACS than it was in the days of film,” Goldstein says. “There’s this notion that in the digital world it’s all hands off. But you do the same processes, you’re just doing them electronically. The worklist has got to be correct. One of the main concerns is that images can get lost in the PACS and they’re never interpreted.”

The burden for overseeing the PACS’s operation falls on the shoulders of Memorial’s CIO Tom Kerwin, who has been at the hospital almost as long as Goldstein.

“One of the things that I did not want to occur was to have the radiology department running the PACS and have them all badmouthing us,” Kerwin says. “The PACS technology for us is part of IS. They’re not trying to build their own IS in radiology. We’re all in this together.”

That approach has fundamentally strengthened the relationship between IS and radiology, Kerwin adds. “It’s meant a lot of reformulating of our department. We’ve changed our support level to radiology and assigned dedicated staff to the PACS workstations. The radiologists know the direct extension. We talk to them live.”

Kerwin says he agrees with Goldstein that the Memorial workflow has presented a problem for the PACS vendor that has been hard to solve. The PACS was designed with academic settings in mind, where workstations would be assigned for specific modalities rather than having every workstation take images from all modalities as Memorial wants, Kerwin says. “We are processing. The images are there. Now we need to go from making sure we’ve got the images to making sure that the images go where they’re supposed to go automatically. When it comes to PACS, these vendors need to get out of their modality mind-set. They cannot just do the install and walk away. There is IS too, and they need to learn to do it all.”


The planning, the construction, the PACS, and the other technology all have been key elements in Memorial’s outpatient services expansion plan. But none of it could have happened without the staffing changes to make it happen.

Tom Kerwin says the PACS install has been “one of the more rewarding systems we’ve ever installed.

“When I see a radiologist interpreting and how fast it is, it really raises my personal feeling of self-worth.”

That may be, in a nutshell, Memorial’s approach to staffing its outpatient imaging sites: employee self-worth as the foundation of customer service.

“We were allocated X amount of positions that the financial analysts had assigned to radiology,” says outpatient imaging director Sandy Anderson. “We knew how many positions we would transfer from the hospital and how many would be new positions. We posted all the openings internally and had everybody reapply for their jobs. We were raising the bar on customer service and on our dress code. That was a sensitive issue. It used to be you could wear scrubs or street clothes; now we require all employees to wear uniform lab coats.”

Outpatient imaging asks that its employees be open to flexible scheduling in order to accommodate increased volume in its individual modalities. And after Briargate was opened, they had to agree to rotate working there at specified intervals. “The buttonology is the same at both places,” says Anderson, “but we wanted the rotation so that if somebody was sick, the others would understand the operation.” For instance, peripheral-vascular ultrasound is done at Briargate but not at PPMP, Anderson says.

The other big factor with outpatient care was that the staff has to be very strict on the outpatient side to “make sure that there is insurance preauthorization and that the procedure is a clinical necessity,” Anderson says. “In today’s competitive outpatient environment , you also have to value the patient’s time. We wanted people who were customer service oriented.

Anderson has adopted a system of thank you cards to let employees or supervisors acknowledge special effort on the part of a staff member or physician. It is all part of a rewards and recognition effort that Memorial has undertaken to build employee morale and encourage exceptional performance. The process seems to be paying off, as Anderson says she has lost only one full-time outpatient employee in the past year and very few since opening PPMP more than three years ago.

And Memorial is far from finished with the competition. Still to come are the two hospitals, and Memorial is now in negotiations to purchase and share a mobile PET/CT unit.

The hospital’s radiologists are busier than ever before. “Between all of our sites we’re doing about 750 imaging exams per day,” Anderson says. “But we hit 827 on a recent day.”

That is far more than could ever have been accommodated at the main campus just a few years ago. Memorial Hospital’s outpatient imaging expansion is turning out to be the facility’s most public self-worth project.

Line of Foresight

In Colorado Springs, the distances can be intimidating. When Memorial Hospital moved its outpatient imaging to Printer’s Park, it was going into an area of town where there were no major businesses. “There wasn’t a lot of anything there,” says CIO Tom Kerwin. “There were no fiber-optics at all.”

Yet, Memorial had opted to move its data center to its Printer’s Park site, along with its IS operation.

The price to lay fiber-optic cables into the area would have meant digging a mile or more of trenches. “The phone company was going to make us pick up the tab of over $1 million, and then there would have been the monthly bills,” Kerwin says. “We had to find a more cost-effective way to transfer data, so we did a lot of research on wireless networks.”

Kerwin found that for about one third the money, Memorial could build a wireless data transmission network, and that’s what the hospital did.

“Essentially, you have to have line of sight between the transmitter and the receiver,” Kerwin says. Memorial had a natural line of sight from Printer’s Park to the home campus. When it added Briargate, Memorial had to get the city to let it share a tower to transmit its signals, but that was not difficult because Memorial is a city-owned hospital. The equipment at each location sends and receives.

“It’s not just the PACS, every computer in the hospital is connected to servers this way,” Kerwin says. “The frequency this equipment transmits at is not affected by fog, rain, or snow. We always worry about the weather, but the weather has never affected us. We now have 1,300 physicians that access our PACS over the Internet. To the computers, it all looks the same. They don’t know it’s wireless. There are no recurring monthly expenses.”

A Staffing Source

Memorial Hospital expects to treat more than 360,000 outpatients this year. More than half of these will require imaging. Working with these radiology patients will be a group of technologists who are graduates of a school the hospital has operated for more than 30 years. When Memorial moved its outpatient operation to Printer’s Park Medical Plaza (PPMP) a little more than 3 years ago, the school moved to PPMP too.

Called Memorial Hospital School of Radiologic Technology, the school offers a 2-year, six-semester program at a tuition of about $3,500 per year. It is accredited by the Joint Review Committee on Education in Radiologic Technology and approved and regulated by the Division of Private Occupational Schools in the Colorado Department of Higher Education. Graduates must pass an examination administered by the American Registry of Radiologic Technologists.

Memorial’s radiologists and technologists participate in the program. Each month a Memorial radiologist presents a pathology lecture.

“We are graduating 12 this year,” says Barbara Caro, Memorial’s radiology administrator. “Last year the hospital hired seven of our students. The school has been a great staffing strategy.”

George Wiley is a contributing writer for Decisions in Axis Imaging News.