Feature | April 03, 2012 | Helen Kuhl

Teleradiology: A Changing Marketplace

A shift in players keeps competition strong, as turnaround time becomes the biggest factor in customer satisfaction

The landscape of the teleradiology marketplace continued to evolve in 2011, and it is likely that some of the changes that took place will to have an effect into 2012. Teleradiology trends were noted in a recent report, “Teleradiology Services 2011: Times are Changing,” compiled by KLAS.  Imaging Technology News discussed the findings with Emily Crane, research director/teleradiology for KLAS.

Among the significant activities of the past year were a few key acquisitions and mergers that took place, especially Virtual Radiologic’s purchase of NightHawk, the largest teleradiology firm in the United States, at the beginning of 2011. As the year progressed and NightHawk customers began to transition to vRad’s technology platform, there were challenges. KLAS reports that customer satisfaction with the new owner, especially in terms of turnaround time, dropped significantly. The next 12 months could see the migration of former NightHawk customers to new teleradiology providers.

Other acquisitions involved regional companies expanding into new territories. RadNet, an imaging company, entered the teleradiology market by buying Imaging on Call, a player in the Northeast. Onrad, which covered the western region, expanded in the central region by acquiring Meridian, a radiology group. StatRad did not buy anything, but expanded from the west into the central region; Rays also moved into new states.

“The central and eastern regions and smaller companies really stepped up to the plate to stay competitive,” Crane said. “They developed great technology and great service in order to stay in the game. They are able to provide high-quality service to customers who previously belonged to vRad and Nighthawk, so they are adding competition to the market.”

Speed Trumps Cost
According to the teleradiology customers interviewed by KLAS, which are primarily hospitals, turnaround time is the most important factor behind their satisfaction with their vendor, even more than cost. Because these hospitals are using teleradiology services primarily in the emergency department (ED) at night, turnaround must be fast.

“How quickly an ED physician can do an assessment and make a decision is critical to providing excellent patient care. Consistently quick turnaround time is what hospitals want,” Crane said. “In the ED, the speed at which things happen is amazing. They are so quick-paced in other areas that the demand on teleradiology becomes huge in order to keep up. With acute critical issues, every minute counts. So all radiologists recognize the huge importance of servicing EDs well to keep hospitals happy.”

Also important is the quality of communication provided by the teleradiology company, like letting the customer know the status of their reads, having a discussion to establish mutual understanding about the customer’s expectations — and especially providing quick access to the reading physician. The latter is an area that Crane believes will take on even more significance in the coming year.

“I think a lot of the focus will be on how companies deal with critical results, i.e., how well they perform in the area of physician-to-physician reporting, the direct voice-to-voice reporting,” she said.

Most of the customers interviewed for the KLAS report using teleradiology services for hospital EDs. Crane said orthopedics is another big area of use.

“Orthopedic reads for radiology groups is probably the other main use of teleradiology,” she said. “In this way, they can retain a piece of that business without having a person on staff. You need fellowship-trained specialists for orthopedics, and it is easier to get them through teleradiology. This situation is a little different from the hospital ED because in most cases, timing isn’t critical. The focus is more on quality; that’s why you need a specialist.”

Mistrust in the Marketplace
While radiology groups recognize the advantages of working with teleradiology companies, Crane said that an atmosphere of mistrust is another ongoing trend in the marketplace.

“Most teleradiology vendors have taken on contracts directly with hospitals, so radiology groups are distrustful of those companies now,” she said. “They don’t want their teleradiology company to take away their hospital customers. That has been a huge issue. If you bring in a teleradiology service to a hospital, you don’t want to bring in someone who is going to take away your contract. So there is a lot of mistrust going around.”

Another unique trend unveiled by the KLAS research was that among customers who said they intend to leave their current teleradiology provider, 22 percent said they plan to bring their reads back in-house. Crane feels this is occuring in part because they don’t trust that their teleradiology company is doing a good enough job.

“Some radiology groups have had a bad experience where the teleradiology vendors they have brought in have not been able to provide quick enough turnaround times,” she said. “They have felt like the company they are dealing with has put their hospital contract at risk. So they are bringing the reads back in-house to protect their contract.

“There also is the mistrust factor I mentioned earlier,” Crane added. “If they are bringing in a company to do reads at night, but it puts their entire hospital contract at risk to be taken away, they say maybe it’s time to bring someone on staff to handle night calls.”
But despite these challenges for most radiology groups, teleradiology is the most practical way to go. “On the one hand, with reimbursements for radiology going down, the physicians are making less and they want to cut back and save money as they can, which means cutting back on their teleradiology service to keep more money in their pockets,” Crane said. “It’s also hard for a group to maintain staff to handle calls at night when most of the industry doesn’t do it. There is resistance from staff members who are not willing to do rotations at night, and new recruits, especially the cream of the crop, don’t want to join a private group where they’ll have to be awake at night.

“And it usually is in the best interest of the patient to have a wide-awake radiologist read their scan at night,” Crane added.

KLAS is a research firm specializing in monitoring and reporting on the performance of healthcare vendors. For more information about the teleradiology report, go to www.KLASresearch.com.

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