The administrative team at Advanced Medical Imaging, Lincoln, Neb, includes (clockwise from left) Georgia Blobaum, Marv Peters, RT, and Joe Stavas, MD.

Full-scale, outpatient imaging centers were unknown in Nebraska in the mid 1990s when several of the partners in Radiology Associates first broached the idea of constructing such a facility.

There were reasons why that was so. For starters, major-league imaging centers were considered too expensive for private-practice radiology groups. More significantly, hospitals had a lock on the imaging market, thanks to Nebraska’s iron-fisted certificate-of-need law.

“The hoops and hurdles to obtain a certificate of need were so numerous and difficult to surmount that it was virtually impossible to win approval for projects like outpatient imaging centers,” says Joe Stavas, MD, a partner in Lincoln-based Radiology Associates since 1989.

Realizing the odds were stacked against them, the group decided to forget about the imaging center. However, that was not the end of it. In 1998, the state abolished its certificate-of-need law. Anyone desiring to introduce new medical services to the market could from that time forward freely do so.

Then, shortly afterward, Radiology Associates-at 50 years, Lincoln’s oldest and most prominent radiology group-lost its contract with one of the main hospitals in the market when that institution was acquired by a second hospital with its own preferred group of radiologists. That left Radiology Associates with only one major local hospital contract. The financial impact was devastating: projected revenues immediately plummeted to barely half of what they were the previous year.


In reaction, the discussion about launching an imaging center was hastily resumed.

“We saw the imaging center as our only hope for generating the revenues necessary to save our 11-doctor group from having to disband,” says Stavas. “Furthermore, we knew an imaging center of the scope envisioned would ultimately benefit our community and raise the imaging technology bar higher than it had ever been. It became an imperative that we move ahead with this project.”

Radiology Associates produced a pro forma showing the contemplated imaging center would be economically viable within a year’s time. Excitement within the group was at an all-time high.

But there was a problem. Politics. It became evident that launching an imaging center would not win Radiology Associates any points with the hospital that was its last remaining big customer. Such a facility, the hospital protested, would take away imaging business.

“The choice was to build the center and possibly lose the hospital contract, or keep the hospital happy by not building the center,” says Stavas. “Either way, we’d be out of business.”

Radiology Associates sought to allay the hospital’s fears and, at the same time, gain its blessings for the venture by outlining the direct and indirect benefits that would accrue to the hospital were the imaging center to be built. The strategy worked.

“We took the position that our imaging center would not be a competitive threat to the hospital,” says Stavas, who, in an aside, notes that joint venture ideas between the hospital and radiology also were explored but did not come to fruition. “We explained that, yes, the imaging center would take away hospital business, but from the hospital’s competitors only. For our hospital, it would bring them new business, business they had not ever seen before. Because we had developed relationships with many of the referring physicians who had been using the rival hospitals’ services, we felt we were in a strong position to encourage them to begin using instead the services offered by our hospital and to admit their patients there whenever we diagnosed problems serious enough to require hospitalization. Further, we promised our hospital that we would not actively market our imaging center services to the hospital’s own physicians.

“And, indeed, since our opening, the hospital’s overall radiology volumes have increased. The hospital has an excellent administration, and both of us have left the door open for the future.”

The imaging center Radiology Associates envisioned would be every bit as consumer-friendly as it was state-of-the-art.

“Included in our plan was a wing dedicated to women’s radiologic services,” says Stavas. “We called for it to offer mammography, stereotactic breast biopsy, bone densitometry, and ultrasound. We specified that it be furnished and decorated to appeal to women’s tastes. Even open-backside gowns would be banished in favor of soft, fluffy, fully closing robes.”

Radiology Associates chose for the site of the imaging center a vacant parcel along a major boulevard in a section of the city where rapid growth was occurring, confident that this location-highly accessible and very visible-would spur patient volume.

