Imaging Center Owner Resources:

Outpatient imaging center owners have a lot of challenges these days.

 

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The Outpatient Imaging Center “Blueprint for Success”

The Outpatient Imaging Center “Blueprint for Success” Conference 08/09/2006

Keynote: Tommy Thompson

When asked the root cause of the DRA legislation:

“Well, it’s a lack of regulations, lack of money, but they really are mutually

intertwined, and CMS is driven by dollars. And that’s why you have this [DRA]

legislation in right now that we … got a good chance of delaying for two years.

But it doesn’t go to the heart of the matter … we have to have a complete

transformation of healthcare in America, and that is what needs to be done.

There needs to be ways in which we change the reimbursement based upon

quality.”

When asked what actions imaging center leaders should take to combat the DRA:

“You’ve got some wonderful new things that are happening in your hospital and your

clinics. And the truth of the matter is, is the legislators and congressmen and women really

don’t understand it. They don’t understand the reimbursement formulas. They don’t

understand the new medicines. They don’t understand how you treat patients. They don’t

understand the cost. All they know is when they get back here to Washington, they’re

budgets are large. And what you need to do is you need to bring in your state legislator,

because they can have an impact. You need to bring in your congressman and/or woman

and U.S. Senator and be able to sit down and say, you know, “This is how we treat patients,

and this is the new kinds of treatment we have. And this is what we need. And the

reimbursement formulas that you are putting upon us are causing us problems.” And have

examples there. Have some patients there to talk to, and I’ll tell you, it’ll be the best

amount of time you’ve spent in your year. It’ll even be better spent than going to

Washington or to the state capitol, is to get that congressman. But the problem is there,

everybody’s busy and they’ll send an aide. An aide doesn’t count. You gotta have that

individual in your office, in your clinic to see what’s going on.”

Tommy Thompson

Former Secretary of

the Department of

Health & Human

Services

3 /

The Outpatient Imaging Center “Blueprint for Success” Conference 08/09/2006

Keynote Speaker: Tom Scully

Medicare’s focus on imaging due to volume growth of 20% year after year and

spending increase of 25% annually

Congress needed to find an area to offset physician fee structure and imaging was

“one of the biggest lines on the bar chart”

Anticipate a similar “instant replay again this year” where Congress is “going to come

back after the election and fix the doc cut. The docs are teed-up again for a negative

4.7 percent update.”

Imaging, like other high growth areas of healthcare, needs adjusting and whether DRA

goes into effect January 1, 2007 or there is a 2 year moratorium, changes will occur

Recommend grassroots movement to make noise with Congressmen and Senators.

Don’t focus on blame with industry organizations or other providers, but band together

to put pressure on legislators, otherwise the chance is great that the DRA will take

effect the first of the year

“Show the savings to the system. Hospitalization is down. A lot of people aren’t going

to the hospital because they’re getting PET scans or CT scans or MRIs or other imaging

services that are saving money. A lot of interventional radiology services that are in the

hospital are much more cost effective, result in much shorter hospital stays. So

spending money in Part B on imaging is not necessarily a bad thing if the net costs to

the system go down. Do most members of Congress understand that? No. Will they –

is it a good argument that they need to be educated on it in the next three or four

months? Yes. “

Tom Scully recently accepted a leadership position with the Access to Medical Imaging

Coalition (www.imagingaccess.org).

Tom Scully

Former

Administrator

of CMS

4 /

The Outpatient Imaging Center “Blueprint for Success” Conference 08/09/2006

General Session: Sg2

Key Takeaways

• Imaging is growing and the market is shifting

• Success will require better strategies, clinical performance, productivity and

business execution. And do all the basics well.

Predictions post-DRA

• Market consolidation will occur

– Hospitals may purchase struggling outpatient imaging centers

– More successful imaging centers and radiology groups will acquire other imaging centers and select

physician- owned services

– Non-radiologists now providing in-office imaging services may close those down and seek privileges

to interpret in the hospital

– Marginally profitable and single-modality centers may struggle

• More joint ventures among hospitals, specialists/radiologists and imaging

centers

• Safety in strategic service JVs with specialists

• Diversification of services and JV’s by imaging centers (e.g. cancer Dx/Tx

centers)

• Low-reimbursement studies currently being performed in an outpatient or IDTF

setting will move to the hospital in large numbers

• Equipment purchases and upgrades will slow down, increase in “used”

equipment purchases

• Increase in competition for volume and pressure from payers

Michael Silver, PhD

Vice President, Sg2

5 /

The Outpatient Imaging Center “Blueprint for Success” Conference 08/09/2006

Breakout: Marketing

Marketing is a core strategy for your growth and success – strengthening it can be

an anti-DRA strategy

Tell your story before your competitors do

Marketing is an economic investment, not a frivolous expense

Marketing is different than sales – sales being your “feet on the street” meeting with

referring physicians

Marketing outcomes can be measured against the investment

Marketing is a profession  hire the best  don’t try to do it yourself

Competition is only going to increase so be prepared for a battle

How will market leaders respond to DRA?

