The World Health Organization says, “medical imaging, especially X-ray based examinations and ultrasonography, is crucial in a variety of medical setting [sic] and at all major levels of health care.”1 WHO goes on to opine that, “Effective, safe, and high-quality imaging is important for much medical decision-making and can reduce unnecessary procedures.”1 The healthcare industry is challenged with maximizing the perceived value of imaging. In the current economic landscape of the U.S., operating margins for healthcare systems are deteriorating.2 It has become more important than ever to highlight the value of radiology as a contributing factor in the viability of the business.
Complexities of the radiology value chain
Consider the value in a retail business, such as selling running shoes. The individual who purchases the sneakers is generally the only one who derives value from them. That perceived value determines the price the buyer is willing to pay, which in turn influences the price at which the vendor can sell the shoes, hopefully still maintaining an acceptable profit margin.
Healthcare, however, operates on a different value proposition than commodities. In this country, healthcare billing is generally based on a traditional fee-for-service model. Providers are often paid by insurance companies or governmental agencies.3 Thus, the path between value and end cost is not necessarily straight and obvious, as it is with the above example.
Radiology is one element of that equation, and a dynamic one. RSNA explains why. “Multiple distinct entities purchase, consume, and influence the cost of radiology’s primary product: images and image-informed information. Consequently, the value and cost of radiology are highly diverse among many health care stakeholders.”4 Their 2017 article describes patients, employers, and government agencies as end-purchasers. Yet the flow of payment is initiated by a referring physician, a downstream link in the value chain who does not incur the cost of imaging or ultimately benefit from its purchase.4
In the absence of a direct purchasing relationship, it becomes more difficult to assign a dollar value to the service. You might compare it to a college track coach ordering the running shoes because he wants his team to win, with the university paying for them. But neither party to the transaction has first-hand knowledge of how the shoes feel or fit or perform (value determinants).
To arrive at a socially acceptable cost of producing imaging services, the healthcare organization must evaluate perceived value throughout the chain, from facility to physicians and patients.
Demonstrating value in the shift from quantity to quality
The Centers for Medicare and Medicaid Services (CMS) has led a reform from a quantity-grounded healthcare system to an outcome-based approach. This focus on value-based healthcare is intended to improve patient experiences while reducing the cost for delivery of service.5
Today a patient would probably be wary of having surgery on an injured ankle or scheduling cancer treatment without having undergone some diagnostic imaging. It could mean a surgeon or physician would essentially be performing “blind” without that information. So, why dissect what is clearly necessary to modern medical treatment? Because the value of radiology extends beyond the imaging suite.
Effective treatments result in improved patient outcomes. That translates to fewer unnecessary or repeated procedures and potentially shorter hospital stays – all vital factors in patient-centric care and healthcare cost control.
Radiology is an asset to the healthcare organization’s reputation, as well. Efficient, effective treatment garners support of referring physicians and the community in general. It could also stimulate crossover interest from neighboring health systems who do not offer the same array of services.
Determining the value of radiology (rather than assigning a price tag based on the cost to produce the service) helps the facility plan hiring and expansion, rate contracts, and gauge the impact of new equipment on operating expense while preserving margin.4
What can be done to enhance the perceived value of the radiology department?
This shift brings additional scrutiny to the value of radiology services. A 2017 article in Radiology Business emphasized the need for radiologists to increase the visibility of their influence on patient care and the value associated with their services.6
The article makes these suggestions:
- Establish a straightforward connection with patients, discussing findings directly, and guiding general next steps (as appropriate). While the patient benefits from the radiologist’s expertise, such positive interactions also draw the attention of leaders in the organization.
- Communicate, coordinate, and collaborate with referring physicians. Reduced turnaround times and a good rapport are advantageous to the patient while cementing a referral stream from the physician.
- Get in step with administration. Radiologists need to have a clear understanding of the objectives and challenges of the organization. Radiologist accessibility to hospital administrators helps to align financial constraints with equipment needs to provide desirable services.
- Take an active role. Radiologists are extremely busy, but taking part in committees, attending conferences, and participating in research brings additional value to the role. How? By providing input that guides equipment purchases and identifying imaging needs that could be addressed at the facility.
- Take a forward-thinking approach. Embrace emerging opportunities to illustrate the value radiology brings to the patient, the healthcare organization, and the community. That could be anything from case studies to social media.6
Merriam-Webster defines “value” as “a fair return or equivalent in goods, services, or money for something exchanged.”7 The relative worth of radiology can be measured in quality of life and lives saved or extended.
- Diagnostic imaging. World Health Organization. https://www.who.int/diagnostic_imaging/en/ October 21, 2019.
- Study: Health system margins dropped 40% after ACA. HealthExec. https://www.healthexec.com/topics/healthcare-economics/study-health-system-margins-squeezed-after-aca October 21, 2019.
- What Is Fee-For-Service? TXCIN. http://www.insight-txcin.org/post/what-is-fee-for-service. October 21, 201.
- Costing in Radiology and Health Care: Rationale, Relativity, Rudiments, and Realities. Radiological Society of North America. https://pubs.rsna.org/doi/full/10.1148/radiol.2016160749 October 21, 2019.
- Quality Over Quantity: What Value-Based Care Means For Providers. TXCIN. http://www.insight-txcin.org/post/quality-over-quantity-what-value-based-care-means-for-providers October 21, 2019.
- Taking a Seat at the Table: 5 Ways Radiologists Can Demonstrate Value and Increase Their Influence. Radiology Business. https://www.radiologybusiness.com/topics/leadership/taking-seat-table-5-ways-radiologists-can-demonstrate-value-and-increase-their October 21, 2019.
- Definition of value. Merriam-Webster. https://www.merriam-webster.com/dictionary/value October 21, 2019.