Although you may not realize it, your doctor is a monopoly. Yes, you can see someone else, but not without difficulty. And if you wanted a second opinion, how far would you go? In part, through insurance coverage, in part based on a desire for convenience, healthcare is generally a local monopoly. However, that may be about to change.
I’m a radiologist, an expert in medical imaging. When I started my career in 1997, I’d show up for work and it was just me and my films. The exams presented to me were a mix of imaging- CT, MRI, ultrasound, plain X-Rays- all captured, presented and stored on film. By 2000, the film was gone. Just about everything I did was done on a computer.
I was an early proponent for this technology (also know as PACS for Picture Archiving and Communications Systems). It allowed my group to work faster and smarter. However through a series of steps (consolidation, specialization and finally commoditization/globalization) technology broke up the local monopoly many radiology groups enjoyed. Similar to Instagram, PACS allowed medical images to be seen instantly by anyone anywhere. And now, based on improvements in technology, I’m expecting similar changes for the rest of healthcare.
Tele-radiology first emerged in hospitals when computers began to be used to optimize the daily workload. At the beginning of my career, several doctors divided work for the day into piles. Each person did his or her allotment with no real help from peers. With the transition to digital, work became a common pile that was shared among physicians in the same hospital. Faster doctors filled downtime gaps reading more cases, resulting in improved overall efficiency.
Such consolidation of work expanded to other operations with the development of specialized software. Take scheduling in today’s brick and mortar clinics. There are gaps when patients don’t show or an appointment ends earlier than planned. These gaps in the schedule represent lost revenue. ZocDocs, a technology start up, attempts to solve this problem by filling appointment gaps in clinical practice. Now a myriad of companies has improved a range of internal operations, starting from the same concept of consolidation.
During the next phase radiology practices realized they could improved efficiencies by sending the right case to the right person in the practice. Like the rest of medicine, radiology is highly sub specialized. For example, I am a neuroradiologist. I can generally read exams of the brain and spine faster and more accurately than radiologists who cover the whole body. Radiology groups soon realized there were advantages to having cases sent to specialists within their group rather the next available radiologist. (And—take note patients—asking for a specialist to read your imaging rather than whichever radiologist is on that day incurs no extra cost).
Commoditization and Globalization
It wasn’t long before entrepreneurs realized that cases could be moved outside of the hospital to radiologists anywhere. At first these forward-thinking businesses limited such out-sourcing to night-time coverage (Nighthawk is the best example). However, these companies quickly expanded and now compete with local radiologists for work during the day. The larger size of these national companies often allows for better technology and more specialists. So, even though, traditionally, healthcare—including radiology— has been a local monopoly, the future is clearly going to be one of increased globalization of services based on cost and quality.
Implications for the Future of Healthcare
Telemedicine, as part of every day clinical practice, is more complicated than tele-radiology. However, over the last two decades technology has now evolved to support all forms of clinical services. Particularly for specialty services, the best care is often not the local care. And, with virtual clinic visits as close as the PDA in your pocket, I expect some of the same trends in radiology to occur for healthcare overall.
When I started my career, Kodak, the venerable producer of film for a century was near it’s peak value of 32 billion dollars. A little more than a decade later, having missed the transition to digital, Kodak was bankrupt. Change is coming. Now, video can be shared as easily as medical images. Healthcare no longer has to be local to be convenient. The patient, or more likely the patient’s insurer, will negotiate the best rates and best quality for expensive procedures and other services. This is already happening at more progressive self-insured employers such as Walmart and Lowes. For you as a patient, this is great. It should mean better care at a lower cost. For physicians and other providers, we will have to adjust or go the way of Kodak.
Alan Pitt, MD is a radiologist based in Phoenix, Arizona. He is the chief medical officer with Avizia. Read his blogs at AlanPittMD.com.
The concept of “disruptive innovation” is central to effective strategic planning. Every product or service has a definable “life cycle” that can be depicted as a bell curve. At the early stage of adoption “product innovation” is high – for example the early Apple computer that included a disc drive and keyboard. As the product climbs the life cycle curve product innovation declines and “process innovation” takes over: functions and features increase, price declines. The life cycle peaks, and the product or service shifts to the downward slope when a “disruptive innovation” occurs. Consider what the iPad/tablet has done to personal computer sales.
The healthcare industry has experienced many disruptive innovations in the past, and the pace of change is only expected to increase in the future. The most effective leaders take time to research and anticipate future disruptions, consider the impact that they can have on their organizations, and adopt strategies that will allow them to take advantage of the disruptions. While “forecasting the future” is unrealistic, it is actually not as difficult to develop “foresight” regarding trends and likely developments. I often refer my clients to the Institute for the Future to get started. On their website you can find a large number of articles and white papers that discuss anticipated trends that may change how healthcare is provided over the next decade.
Several additional comments.
