There is little in the health care world as amusing as watching radiologists work themselves into a froth over some real or perceived threat to their profession. Usually the villain is non-radiologists daring to encroach on radiologists’ turf. See, for example, Radiologists pull out the long knives as the radiology community attacks self-referral by non-radiologists. But the latest story (JACR article fires broadside against teleradiology firms) is about radiologists going after one another.

Gentlemen, we have met the enemy, and he is us! I didn’t pay $30 to access the article itself, but instead refer to an extensive summary on AuntMinnie.

David Levin, MD, and co-author Vijay Rao, MD, of Thomas Jefferson University in Philadelphia, make their case that teleradiology outsourcing contributes to the commoditization of radiology, lowered reimbursement, displacement from hospital and outpatient reading contracts, greater encroachment by other specialties, and lowered quality.

Here’s the problem:

Radiologists have been content to live off the fat of the land, working bankers’ hours and outsourcing inconvenient night and weekend duties to teleradiology firms rather than taking call themselves. Even when they’re around, radiologists in general don’t do a good job of serving the physicians who refer to them, staying in their dark rooms and not being proactive or even responsive. As radiology groups are finding, if they demonstrate they’re not crucial to the success of a hospital on nights and weekends, that also makes a pretty good argument for why they’re not necessary during weekdays either. Once hospitals understand the truth they can dispense with the local, intransigent radiology group entirely.

It may be news to radiologists that their actions are leading to commoditization, but it’s something I’ve been talking about for years. See Let the commoditization of medicine begin! for a taste of the argument.

Here’s what the authors propose as an antidote:

The authors recommend radiologists take a number of different steps. For starters, radiologists should cover their own practices 24/7, “just like in the old days before the easy-life mentality took over.”

“Don’t outsource night and weekend imaging to the teleradiology companies,” they wrote. “Without the business we give them voluntarily, they will cease to exist. This will not be easy, but it must be done if we hope to remain a respected and well-compensated specialty, rather than a commodity.”

The authors also recommend that radiologists not work for teleradiology firms, even on a part-time basis.

Those proposed responses are logical but I don’t see radiologists moving down that path en masse any time soon.

From a policy standpoint we should be pleased that this commoditization is taking place. If board certified radiologists credentialed by a high-quality hospital want to compete on price, I say bring it on!

David E. Williams is co-founder of MedPharma Partners LLC, strategy consultant in technology enabled health care services, pharma,  biotech, and medical devices. Formerly with BCG and LEK. He blogs regularly at Health Business Blog, where this post first appeared.

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26 Responses for “Radiologist: Commoditize Thyself”

  1. nate says:

    this is an area we are aggresivly targeting as a payor this year, get people out of hospitals and have free standing facilities compete.

  2. rbar says:

    There is a lot of savings potentials here. There are certification- and legal issues, but the quality of e.g. brain readings by any trained neuroradiologist in India is as good or higher than that of a general radiologist in the states, and since the images are easily transferable and are interpreted with the actual patient unseen, outsourcing is entirely doable.
    Moreover, the technical component of radiologic exams (generating the actual images) are highly standardized, and if imaging facilities competed on price, studies would only cost a fraction of what they cost now. This is one of the few fields in which one could easily save a lot of health care dollars, the low hanging fruit (in addition to fraud and excesses of overutilization).
    However, there is an easy bureaucratic fix that would allow us to keep all radiologic services in the country: just pay the radiologist the average time that it really takes him/her to interpret the pics and to generate a reading. Interpreting pics is not more stressful than seeing patients and should be compensated grossly similarly (of course one can make modest adjustments for education and risk of litigation). The fee schedule needs to be adjusted dramatically. Unfortunately, public ignorance and subspecialty interests will obstruct the common sense solution.

  3. Healthcare IT person says:

    Fascinating. The rather large radiology firm I work for has taken a different tack than what you mention. They provide 24/7 coverage for the main hospital system in town, plus they have an aggressive teleradiology program in the region of their own. Plus they read day studies at a number of other unaffiliated practices and smaller hospitals around the area as well.

  4. Healthcare IT person says:

    rbar–one problem I see w/ your statement “the technical component of radiologic exams [...] are highly standardized” is that the level of equipment does vary between various institutions rather widely. Also, of equal importance, in my opinion, is the skills of radiologic technologists vary widely as well. There is a very wide gap between the mediocre ultrasonographer and the better-than-average ultrasonographer. Now, that isn’t to say that imaging centers run by radiologists (or hospitals, for that matter) have the monopoly on those better technologists and better machines. But there are wide differences out there.