The 24,000-square-foot, one-story building carried a price tag of $6 million, land costs included. The group paid for it with a combination of bank loans and retained earnings. Most of the high-tech imaging systems to be used in the center were acquired through lease agreements (options to buy were eschewed because of concerns about the potential for rapid obsolescence).

The imaging center opened in early 2001 under the name Advanced Medical Imaging, AMI for short. After completing its first year in operation, AMI was in the black. But just barely.


Lincoln is a conservative market where referral patterns are tough to alter. For that reason, AMI has employed aggressive marketing without letup since its first day in operation.

“The bulk of our marketing targets physicians,” says Marv Peters, RT, director of marketing.

With that in mind, Peters makes it a habit to bring lunch into medical offices around the community three times a week. The meals consist of choice cuisine and fine beverages.

“I try to ensure that it’s the most lavish spread they’ve ever seen in those offices,” he says. “I want the doctors and staffs to remember the name AMI.”

Peters reinforces the favorable impression his luncheons make by also leaving behind items that are sure to be appreciated, such as golf paraphernalia and beauty products (all emblazoned with the AMI logo, of course).

Recently, AMI began sponsoring youth, adult amateur, and professional sports teams across the city. Sponsorship is limited to merely providing the teams with uniforms and accessories (again, with AMI’s logo plainly visible on everything). This is good for AMI’s public image, but it also gives the center exposure to the orthopedic surgeons who cover the games as volunteer or paid team physicians, Peters informs.

Until recently, radio advertising played a leading role (AMI has decided to reallocate its radio budget to other marketing vehicles it thinks will prove more effective). Cleverly, AMI opted to air most of its radio spots on just one station-the channel to which signal-receiving public-address systems in roughly 95% of the medical offices around town were always tuned, as Peters discovered.

“I knew that the doctors, their nurses, and their schedulers would keep hearing our name, whether it was consciously or-if they were preoccupied-subconsciously,” says Peters in explaining his decision to concentrate AMI’s air-time buys on that particular station.

Patients in those doctors’ waiting rooms also were exposed to the radio advertisements, but that was fine by Peters: part of the marketing strategy entails an outreach to patients in the hope that they will influence the referral patterns of their physicians.

“On the patient side, the focus is on marketing to women’s business and community groups,” says Peters. “We believe that women are the health care decision-makers in most households, so it only makes sense to target them with our marketing messages.”

Peters contacts these women’s groups and invites them to hold a meeting at AMI. The imaging center has an amply sized conference room that is ideal for hosting such gatherings, and AMI offers its use gratis.

“If I can get a group in through our front door, I can also give them a 20-minute tour of the place,” he says. “If I get them to take the tour, they usually walk away pretty excited about our concept and the way it’s executed.”

AMI budgeted just over a quarter-million dollars for its first-year marketing activities. It is making available close to the same amount in this second year.

“Our marketing has paid off,” says Stavas. “MRI volume, for example, outpaced projections virtually from the start, in large part because of it.”


Sara Nachtigal, technologist, and Georgia Blobaum, site administrator, review image at work station.

Name a technical problem common to electronic imaging environments and chances are AMI has experienced it. But then, that is not surprising. AMI is attempting something no other freestanding imaging center anywhere in North America has yet accomplished-a complete integration of PACS, RIS, and voice-recognition dictation.

Still, despite the difficulties, AMI is poised to succeed. “We’ll make it work; we have confidence in that,” says Stavas, who admits to being taken aback by the ability of the problems to defy solution up to this point.

“We had become convinced-especially in listening to the promises of our vendors-that integration was easily doable,” he recalls. “We’ve learned the hard way that these aren’t plug-and-play products, which is almost how they’re marketed. Separately, each system is excellent. But when it comes to working fluently with one another, they fall short of the mark.”

Failure to correctly link the three systems has hampered productivity at the imaging center, Stavas reveals.

