According to the World Health Organization, the United States spent 17.9 percent of its total gross domestic product (GDP) on healthcare in 2011.1 This was up from 16.6 percent in 2008, and represented the highest percentage in the world.1,2 Although this increase accounts for the development and execution of many advanced technologies and treatments, health policy makers found the escalation to be unsustainable. The Obama Administration’s Patient Protection and Affordable Care Act (ACA) — frequently referred to as the Affordable Care Act or “Obamacare” — has posed strategies to cut back on healthcare costs, while also providing coverage to uninsured Americans, effective Jan. 1, 2014.
Dealing With Declining Reimbursements
There is there no question that once in effect, certain aspects of the ACA will impact radiologists. According to Lawrence R. Muroff, M.D., FACR, CEO and president of Imaging Consultants, Inc., and Radiology Leadership Institute (RLI) board member, one effect radiologists can expect will be continued reimbursement cuts.
“We’ve seen it at the Radiology Leadership Institute annual event,” Muroff said. “Former senator Tom Daschle said that radiology had sustained 12 reimbursement cuts since 2005, and he indicated that there undoubtedly will be more on the way.”
One way that radiologists have dealt with declining reimbursements is by increasing
productivity. However, this response is unsustainable and can be unsafe. “When you think about radiology, you can think of it in terms of piecework or an assembly line. You can only do one procedure or read or interpret one study at a given time,” Muroff said. Increasing the speed at which radiologists read exams in order to increase productivity is fine up to a point; however, after that point radiologists become too hurried or a bit careless. Muroff stated that this could lead to incorrect readings and misdiagnosis, and actually decrease productivity by necessitating repeat exams.
According to Muroff, another problem with radiologists increasing productivity in response to reimbursement cuts is that it often forces them to neglect other non-clinical activities that are equally important. “Serving as a consultant, serving on hospital committees, building your practice and educating technical staff and referring physicians all make radiologists valuable in the hospitals they serve,” he explained. “If you’re just behind locked doors or at home in front of a reading station, you basically become a commodity.”
Adoption of Alternative Payments
Another phenomenon that will result with the adoption of the ACA is the widespread use of alternatives to fee-for-service (FFS) reimbursements. With FFS, healthcare providers are paid contractually what a third party payor — an insurance company, Medicare and/or Medicaid — is willing to pay for separate items and services rendered to patients during treatment of a given condition. FFS has been credited as a contributor to healthcare expenditure increases because it rewards quantity rather than efficiency.
There are several alternative reimbursement models available. One such model that physicians may see more of is bundled or episode payments. Instead of receiving money for each service, the hospital or accountable care organization (ACO) receives a single payment for a group of services — which may include multiple physicians and facilities — related to a particular condition.3 Another payment model is the pay-for-performance (P4P) model where physicians are reimbursed based on their ability to meet predetermined quality measures.4,5 P4P is an incentive for physicians to use alternatives that lower costs while also promoting quality of care.4,5
Muroff said that with the widespread adoption
of alternative payment models radiologists would need to educate themselves to ensure they are appropriately paid for their services. This will include finding out what payments they are entitled to, or what percentage of a payment goes to radiology if the ACO or some other population-based entity is paid a certain number of dollars per year or per member covered.
The Harvey L. Neiman Health Policy Institute (HPI), an initiative of the American College of Radiology, is beginning research to make sure that radiologists have the tools and information necessary to advocate for their appropriate pay in the face of alternative payments. “The college, through the Neiman Health Policy Institute, is starting to assess large amounts of data to see what, at least from a traditional perspective, radiologists have been entitled to or have been paid,” said Muroff. This information will allow radiologists to have accurate, unbiased, databased information that will support them when advocating for their pay.
Pressures for Employment
The switch from FFS to alternative reimbursement methods could lead to greater pressures for employment because hospitals, ACOs or other entities can more easily distribute payments if everyone is on salary. “If a hospital is getting a bundled/lump sum payment, you just pay the salaries, and if there is money left over you bonus people or the hospital administration, or reward shareholders,” Muroff said. He added that if there is not sufficient money hospitals could withhold portions of salaries until there is. This distribution will not be as simple if radiologists remain independent contactors.
Although the widespread adoption of alternative payments may make it more convenient to have radiologists on salary, this turn toward hospital or entity employment could pose a problem for many radiologists. One disadvantage is that radiologists’ expertise would be limited to a certain hospital or hospital system, rather than spread between multiple systems as is allowed by independent contracts. If radiologists want to remain independent contractors, knowing what payments they are entitled to makes it simpler for hospitals, and ACOs will be even more vital.
