By Michael Bassett
When President and CEO Peter Holden joined Jordan Hospital in 2007, he decided to commit the facility to opening up a breast center. The trouble was that the hospital, located in Plymouth, Mass, about 40 miles southeast of Boston, didn’t have any of the necessary technology.
Within months of taking over, Holden reached an agreement with Alliance Imaging, a provider of imaging services for more than 1,000 customers across the United States, to launch the Breast Health Center. Since then, Holden says, Alliance has essentially become “our technology partner as far as our cancer program is concerned.”
Like many community hospitals, Jordan faced—and still faces—a conundrum: How to optimally invest scarce assets at a time when they are bracing for the ongoing effects of health reform. Today, many hospitals are choosing to outsource certain services like MR and CT, because of the benefits these facilities believe this arrangement provides.
Hospitals also are outsourcing other imaging services like interventional radiology and breast imaging. Solis Women’s Health is one of the more prominent examples of a company that can provide hospitals with these kinds of services. The company was founded more than a quarter of a century ago by Timothy Freer, MD, and has gradually expanded into a network of 23 breast imaging centers across five states.
According to James Polfreman, Solis’s president and CEO, the change from a fee-for-service to one represented by accountable care organizations (ACOs) and pay-for-performance means that providers are under pressure to provide quality service at lower costs. But a hospital has to provide a plethora of services and, as Polfreman puts it, the old adage “jack of all trades, and the master of none” becomes apt, since it’s difficult to be an expert in all areas.
“So a lot of hospitals have outsourced certain services, and we advocate that there is an opportunity to outsource mammography as well,” Polfreman said. “Because in our world, we are low price, high quality, and that’s exactly where insurers want hospitals to go. It’s very hard for hospitals to mimic what we do.”
For Freer, the most important part of a relationship between Solis and the hospitals it partners with is the quality of service Solis provides. “Professional breast imagers are people who are able to do this full time and at high volume,” Freer said. “So what they really bring to the table is not only training they’ve received—when you look at the radiologists at Solis, they’re all fellowship trained—but more importantly, they have multiyear, full volume experience with breast imaging, and a lot of good things come from that.”
For example, Freer points out, the average stage of detection by experienced breast imagers is going to be lower, which will translate into lower mortality rates. In addition, their experience means that they are more knowledgeable than non-specialized radiologists about what a benign condition and normal breast tissue look like.
“I’ve been doing this for 30 years, and I learn everyday something about the different appearance of benign or normal breast tissue,” he says, which translates into fewer call backs because an experienced breast imager isn’t as likely as someone less experienced with mammography to get fooled by what they see.
“So breast imagers are able to get to benign or normal more quickly,” Freer said. “And, of course, the vast majority of patients we are screening don’t have breast cancer. Our job is to get there quickly and efficiently and that translates into lower costs and—more importantly—less harm to the patients because we’re not doing as many unnecessary biopsies and as much repeat testing.”
Financially, there are two big advantages for hospitals in partnering with Solis, says Polfreman. First, Solis should be able to significantly increase the number of patients coming to the hospital for their annual mammograms, “so it’s an opportunity for us to build brand awareness around the hospital.
“Remember, this is a recurring screening test that happens annually, so the patient is being influenced by our brand and the way we treat her,” he points out. If that patient is diagnosed with cancer, Solis wants to make sure she is treated at the partnering hospital, so it works closely with oncologists, breast surgeons, and pathologists to ensure there is a continuum of care for that patient between diagnosis and treatment.
Creating the conditions that underlie a patient’s choice to undergo treatment at the partnering hospital is the second advantage Solis provides, says Polfreman. Often, a conversation between a hospital and Solis begins with the fact that the hospital’s cancer center hasn’t been able to attract as many patients as expected, and that one reason could be that it doesn’t have a very robust breast screening program. “So they’ll look at us as the expert to help them develop that [program],” he says.
In some cases, the results can be very dramatic. Polfreman refers to one example in which Solis partnered with a customer 4 years ago at a point where it was screening 17,000 patients annually. That number has now grown to 42,000 patients. “On that particular campus, we annually diagnose over 350 patients—basically one a day,” he said. “And the treatment for a patient can range from $30,000 to over $250,000 depending on the stage of diagnosis.”