• Develop a renewed emphasis on service

• Protect your referral base

• Look for opportunities to increase your market share

• Grow your business by expanding your marketing program

• Emerge as a strengthened organization

Curtis Pickelle

CEO, Imaging

Center

Institute

6 /

The Outpatient Imaging Center “Blueprint for Success” Conference 08/09/2006

Breakout: Finance

GE and industry data indicates robust growth (9% average annual growth rate) in

imaging procedures within OIC “sweet spot” (MR, CT, PET)

Best practice sharing model for DRA impacts upon net revenues MUST be done

at procedural levels to show impact upon any particular center. Significant range

by mix of procedures.

No consensus on private payers yet; need to account for potential decline here

for sensitivity analysis in your impact model

Six Critical Success Factors (that finance companies look at when evaluating your

business)

1. How well do you understand your referral sources and are you effectively

marketing to them?

2. Do you have commitment from your reading radiologists (regardless of

whether they are owners or on contract)?

3. What are your relationships with local hospitals and do you understand

their outpatient strategy?

4. How well do you know your local market and your competition, including

unmet market needs and your own competitive differentiators?

5. How effectively are you managing your payer mix and contracts?

6. Is the business striving for continuous process improvement, especially as it

pertains to financial and operational areas?

Jim Sadowski

Vice President, GEHC

Financial Services

Doug Lynch

Sr. Vice President, GE

Commercial Finance

7 /

The Outpatient Imaging Center “Blueprint for Success” Conference 08/09/2006

Breakout: Operations

Access and Service

• Reduce call abandonment rate by routing calls appropriately, schedule

staff to match call volumes

• Reduce No Shows by making reminder calls to patient, develop tight script

and train staff, if patient doesn’t show – find out who got the business

• Expedite report turnaround, understand customer expectations (and

competitor performance), identify and reduce process bottlenecks,

implement technology solutions, leverage service excellence as a

competitive advantage

Capacity and Throughput

• Optimize protocols

• Prep patient outside exam room, utilize tech aide, optimize exam slots

• Cross-train technologists

Revenue Cycle – Avoid denials and write-offs

• Verify insurance is correct and obtain pre-auth from the referring

physician; review benefits to ensure the procedure is covered; check

medical necessity

• Check outstanding balances and out of pocket payments; contact patients

for payment plans prior to visit

• Contact the patient or physician to resolve outstanding issues

Michael Hase

Senior Manager,

GEHC Performance

Solutions

Doug Long

Senior Manager,

GEHC Performance

Solutions

8 /

The Outpatient Imaging Center “Blueprint for Success” Conference 08/09/2006

Breakout: Technology Planning

Technology planning isn’t just about technology

Understand where you are to know where you’re going (strategy)

Understand growth – and drivers of growth – by modality

Realize modality growth alone is not enough; consider

reimbursement, staff skill sets, payer mix and market saturation

as well

The newest technology is not always the right call

The planning process requires discipline, a long-view, and

flexibility

When planning for technology, consider new equipment,

upgrades, moving existing equipment, refurbishments

When creating capital investment plan, ask:

• Do investments align with our overall strategy?

• What operational changes are needed?

• Any new clinical or operational opportunities?

• How will facilities be impacted?

• How do we pay for it?

• How do we service and maintain the investment?

Garrett Ogden

Practice & Marketing

Leader

GEHC Performance

Solutions

The Outpatient Imaging Center “Blueprint for Success” Conference

Technology: when to inves t

Revenue

Time

Cumula tive

Revenue

Breakthrough

Technology or

Application

Introduction

Market

Standard

Technology

Mature

Technology

Early

Adopter

Consensus

Adopter

Cautious

Adopter

Late /

Defens ive

Adopter

Medium Volume

Low Re imbursement

High Volume

Max Re imburs ement

High Volume

De clining Reimburseme nt

De clining Volume

Low Reimbursement