“We’re not as efficient at reading as we could be,” he tells. “What we want to be able to do is click on a patient name; have the images come up at the correct window, level, hanging protocol and magnification; speak into the dictation microphone and see our words come up immediately on the screen; click ‘send’; and have both image and text transmitted as one to the next stop, be it our staff correctionist or the outside referring physician. Right now, the complete package is not occurring.”

AMI’s modalities include CT, MRI, radiographics, nuclear medicine, ultrasound, mammography, and mobile PET (AMI is the only mobile PET source in the market; however, although the service is provided under AMI’s aegis, it is owned and operated by an independent contractor). Interventional procedures such as CT-, ultrasound-, and stereotactic-guided biopsies and spine injections are also performed. All modalities, except mammography and mobile PET, feed output directly into the PACS, which has sufficient storage capacity for 3 years’ worth of studies (in its first year of operation, the imaging center acquired some 600,000 images contained within 12,000 studies, about half of which were MRI).

The PACS images are accessed in any of three separate reading rooms. One is outfitted with a two-bank workstation and another with a four-bank workstation. The third room is equipped with viewboxes for reading mammograms and outside office films as well as films printed from PACS. A fourth room is planned and will be dedicated to teleradiology work (AMI is online with eight  hospitals across the state; these transmit direct-capture CT and ultrasound, plus digitized radiographic film).

There is, of course, a technologic reason why the PACS, RIS, and voice system cannot freely exchange data with one another, even though each is billed as DICOM-compliant. And it is only a matter of time before the vendors’ troubleshooters figure out what that reason is. In the meantime, AMI has had to put up with a lot of broken promises by those vendors, mainly the result of employee turnover. Sales representatives, mid-level decision-makers, and field engineers with whom AMI had been working and developing a good rapport would be here today and gone tomorrow, according to Stavas.

“The new people the vendors would bring in as replacements were all very nice and tried very hard to please us, but the problem was that it took time for them to get up to speed on our project,” he says “They came aboard not knowing what needed to be done-and, too often, not knowing what arrangements we had worked out with their predecessors or what had been promised to us.”

It got so bad that AMI eventually insisted that its main contact from each vendor would henceforth be someone in senior management.

“Only by working directly with the vice-presidents and presidents of these vendor companies were we able to hold their feet to the fire and begin to get promises fulfilled,” says Stavas.

Judging by the current batch of promises, integration should be achieved by early spring, says Georgia Blobaum, AMI site administrator.


A rotation system has been developed so that each Radiology Associates radiologist must work in the imaging center no more than 2 days each week. The exception is Joe Stavas, MD, who, as medical director of the center, is expected to be present more frequently, the better to help with the troubleshooting of the PACS, RIS, and voice systems that are not fluently communicating among themselves.

Two radiologists are stationed at the center daily. They are joined for half of each day by a third radiologist whose arrival usually coincides with the start of peak case-volume time.

Initially, the only radiologists in the rotation were the most computer-literate technophiles in the group.

“The imaging center-which is designed to be an all-electronic environment-was going to be a new experience for most of us, so we didn’t want to overwhelm anybody and open them up to frustration while they were familiarizing themselves with this new way of working,” says Stavas, who adds that the radiologists are supported in the center by roughly 20 cross-trained technologists and another 20 or so administrative personnel.

The rotation system also was important because all of the doctors in the group of seven general radiologists and four subspecialists spend time throughout the week traveling to rural hospitals (some as far as 150 miles out), where they provide coverage.

“We have 12 hospitals that we go to, and are there anywhere from 2 to 4 days a week per hospital,” says Stavas.

He explains that Radiology Associates believes it essential to be physically present at those faraway facilities for three reasons. First, it is, of course, impossible to perform some procedures-upper and lower gastrointestinal barium tests, needle localizations, and arthrograms, in particular-without a radiologist on hand. Second, although Radiology Associates has teleradiology capability, it is not fully feasible since the rural communities in which the hospitals are located lack high-speed phone service for transmitting images (not to mention that the hospitals themselves suffer a shortage of staff to perform film digitizing chores). Third, much goodwill results from being able to interact face-to-face with referring physicians, hospital administrators, and patients in those distant, isolated locations.