I have clinical training in both radiology and neurology. I have some sense of direct clinical care, but admittedly most of my career has been spent in radiology. I try to train my residents and fellows not to be right, but to be reasonable. Many radiologist tend to pass the buck, offering a laundry list rather than relevance. This list offers means risk, worry and cost for someone else. My father, also a radiologist, has always said the radiologist should strive to be the clinician’s clinician, to address the images with a level of reverence for the patient and those caring for the patient.
Some of the comments from the primary care community remind me of those made by radiologists during the introduction of PACS. I can remember radiologists angrily commenting that the technology was simply not good enough for care. At some point, it became the accepted and preferred alternative. It is my belief there will be a gradual increase in telemedicine over time. This will more likely come to the speciality community first, and only later followed by other areas. Telemedicine will not replace but rather offers an alternative opportunity for care- just as teleradiology is part of the tool set now offered by imaging services.
I also believe the readers of THCB are likely the ones to adapt. Too many physicians paralyzed by the changes they see all around them rather than looking for ways to adapt and benefit. My piece is but a history, with hopes that it offers insights moving forward.
As a primary care physician i dont have the luxury default of “can not exclude neoplasm, infection or normal variant, clinical correlation is advised” It is the reason i dont consider radiologist clinicians. Very valuble and necessary but not clinicians. Most primary care diagnosis are not a clear cut as a glioblastoma or fracture. And as for the walmart comment….i am not ready to my health care be determined by the lowest bidder.
“When I started my career in 1997 ….” I started my career in 1984 and things were similar to what you describe, we were working with analog images (films). I was also a strong proponent of PACS.
“Tele-radiology first emerged in hospitals when computers began to be used to optimize the daily workload.” This is not really true. Tele-radiology started as a way to cover night time and off hours imaging remotely. Our group started doing Tele-radiology in 1996 and continues to this day. Early tele-radiology was done by digitizing films and sending CTs via “Photo Phone” technology. As time went by and image acquisition changed to digital, it was easier to ship images electronically.
“Nighthawk is the best example.” Nighthawk was a good example, but is no more. It has been taken over by a company called vRad. The origin of Nighthawk was the MemRad group of Southern California which started doing tele-radiology even before we did (and which we copied, ahem emulated).
The ability to “digitally outsource” imaging has been talked about for years, but attempts to actually do it have proved more elusive. In the first place there are the on-site procedures done by Radiologists; Fluoro, Biopsies, Angio/Interventional, etc. – which can’t easily be outsourced. In the second place, there are numerous legal barriers related to licensing, credentialing and malpractice which make “digitally outsourcing” difficult and sometimes even impossible. (Medicare regulations prohibit interpretation of studies on Medicare patients from outside the US)
I agree with Alan Pitt completely. I find it hard to believe that the University of Arizona would pay him to be a faculty person when in fact they can get a better faculty at 1/5th the cost by hiring a radiologist from Bangalore.
Why should Barrow Neurological Institute pay Dr Alan Pitt an outrageous salary well into the 6 figures when there are thousands of Indian radiologists who can do the same job for less than 1/3 the cost?
Please tell me why we pay Alan Pitt an outrageous amount of money and waste the efficiency of foreign doctors who can do a better job for a much cheaper price?
That’s an excellent question which every radiologist must ask themselves. What portion of our job requires a medical degree?
Monopolists (dominant sellers) and monopsonists (dominant buyers) have what is called market power. This is the ability to affect prices. When you can do this, you make prices. When you can’t do this, you have to take prices. I.e. you have to live with prices that are set by many buyers and sellers in what amounts to an auction. Therefore, the monopoly metaphor is not accurate, although a patient may well behave as if you are his only savior,
If docs could get together, they would be in a position to affect prices. This is what hospitals have been doing and it has worked pretty well for them. Most hospitals and agencies dealing with doctors keep reminding them about the legal dangers of monopoly and have spooked most cartel behavior in physicians. But doctors do need more power, IMO, not to affect prices, but to exert patient-beneficent discipline upon hospitals and plans. E.g. We should have demanded that patient bills be clear and easily understood for the last umpteen years. We should have demanded price transparency from all providers. We should not tolerate policy that is not evidence-based. Eg allowing kickbacks to your club member (read ACO) if your club skimps on patient care compared to a past benchmark. We should demand that hospitals stop ragging on our patients to sign advance directives and durable powers…We should have demanded that patients be seen quickly in ambulatory care departments in hospitals and in the admission process. We should have demanded much more fairness from insurers –in coverage, cancellation, etc. Et al ad infinitum. We need to fulfill legal agency for the patient. We are his only agent and we are letting this function degrade.
Thank you all for the comments and the healthy dialogue. I’ve sometimes referred to healthcare as Compassionate Capitalism. We have a responsibility to care for the sick, but there need to be effective business models to continue to do so. Teleradiology enabled new business models.
