March 2013—Recently, the 2013 Q1 Medical Imaging Confidence Index (MICI) report was released. It contains responses from over 163 imaging directors/managers from throughout the country, representing hospitals with under 100 beds (46%), 100-299 beds (35%), and 300 or more beds (19%).
Interestingly, the results show absolutely no statistically significant change from the last two years (Q1 2011 to Q1 2013). This confirms my sincere belief that we (imaging administrators) are still operating with a high degree of uncertainty with regards to the impact of recently passed healthcare reform legislation on the imaging industry, as well as that of several years of relatively stagnant financial markets in healthcare in general.
Healthcare reform continues to drive reimbursements down and increase pressure on administrators to develop more cost-efficient ways to deliver service, while financial market trends have led to patients being much more cost-conscious of when they receive care and from which providers. To succeed, we need to change the way we do business.
From a “low confidence” perspective, across the country and in all three categories of hospital size, respondents appear to be in clear agreement that reimbursements from Medicare are inadequate to cover the expenses associated with providing quality imaging services. This is an age-old topic for discussion that I could write a thousand words on, and I am not surprised that respondents shared this perspective. CMS attempts to establish standard reimbursement rates for services based on “usual and customary” expenses associated with the provision of each service across the country. However, as we will all agree, this is not very easy to accomplish. Just think of all the factors that need to be considered with regards to “usual and customary,” from vendor impacts (price paid for equipment, pricing strategies, organization’s negotiating strength, GPO impacts, etc), to staffing challenges (shortages, salary range discrepancies by region, etc), to wide variances in access to services (eg, distance to services, uninsured populations, etc). The bottom line is that it simply does not currently cost the same amount to provide imaging services across the country; there are just too many variables at play.
The real point here is that whether you’re in agreement with the perspectives of the respondents or not, this consistent “low confidence” appears to coincide directly with the healthcare reform and market pressures noted above. In order to survive in the present and future, we must continue to identify and develop ways to provide imaging services at lower costs without compromising quality.
From a “high confidence” perspective, the 2013 Q1 report illustrates the following two key points:
- High confidence that imaging will maintain/grow as a profit center; especially in larger hospitals in the West North Central (Midwest) region
- High confidence that operating and salary expenses will remain constant for the next several months
I have to admit that these results are very surprising to me.
I can concur that historically imaging has been a major margin generator for hospitals, but moving forward, we will have to evaluate this reality through a new lens. Slowly but surely, imaging is being looked at as a cost. A cost to providers in Accountable Care Organizations, medical home pilots, and ever increasing “at-risk” contracts; and a cost to patients who now have much higher deductibles and out of pocket responsibilities to pay for their care (just look at the recent TIME magazine article on healthcare expenses if you want to have your head spin!). Further, and this is very scary to me, more and more quality is starting to be assumed. Imaging is becoming a commodity, with much more focus on cost than quality.
With these thoughts in mind, I was surprised to see that across the country and in all size hospitals, confidence levels remain high or very high for imaging to maintain/grow as profit centers over the next several months. I would have expected to see confidence lowering, as administrators work hard (and in many cases struggle) to develop newer, more cost effective ways to provide services so that they can (1) sustain past margins and/or (2) leverage themselves as the ‘low-cost’ provider of choice in negotiations for contracts with commercial payors, ACOs, medical homes, etc.
Additionally, with all of the financial pressures to provide lower cost services, I was amazed that the survey results show that confidence remains high that operating and salary expenses will remain constant for the next several months. How can this be?
At my organization, reducing expenses is a top priority for all service lines. Further, I have been involved with and led several reductions in force, major workflow redesign efforts, staffing realignments, and numerous vendor renegotiations all aimed at taking proactive steps to reduce operating expenses and provide more cost effective care. Whether we like it or not, this is the reality that we are now faced with in our industry. I would have expected to see the survey results much more strongly support this fact through decreasing confidence in this question.
In summary, I found the 2013 Q1 MICI report results to be very interesting. For each question surveyed, the results suggest that the confidence levels of our peers in imaging administration across the country and at all size hospitals are pretty much the same and further, have not varied to any statistically significant level for over two years. Most surprising to me, regardless of increasing healthcare reform and financial market pressures, is that the results suggest that our peers still have high confidence that imaging will remain a high margin generator for hospitals and that operating expenses will remain constant for the next several months.
Hopefully my perspective might simply lead you to consider a different point of view and more importantly, if you have not already done so, urge you to take the time to review the most recent MICI report (and to continue to do so on a quarterly basis!). The report represents the “feelings” of our peers across the country and can be a great source of conversation and debate amongst our own staff, hospital administrators, and fellow AHRA members as we proactively develop solutions to our shared and common challenges.
Jason Newmark, CRA is the director of diagnostic services at Baystate Medical Center in Springfield, MA. He is also the finance director of AHRA. Jason can be reached at firstname.lastname@example.org.