...but only if the practices prepare ahead of time
Recently, three trends have aligned to signal highly favorable conditions in the independent radiology space for the coming year. These trends are: (i) a resurgence of the patient steerage debate; (ii) an increase in patient consumerism; and (iii) advances in pre-service technology that could significantly improve practice efficiency. Independent radiology centers that take steps now to prepare will be in an enviable position next year and better able to capitalize on these trends.
Patient steerage for imaging services
While not a new concept, patient steerage is getting a lot of renewed attention this year in the area of radiology. Starting on July 1, 2017, in four states, Anthem announced that they will begin reviewing “requested level of care” for advanced imaging services such as computed tomography (CT), and magnetic imaging (MRI). This review will include examination of “clinical criteria to determine if an imaging service requires a hospital-based outpatient setting, which offers a higher intensity of service resources, or if a free-standing imaging center is a clinically appropriate and available alternative.”
The impact of Anthem’s actions could lead to an inevitable shift of MRI and CT procedures away from hospital-credentialed facilities and instead towards free-standing radiology sites that may have more competitive pricing. A similar shift could be expected if these programs expand to more payers and more states.
Increasing patient consumerism
Patients with high deductible health plans face increased financial responsibility for their care and as a result, are actively seeking out ways to control costs such as looking for the lowest cost method to obtain a procedure. In 2013, the American College of Radiology published a whitepaper noting, “[b]efore the widespread adoption of high-deductible and high co-payment health plans, most patients had little incentive to compare prices. Now…more Americans are checking prices in their medical decision-making.”
With patients now actively shopping for services, independent radiology facilities may be able to capitalize on their ability to provide high-quality CT and MRI procedures at lower prices than hospitals. Many independent radiology facilities are adjusting their future marketing budgets accordingly in an attempt to position their services and gain mindshare of these patients as consumers.
Advances in preservice technology
The third trend has been less publicized but offers the greatest opportunity to impact radiology practice profitability. Five years ago, any increase in procedure volume would have immediately required a similar increase in operating costs and overhead to manage the new business. However, recent advances in technologies and tools to increase practice efficiency are helping some practices handle increased procedure volumes with significantly less overhead increase.
Chilmark Research recently published a market report on advancements in prior authorization technology across the industry in 2017. In the report, Chilmark Research predicted that “providers and payers will see new solutions that will make prior authorizations more effective and efficient so it can more broadly serve as a vital aspect of revenue cycle, cost containment, and population health management strategies.” Reducing an authorization process from days to minutes through automation speeds up scheduling, improves patient satisfaction, and frees up staff time to work on more high-value activities.
Early anecdotal evidence from client discussions not only supports this return on investment, it indicates that technology and efficiency investments may create a future competitive advantage. Practice managers are considering efficiency as they make referral decisions – preferring centers who can obtain the authorization and complete procedures in the shortest timeframe. This evidence may indicate that technology-driven efficiency will improve a practice’s chances of becoming a location of choice over other centers.
Other advancements, like improved patient estimates, increased up-front patient collections tools, and streamlined process workflows, all stand to significantly help practices maximize the benefits of these converging trends in the radiology market. Practices that invest now, ahead of increased MRI and CT volumes, may capture the lion’s share of profitability in the future.
To learn more about current business opportunity in radiology, visit www.availity.com/radiology.