Unlimited Needs, But Limited Resources
“We are your class mid-sized community hospital, and we—like everyone else—struggle as to where you can invest your assets and where you can’t, especially with health reform,” said Jordan Hospital’s Holden. “With all of these new competencies we’d like to bring in to be able to manage the health of our population, it seems like you have unlimited capital needs, but have limited resources.” The partnership with Alliance has enabled Jordan to build up a state-of-the-art cancer treatment program, by, among other things, financing the purchase of medical equipment it needed, but would not have been able to purchase on its own.
“So our patients have immediate access to state-of-the art technology,” Holden said. “And the community as a whole is comfortable with the fact that this state-of-the-art care is immediately available in town.” A hospital’s reputation, he adds, often lies with whether it is considered to be a progressive, technologically advanced diagnostic and treatment facility.
“If the answer is yes, people are going to be more comfortable receiving their care locally,” he said. “If they think you’re a generation behind in technology and competence, they’re going to go right past your door, go up to Boston, and get the more expensive care in an academic setting.”
But health reform is all about providing the right kind of care at the right time and in the right setting, Holden points out, which means it should be provided by the appropriate level of facility and the appropriate physicians. “And primary care community hospitals are a much more efficient bargain in the delivery of 97% or 98% of care than anybody is ever going to need in their lifetime,” he said. “So we have to make sure that care is provided by those local community hospitals and primary care physicians.”
Alliance Imaging’s business model in today’s market, says its president, Richard Jones, is geared toward helping hospitals make strategic decisions about their imaging services, particularly in helping them prepare for what health reform means.
“It’s more about providing our customers with appropriate strategic support, as opposed to just asset-based support,” he said. “Because the challenge today, and going forward, is about efficiency and quality. That’s the leading challenge—as opposed to installing [imaging devices] with the latest bells and whistles.”
Strategic support means, Jones says, helping hospitals understand the particular dynamics of its market. What type of competition do they have in their market? How well aligned are they with their payors and how might that shift over the years as they deal with issues like accountable care organizations or bundled payments? Are they operating efficiently? Are their contracts competitive? And are the services they are providing top class relative to what payors are looking for?
Most customers though, when they first approach Alliance, aren’t really thinking about issues related to strategic support, says Jones. “They may start talking to us because they don’t really fully know what it is that they need in their particular market to be competitive,” he said. “Or they may engage us because of [capital expenditure] constraints and they are looking for a resource that can provide them with technical expertise and equipment.”
Eventually, however, talks turn into a deeper conversation about what is going on in the hospital’s individual market, “because, typically, what we find these days is that the answer [to the hospital’s problem] is not about a particular piece of equipment, but a deeper discussion about the overall competitive position of the hospital.”
Yet, getting access to top of the line imaging equipment—as well as the expertise necessary to run it—is a critical part of the equation for Alliance’s customers.
Milford Regional Medical Center in Milford, Mass, has been working with Alliance for almost 20 years as its MRI provider in two fixed units in its main campus and at the adjacent Dana-Farber/Brigham and Women’s Cancer Center. In addition, the hospital has a mobile service and added PET/CT to the cancer center.
“They’re an expert in the field,” said Edward Kelly, president, Milford Regional Medical Center. “That’s one of the big benefits Alliance brings to the table. If it’s time to upgrade equipment, they’ll advise us effectively about costs, and from a clinical standpoint, they’re a key advisor on how to use what we have, what’s coming down the line, and when we should make those changes.”
Both Kelly and Holden say that while Alliance is providing a contracted service, the working relationships between Alliance and the hospitals on their campuses are extremely close. “What we try to do, not only with Alliance, but with any contracted service, is to really incorporate it as part of our family—almost as quasi-employees,” said Kelly. “This is a Milford licensed service, and we want to incorporate Milford Regional’s culture with Alliance Imaging so that for the patient there is no noticeable difference [between the two].”
There is one obvious disadvantage to outsourcing imaging services, says Holden, and that is, if a hospital has access to enough of its own capital, it can fund and support its own needs. “You don’t have to pay yourself for the cost of capital—it’s your opportunity cost you’re spending,” he said. “With this deal, Alliance gets a return on its investment, and that’s a return you would be able to retain for yourself had you been able to finance it.”
But ultimately, Holden points out, his objective is to obtain the best care possible for his community, “and when I know I can do this faster and better with a relationship with Alliance, well shame on me if I don’t do it.”
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Michael Basset is a contributing writer for Axis Imaging News.
