Becker's Hospital Review

44 Executive Briefing: Radiology: Hospitals' Biggest Opportunity Needs a Quality Standard By Frank Seidelmann, DO, Chairman and CMO, Radisphere The Opportunity of Radiology R adiology is one of the largest spend categories at most hospitals, representing nearly 10 percent of annual commercial healthcare spending in the United States. It is also a rapidly growing category: The Advisory Board Compa- ny expects that total radiology spending will increase by nine percent year-over-year through 2018. The potential economic value of the radiology department should not be underestimated. Imaging is the largest source of outpatient profits for many hospitals, contributing as much as 35 percent to the bottom line. That figure is almost three times that of the nearest service line. The importance of radiology services becomes even clearer when one considers the critical role it plays in so many different fields of medicine. Because radiology touches nearly every patient and disease category at hospitals, the specialty is a leading driver of hospital success on critical metrics like pa- tient safety, referral patterns, emergency department through- put, length of stay and the overall patient experience. When considered in its entirety, it becomes clear that the influence of radiology on the cost and quality of care across the entire health system is even larger than profit statistics suggest. The Challenge for Hospitals It is clear that the significant growth in radiology represents a major opportunity for hospitals to improve their critical met- rics while also increasing profitability. Actually achieving these results means overcoming significant challenges. Despite the importance of patient care to hospital economics, radiology lags substantially behind other healthcare practices in terms of efficiency, quality standards, effectiveness of service and even the scalability of its basic delivery model. There is no recog- nized governing body for radiology that has clearly defined what acceptable (or, for that matter, exceptional) procedure should look like. This makes it difficult for hospitals to imple- ment and measure successful programs, which in turn prevents them from enjoying the benefits of radiology's growth. In addition to process and quality control challenges, staff- ing and specialization also present obstacles. Because radiolo- gy encompasses so many subspecialties, it can be difficult for a hospital to develop a staff that can cost-effectively address all their potential patient needs. The Journal of the American College of Radiology estimates that a practice of at least 20 ra- diologists would be required to cover all the fields of radiology with adequate subspecialty expertise. This sort of scale is out of reach for many institutions, which means that most imaging studies end up being read by general radiologists. Some specialty reads are subcontracted to private practic- es, but the fragmentation of the provider landscape prevents that from solving the scaling problem; there are more than 25,000 radiologists in private practice and more than 3,000 radiology groups, and only 15 of the largest practices in the United States have more than 65 radiologists. Costs of Ignoring the Problem Staffing challenges eat up management time and lead to two interrelated problems that transform radiology from a growth opportunity into a drag on profitability. The first prob- lem is an increase in the rate of erroneous reads caused by inadequate subspecialization resources. Recent research has indicated an average documented error rate in radiology of 4.4 percent across modalities and up to 9.2 percent depending on the type of studies interpreted, modality mix and subspecialty expertise. This high volume of potentially misdiagnosed cases leads to significant increases in downstream healthcare costs, which will gain increased urgency as incentives align under risk-based reimbursement and new delivery models. As an example, consider the use of MRI to diagnose pa- tients with suspected lumbar disk herniations. In such a case, a misdiagnosis caused by a poorly interpreted image could lead to an unnecessary back surgery costing more than $30,000. The implications of this error for both quality of care and cost are obvious. This increased error rate is compounded by the second problem: overutilization of radiology resources by other departments. JAMA Internal Medicine estimates that between 20 and 50 percent of inpatient diagnostic imaging is clinically unnecessary, and this overutilization is receiving increased attention as the healthcare industry moves towards risk-sharing and value-based models of care. Overutilization also increases risks for the patient, as it subjects them to unnecessary and excessive radiation exposure. Inconsistent Standards and Fragmentation All of these issues are exacerbated by the fact that radiol- ogy lacks any common standards or benchmarks for basic service levels. Hospitals looking to improve their performance must do so largely on their own, as external standards do not exist for turnaround times, consultations or even the communi- cation of critical findings (which is the leading cause of mal- practice claims for both radiologists and hospitals). Even among the hospitals in a given health system, several different and incompatible quality measures, technologies and operational approaches may exist. It is not uncommon to find health systems that are operating in a highly fragmented environment where each hospital has its own local radiology group, each of which operates without any common standards or reporting platforms. This system becomes even more fragmented once the individual radiology groups begin managing their own con- tracts with third-party after-hours reading services that help fill in schedule gaps and subspecialty needs. Standards of care quality — assuming they exist in any meaningful way — become more variable as multiple different subcontractors (overseen by completely separate teams) begin providing reading services for the health system. Profitability also drops as out of pocket expenses for pre- liminary reading services, such as stipends, nighthawk service fees, transcription services and extra technology expenses, increase. These costs can range from $250,000 to $500,000 Sponsored by: Radiology: Hospitals' Opportunity Needs a Quality Standard

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