  5. rbar says:

    The different equipment is as different as the various planes airlines use (I use air traffic as the classic example of a highly standardizable product that has benefitted from price competition). Obviously, there need to be minimum standards. I have occasionally seen poor quality exams from the US, although admittedly, it would become a much more frequent problem if price competition develops and standards are not enforced.
    And actually, imaging quality could be a reason to separate the image generation from the interpretation part. The interpreting radiologist could give a quality rating from 1-10 as independent feedback.

  6. anon says:

    David
    Would be interested to get your comment from this WSJ post that somewhat contradicts above.
    http://blogs.wsj.com/economics/2010/11/30/india-is-benign-for-radiologists-economists-argue/
    Brad

  7. PKinSFLA says:

    There is one big gap here in all of this. I bet you that when the changes in the pricing structure of radiologist readings takes place, the costs will be taken out of the hides of the Technologists and staff in terms of wages and benefits.
    If the American consumer which can be both the patient and ordering physician is given a choice betweeen the Radioligist he or she can talk to in the same town, or one across the globe, they will prefer a local read. I see the Rads I work with being able to immediately contact the referring physician about an issue or problem and that being good for everyone.
    Rads do need to be back on earth when it comes to service. Years ago I did inservicing for a hospital and found that they were sending their night business to an out of state group. When I asked the staff, they told me that the local Rad group promised everything to get the around the clock contract, but gave the staff and everyone a real hard time when it came time to read exams from the ER at night and on weekends. Your work is hard enough without a whining Rad who is paid to read at night and then complains when he has to.
    Sometimes having your livelyhood taken away makes you wise up to work better as things changed a year later.

  8. Doc99 says:

    If the reading is performed in another country, is the radiologist licensed in the state in which the service is rendered?

  9. MD as HELL says:

    This should work. Drag the Indian radiologist into American court when he screws the pooch. Oops. You can’t find him, can you.
    American radiologists can cut their fees, too, if they cannot be sued.
    Let’s farm out the surgery in the middle of the night, too.
    Let’s do telemedicine for kids with simple fever…from home.
    There is no end to the possibilities.

  10. This is very brilliant topic of discussion. I want to join it permanently.

  11. Hey I read your articles every day and I am a great follower, but never struck in my mind that you be praised for your hard work. Here’s a token for your efficiency and the hard work you put in your articles. I just love to read it.

  12. The Enemy is Us
    David – It is ironic that the same domestic medical care [not just radiologists] that is the envy of the world has caused doctors to be defeated in their ability to influence the marketplace price by selling a quality, but nevertheless standardized service.
    Now, consider the economic effects of practice guidelines and standards, evidenced-based medicine [EBM] and comparative-medical effectiveness [CME], or the diagnostic testing epidemic in this light? Just remove the cognitive process from the delivery equation and – voila – commodity anyone?
    Dr. David Edward Marcinko MBA
    http://www.BusinessofMedicalPractice.com
    [Editor-in-Chief]

  13. nate says:

    the patient is not choosing to send their test to india to be read so that decision then must be made by a US provider. Who ever in the US is deciding to send it would be legally liable. I’m certain US providers aren’t going to take on that liability not knowing who they are working with overseas.

  14. Photon says:

    Here’s another take on Dr. Levin’s article. I see it as nothing more than an attempt to make academic radiology departments relevant. The article explicitly argues for a closer tie between university radiology departments and local private practices. Whether this actually improves service or patient care is debatable, but it most certainly would improve the income of academic radiologists, a group well known for poor productivity and perpetual whining about income. The handwriting is on the wall for academic medicine in the era of Obamacare, and this is nothing more than a plea to shift the money flow from private teleradiology firms competing in an open market to academic radiologists who can’t get out of their own way, and will be content to have residents read the work while they sit in their offices.

  15. rbar says:

    At David M – I find your post cryptic.
    “It is ironic that the same domestic medical care [not just radiologists] that is the envy of the world has caused doctors to be defeated in their ability to influence the marketplace price by selling a quality, but nevertheless standardized service.”
    “envy of the world” – unsubstantiated, debatable statement at best. Yes, there are people from all over the world coming to Mayo, etc., but they come mostly from developing countries without strong (subspecialty and techological) medicine. And some european centers attract foreigners as well, occ. also americans.
    “defeated in their ability to influence the marketplace price” – who got defeated? US radiologists? They are still earning well. Or are they defeated in that they could/should make even more?

  16. MD as HELL says:

    rbar has a problem with radiologists, apparently.

