News | May 10, 2007

DRA Causes Cuts in Capital Equipment for Imaging Centers

May 11, 2007 – Concern about DRA-mandated Medicare reimbursement cuts have prompted cuts in 2007 capital equipment budgets for almost half of the outpatient imaging centers that participated in a newly released study by IMV Limited.
“Although the McCarthy bill under consideration by the U.S. Congress offers a glimmer of hope that the revenue impact of the DRA cuts might be postponed or rescinded, over two thirds of the facilities in our study are taking the most conservative approach to operating under the present circumstances - proceeding as though the DRA rates will remain in effect permanently,” observed Mary C. Patton, director, Market Research at IMV. “For many of them, this translates into cuts in their 2007 budgets for acquiring new diagnostic imaging equipment.”
IMV’s new report, 2007 Outlook for U.S. Diagnostic Imaging Centers: Strategies for Competing in the Post-DRA Era, provides insights into imaging center administrators’ perspectives about the future of their facilities and the outpatient imaging market. The report is based on new primary market research involving 125 administrators from outpatient diagnostic imaging facilities located throughout the United States. The research found that outpatient imaging center revenues will be hard hit by the Medicare reimbursement cuts. In fact, over one quarter of the survey sample do not expect to see revenue increases this year on any of the imaging modalities they offer, while the majority of the sample expects lower revenues in one or more modalities, compared to 2006 revenues.
This research explores steps that imaging center executives are taking to protect their facilities from the full impact of cuts in reimbursement by Medicare and other third-party payors. Such steps include marketing strategies to generate new revenue sources, the acquisition of technologies to help them improve productivity, and the adoption of operational changes that will enable them to cut costs. The findings suggest that the fastest and easiest actions are the ones most likely to have already been taken during the first quarter of 2007. Such tactics include implementing new management information systems and adding second shifts to increase capacity.
The IMV research also explores the question of which types of diagnostic imaging equipment purchases are most likely to take place in 2007, versus which purchases will be postponed until 2008 or cancelled entirely. The survey found that less than one quarter of the survey sample plans to purchase any type of high-end diagnostic imaging equipment between now and the end of 2008. For example, none of the survey facilities will purchase 3.0 Tesla MRI systems this year, and less than 10 percent have acquired or will acquire 1.5 Tesla MRI systems during 2007.

For more information about IMV’s Census Databases and Market Reports, visit the corporate website at www.imvinfo.com or call 847-297-1404 to speak with a representative.

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