Shifting From Volume to Value
As alternative payment models become more widespread, more emphasis will be placed on the value of services rather than the volume. “Before, the more you did the more you got paid,” Muroff said. However, in order to cut back on healthcare spending the emphasis will likely be placed on how well physicians are taking care of patient populations. For radiologists this will mean performing studies more efficiently the first time around and communicating study results more rapidly.
This shift from volume to value will likely be a welcome change within a sector of the healthcare industry that has spent significant dollars on inappropriate imaging. “We know that there is a lot of inappropriate imaging — studies that are offered to protect against medical legal action or studies that were done because other images weren’t
readily available,” Muroff said. This is an issue that will hopefully be diminished with alternative payments that penalize physicians for unnecessary and inefficient techniques, and reward them for efficient and valuable practices.
The emphasis on value may also expand radiologists’ jobs. “Before, all we would do is interpret what was ordered. Now we might have to manage what’s ordered and actively become a member of the team that is providing health services to a patient,” said Muroff.
Impact on Radiology Vendors
The imminent cutbacks that will result from the ACA is unnerving to many physicians; however, many vendors at the 2013 Radiological Society of North America (RSNA) annual meeting in Chicago were optimistic — especially vendors of innovative imaging technologies and techniques.
While many of the vendors were anticipating a slight financial hit at the beginning of the ACA’s implementation, many saw the role that their technologies would play in lowering healthcare costs by allowing for accurate and quick diagnosis. “Radiation oncology has not felt the crisis in the same way that others have in the healthcare industry as a result of healthcare policy changes. In the radiation oncology world, policy makers are looking more at efficiency and quality of outcomes,” said Kelly J. Londy, executive vice president and chief commercial officer at Accuray.
Vendors’ confidence in their technologies’ ability to aid in the efforts of the ACA has been supported by several studies. In 2010, a paper in the Journal of the American College of Radiology (JACR) suggested that earlier imaging, and perhaps more imaging after hospitalization, leads to a more rapid diagnosis and a shortened hospital stay.6
“Maybe we’re not doing enough high-tech imaging,” Muroff said. “If the goal is to make diagnoses faster and to keep people who don’t need to be admitted out of hospitals, maybe these high-tech procedures can be instrumental in lowering costs by making sure that there are less unnecessary admissions or making more rapid diagnoses so that hospital stays are shortened.”
There are many changes that will result as the ACA is adopted, but the reality remains that the extent to which these changes will affect radiology is still widely unknown. The overall effect will be highly dependent on how the rollout of the law progresses. According to Muroff, this uncertainty surrounding the scope of the inevitable change has created anxiety amongst radiologists, as change typically does. “Nobody is quite sure about what changes need to be made in their practices,” he said
Despite the anxiety, most radiologists realize that the changes that the ACA seeks to implement are quite necessary. Healthcare expenditures have continued to increase in the face of a slowing economy, but the results of the use of these dollars have not necessarily been amazing. “We’re spending at the top, but we’re not at the top in terms of typical metrics for what you should see,” said Muroff, adding that the life expectancy of Americans is not higher than countries that spend less on healthcare. “There are a variety of things that tell healthcare policy makers that there has to be a better way to deploy the money that we are spending. It’s clear to the radiology leadership of every radiology society that change is not only inevitable, but also necessary,” he concluded.
1. World Bank, Health Expenditure, Total (% of GDP), http://data.
worldbank.org/indicator/SH.XPD.TOTL.ZS, accessed Jan. 6, 2014.
2. World Health Organization Global Health Expenditure Database, http://apps.who.int/nha/database/DataExplorerRegime.aspx, accessed Jan. 6, 2014.
3. American Academy of Pediatrics, “Alternative Payment Models,” http://www.aap.org/en-us/professional-resources/practice-support/Pages/P..., accessed Jan. 6, 2014.
4. State of Oregon, “Alternative Payment Methodologies Report,” http://www.oregon.gov/oha/OHPR/RSCH/docs/AlternativePaymentMethodologies..., accessed Jan. 6, 2014.
5. Silversmith J, “Five Payment Models: The Pros, the Cons, the Potential,” Minnesota Medicine, February 2011.
6. Batlle J, Hahn P, Thrall J, Lee S, “Patients Imaged Early During Admission Demonstrate Reduced Length of Hospital Stay: A Retrospective Cohort Study of Patients Undergoing Cross-Sectional Imaging,” Journal of the American College of Radiology 2010: 7(4): 269-276.