  17. MD as HELL says:

    How about robotic surgery from India? You are in America under the robot knife, hopefully asleep under the care of the Indian anesthesilogist, and the surgeon is in India in a different hospital (or a hotel room) replacing your aortic valve (which was made in China by 12 year-olds) using a knock-off X-box 360 and pirated software.
    Hope the internet doesn’t crash. Hope there is no weather to block the satellite.
    Your records will be electronic, but in several languages, none of which you either read or speak.

  18. rbar says:

    No, hell MD, I just think that the current fee schedule is unfairly and counterproductively benefitting proceduralists/radiologists and surgeons. I am a specialist who does few procedures and I am happy with my income that is close to the income of a PCP (which is still in the upper 4%). I interact(ed) and work(ed) with many radiologists (and they tend to be smart since their specialty is competitive to get into); do I remind them that I think they earn too much? No.

  19. sandrar says:

    I just finished reading “The Innovator’s Prescription” by Christiansen, et al, and this situation is analyzed in detail in the last chapter. Very interesting analysis, as is the entire book.

  20. Brad,
    You asked me to comment on the WSJ blog about India not being a threat to US radiologists.
    To be clear, the teleradiology I’m referring to is done by US board certified radiologists, though some of the commenters don’t seem to realize it. Many of these teleradiologists are in the US, but some are based overseas. Often the teleradiology companies hire radiologists out of fellowship and set them up in a remote time zone, e.g., in Australia or Hawaii. That way they can work during their day when it’s night in the US. It’s a pretty attractive gig compared to being the low man on the totem pole in a regular radiology group back in the US. They can always come back later with more experience.
    The issue of Indian or other low-cost radiologists is an interesting one but not addressed here. The US radiologists are managing to commoditize themselves quite nicely despite erecting guild-like barriers to entry.
    David (post author)

  21. RBAR,
    Sorry for appearing cryptic; please allow this deeper exchange.
    All things being equal – ceteris paribus – my comments above are more correct than not. Of course, many docs have indeed been defeated in their ability to influence marketplace price [THINK: the SGR conundrum and the so-called “doctor-fix”] despite protestations to the contrary.
    Why you ask? In a word – “volume” – makes up for declining market power pricing to a certain extent. Mathematically, consider this simple equation:
    CPT® code payment [little market pricing power] X Volume [great control and market power] = Income
    Look, more volume is a way for suppliers [doctors] to increase [artificial] demand that is supplier [doctor] driven.
    IOW: Let’s do one more test, Mr. Patient – “just to be sure”. IE: Make it up in volume.
    Now, for radiologists, consider the current explosion of invasive and non-invasive diagnostic testing and procedures.
    Money is what talks in this world. With lost pricing power for many doctors like urologists, internists, FPs, gastroenterologists and dermatologists, revenue is made up and increased by augmenting volume. So, as long as volume increases faster than CPT® reimbursements decrease, revenues may still increase. This is economics 101
    Moreover, many doctors are now setting up their own ambulatory medical facilities, in-office drug dispensing units, ancillary services or laboratories within their group to make up for lost income.
    Thanks for appreciating this deeper discourse.
    Dr. David Edward Marcinko MBA
    http://www.HealthcareFinancials.com
    [Editor-in-Chief]

  22. Mary Murphy, M.D. says:

    I’m a radiologist. What I see in everyday medical practice is that PCP’s seldom lay hands on their patients. The actual History and Physical Exams are being performed by “physician extenders,” namely, Nurse Practitioners and Physician’s Assistants, and the radiology exam is very often used as a “surrogate Physical Exam.” Hence, the relationship of the PCP with his or her patients is morphing exponentially into a non-hands-on profession: The PCP reads the History and Physical notes (acquired and recorded by a physician extender), looks at the lab results, xray results, etc. and then logs in a diagnosis and treatment plan. Such “hands-off” medicine can easily and quickly be performed overseas by the lowest bidder. There is no sacred haven for physicians: The risk of being outsourced is not limited to Teleradiology and Teledermatology. TeleMEDICINE is equally vulnerable. And with the explosion of robotics, surgical procedures (performed by local surgeons) are, without question, at risk as well.

  23. smooth says:

    Physician services only make up 14-17% of Medicare expenses …telemedicine won’t solve any cost problems even if implemented perfectly…..but I think it is a slippery slope for all physicians to continue to corporatize and commodotize medicine. Also interpretations and protocols are not standardized inter institutionally..so I don’ t know if the above poster is well informed.

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