I would agree with many of the comments- primary care, patient visits, are far more complex and nuanced than imaging. Imaging requires a blob of information to be moved to an individual for interpretation. Telemedicine requires 2 and often more people to be coordinated in the cloud. Further, the encounter has to leave the patient and the practitioner with some level of comfort that care was delivered.
However, the tools are upon us. There will be circumstances where tech enabled business models will catalyze alternatives to what have traditionally been local monopolies. In my opinion, Telemedicine will enable those who give the best care, not just those who give the best care locally, to be the providers of the future. And frankly, this will come as a shock to many physicians.
a) I second Leslie – seconding Rob.
b) I agree with Alan that these things are happening – especially in domains like his – where a specific skill is what’s most important – and that skill is something that can easily be leveraged with technology. His interventional colleagues doing procedures in the hospital are not nearly so easily electronified – nor are primary care docs.
c) Yet there is a resonance that you can hear in Rob’s note: health IT can/will/should CONNECT us with our patients more – just as your high school friends’s photos are oddly in your facebook stream in a way that was simply impossible 10 years ago. As Clay Christensen and Jason Hwang write (http://www.amazon.com/The-Innovators-Prescription-Disruptive-Solution/dp/0071592083), there will absolutely be tightly integrated disruptive solutions that deliver better quality with better experience and lower cost. But it’s not JUST about technology. Technology is one of many enablers – and until/unless the business models shift, we’ll not yet reach this nirvana.
I agree with their opinions.
Hm…I am agreeing with Alan but also w Rob.
Completely agree that primary care and most longitudinal care benefits from the relationship.
That said, now that I’m no longer a PCP and focus on geriatric consultations, I review people’s primary care notes all the time. Many of them really benefit from a second opinion. In some cases, they just need to hear about other options. In other cases, something important was being missed.
Let’s face it, most people do not have Doc Rob as their doctor.
Now that people are more able to access their medical information, and keep it themselves, it can be easier for people to get other opinions regarding their health. This will mean less individual clinician monopoly over a person’s care, which in some cases will be a very good thing.
Here’s the difference between radiology (and many/most subspecialties) and primary care: the technical aspects of specialties are more important than the relational aspects. In other words, you can send films to be read across the country (or the world) and the patient can get care that is equal in quality. The most important thing to the patient is the technical skill of the doctor reading the film or doing the procedure. In primary care, on the other hand, there is a far stronger relational aspect to care. When my patient calls me with chest pain, headache, or frequent urination, I can give much better care than people who don’t know that the patient has migraines, has had a brain tumor, has coronary disease, or is a drug seeker. Others also won’t know how if the patient tends to over-react or if they never call unless they are on death’s door. Finally, my patients will trust what I say and follow the directions much more than they will an anonymous physician who is talking to them for the first time.
The point I am making is that your parallel doesn’t work for primary care. In primary care, monopoly is preferred because it equates to familiarity. On the other hand, use of technology can have a huge impact on care (as it does in my practice). The monopoly that most patients are constrained by with their doctor is the location of the care. Docs will only give care at an office visit because it is the only way they get paid. We force people to come to the office for everything, which (as you are aware) not only drives up cost and decreases convenience, but it cuts the available time for the PCP to have a relationship with the patient because the office is overflowing with patients.
My office (direct primary care) is not limited by that constraint, which allows me to communicate with my patients using whatever technology works best. A patient with a target lesion on their leg after a tick bite can send me a picture of the rash and get a prescription for doxycycline without coming to my office. This is not an anonymous person, but instead someone who I know and have a relationship with (which makes this type of care reasonable). This has had some pretty huge positive effects:
1. It has greatly improved my patient’s satisfaction with their care
2. it has made my patients much more likely to contact me sooner with their problems. This may not sound like a good thing, but if I can handle a problem early, I can keep it from becoming a bigger one.
3. It has reduced ER visits, since I am accessible to them and they don’t have to decide on their own “if this is an emergency, please hang up and dial 911,” as is the case with most docs. I help them decide if something is an emergency.
4. It has made it much easier to tell people “no” to antibiotics or other unnecessary treatments. Since people know they can reach me easily, they are OK with waiting. It’s a BIG difference.
5. Since many of unnecessary office visits are avoided, my office is much more lightly scheduled so that people have in-office access to me when they need it.
All of this is enabled through use of technology. Technology is good. But as opposed to alienating doctors from their patients, I’ve found that it can actually improve that relationship. The monopoly we should fear is not of the person, but of the location.
Your points are well taken, Dr. Pitt. I am an ER physician and we really appreciate the availability (perhaps more so than any other specialty) of after hours expertise at imaging results.
But someone still has to put hands on that patient, and it isn’t (or shouldn’t) all NP’s or mid-levels . . . I’ll probably be very happy when I can get paid to sit in my room and have mid-levels “FaceTime” me their patients?