Meanwhile, time spent in the imaging center is profitable for the individual doctors and the group. “Professional fees generated by the center are allocated to our group’s general fund, from which the doctors draw their compensation,” says Stavas. “Technical fees, on the other hand, are considered profits. These are paid to the group’s investor-owners, of which there are five.”
-Rich Smith

As for revenues, AMI perhaps would have enjoyed a more successful first year were it not for the failure of CT and ultrasound volumes to meet expectations. According to Stavas, the culprit appears in part to be the recently materialized surfeit of CT and ultrasound capacity throughout Nebraska. A number of hospitals in Lincoln and the outlying agricultural region a short time ago began installing CT scanners, an unanticipated development for AMI.

But another factor was the refusal of one payor to contract with AMI. As it so happens, the unwilling payor is owned by one of the local hospitals that stood to lose business to the imaging center.

A handful of other payors likewise decline to contract with AMI. In saying no- thanks to the imaging center’s entreaties, the explanation offered is that those payors are trying to avoid a dilution of services since they have so few covered lives as it is, says Blobaum.

“At present, all of our payor contracts are with insurance companies,” she says. “However, we’re weighing the possibility of beginning to also contract directly with employers. This is particularly appealing to us as a remedy where insurance companies don’t want us in their network.

“Contracting directly with employers would be attractive because we bill globally. That means an employer would receive a single bill for all the services, instead of separate ones for the radiologist, the facility, and the technical component.”

Meanwhile, a payor problem that will not go away is the matter of getting paid more equitably.

“We haven’t conquered that, but we are taking steps to at least get paid faster,” says Blobaum. “We’re exploring various mechanisms for this, such as electronic transfer of data between us and Radiology Associates’ billing office, which handles our claims submissions.”

For Stavas, a troubling trend is seen in payors that want to shift precertification and preauthorization responsibility from the referring physician to AMI.

“This means extra work for us; more staff time tied up with waiting on hold while trying to obtain an OK from the various insurance companies,” says Stavas. “It also prevents us at times from speedily completing a study and quickly delivering results-not a good circumstance to be in when the referring physician needs the results that same day or the next.”

Stavas is not sure how to combat this. ” I don’t know what the solution is,” he confesses. “But we’ll be alert for opportunities.”


Unfazed by any of this, AMI is already casting glances toward the far future. One of its goals is to find ways of attracting nonradiologist physicians into the facility to perform procedures there.

“We envision,” says Stavas, “our center being used more by clinicians and general surgeons who may do stereotactic biopsies, or maybe conduct some breast clinics. We’re also looking into the independent diagnostic testing facility model and the ambulatory surgery center model, and carefully evaluating these with a view to what the letter of the law would allow.”

Stavas adds that AMI also wants to enhance its Internet Web site. Endowing it with the capability whereby patients would be able to schedule their own appointments online is one such improvement under consideration.

“At present, referring physicians can use our Web site to access patient reports, and soon they will also be able to access images that way as well,” he says. “For now, the way they can view images in electronic format is by requesting from us a CD-ROM disc. Growing numbers of our referring physicians are doing just that, preferring electronic images to film as a method of reviewing their cases.”

Each AMI patient also receives a CD containing a copy of his imaging study upon leaving the facility.

“This is our entry into the arena of personal digital medical record cards,” says Stavas.

For now, however, AMI’s top priority remains solving the technologic puzzle preventing it from achieving three-way integration of PACS, RIS, and voice.

“We’ll get it licked,” Stavas assures. “It’s only a matter of time, and we’re patient people. It’ll be worth the wait. Because, when it’s completed, no other freestanding imaging center will be like ours.”

Rich Smith is a contributing writer for Decisions in Axis Imaging News.