Much like many outpatient services affected by the Coronavirus pandemic in 2020, outpatient imaging centers have experienced increased patient volumes to process the backlog of deferred exams but radiologists expect a continued growth trajectory despite the current healthcare environment. Independent radiology groups often partner with hospital systems to provide imaging acquisition and reading services and are helping to address the growing demand. However, these partnerships need to strike a balance that delivers the patient care that the hospital systems’ patients need, while maintaining the level of technology needed to deliver those services, and oftentimes capital investments are required. Whether these relationships are brand new or long standing, traditional or joint-ventures, radiologists and practice administrators will, at some point, need to discuss the need for new capital expenditures with their hospital system partners to maintain clinical relevance for the patients they serve.

In a webinar hosted by GE Healthcare, Mark Lombardi, Managing Director of GE Healthcare Financial Services talks with Jeff Ronner, CFO of Shields Healthcare Group in Quincy, Massachusetts, and Chad Calendine, MD, Radiologist and CEO of Advanced Diagnostic Imaging, and President of Premier Radiology in Goodlettesville, Tennessee to discuss radiology’s potential for growth, capital expenditure proposal strategies and best practices that radiologists and administrators can use to develop successful partnerships with hospital systems.

Growing radiology after COVID-19

According to both panelists, there have been both short and long-term effects of the COVID-19 crisis as it specifically relates to outpatient imaging. After a short-term drop in volume when non-essential services were suspended, patient volumes ramped up significantly in the summer months and have been consistently exceeding baseline expectations on a weekly and monthly basis. Dr. Calendine pointed out that those volumes substantiate the importance of outpatient imaging to patients’ continuum of care, as well as the likely continued growth in outpatient imaging as patients feel safer in an outpatient environment than going to the hospital campus.

“There continues to be a need for these services, and we will find a way to support their continued growth,” said Dr. Calendine. “Despite the negative impact we’ve seen in the short-term due to the pandemic, we expect a long-term positive impact on the growth of outpatient imaging.”

Mr. Ronner added that though there has been little impact to certain services such as cancer related imaging, his group has seen an impact on outpatient imaging due to the lack of sports activities in the communities, but expects that volumes will soon be exceeding year over year benchmarks.

Expanding outpatient imaging

Knowing that their hospital partners have suffered revenue losses as a result of COVID-19, but recognizing the continued growth potential of outpatient imaging, the panelists spoke about supporting increased patient demand with necessary capital expenditures on new imaging technology, outpatient imaging centers, as well as Ambulatory Surgery Centers (ASCs). Both panelists agreed that hospital administrators are generally aware of the benefits of these investments and that they want to have a growing outpatient footprint and provide additional access points into their health systems. While the clinical benefits of high-quality imaging are well-known, radiologists also need to emphasize the value of their clinical expertise and reporting that go hand-in-hand with a capital investment in new imaging equipment.

“When it comes to discussing capital,” Dr. Calendine said, “We never take for granted that we need to focus on quality, patient experience and compassion. Our hospital partners expect it from us. And we are sensitive to each of our partner’s specific circumstances.”

The panelists spoke about the need to employ capital wisely and consider how the expenditure fits into the health of the hospital system as a whole, and also the other capital needs of the hospital system. There needs to be discussion around how the investment will be good for the patients, but also why it’s good for the business.

Level-setting imaging investment expectations

The players involved in capital expenditure discussions are relatively sophisticated and during a discussion about new imaging equipment or a major investment in an ASC or outpatient imaging center, whether it’s in a traditional partnership or joint venture, everyone needs to know exactly what to expect.

“In some of our partnerships,” said Dr. Calendine, “we are on board and investing our dollars right along side the hospital, so we’re together and aligned.” But regardless of the partnership’s structure, the total capital ask is one element that should always be transparent, according to Dr. Calendine.

It is important to understand that the return on investment will differ depending on the investment. For example, an investment in an ASC will typically take longer to generate a return, but that should be made clear in the initial discussions.

“You really have to get your hospital partners comfortable with the time frame involved in an ASC investment,” said Mr. Ronner. “There will be a waiting period, a longer process to get up and running, and a much bigger capital investment, which is fine as long as you have created a long-term perspective and transparency around the project.”

Developing a win-win partnership

In any capital investment discussion, the benefits of new technology investments should be weighed against the total capital environment of the hospital system, whether it can offer expanded clinical capabilities, workflow efficiency gains or open new avenues for patient care.

Ultimately, according to the panelists, hospital partners have limited capital resources and they’re looking to radiology to not only provide the best care for patients, but do it most efficiently, with more efficient processes in place to meet the needs of their health system.

“What we’ve found to be the most successful partnership strategy,” explained Dr. Calendine, “is to think about the situation from our partner’s perspective. If we think about their specific issues, how they can be addressed, and how they can be successful, we will come to a win-win scenario.”

“Understanding the benefit of their investment against the broader burden of the hospital system,” agreed Mr. Ronner, “we can see their perspective more clearly and adapt our services to better meet their needs.”

View the on-demand webinar, How can Radiology Leverage Finance to Bridge the Gap with Hospital Administrators.

This represents customer views. Customers did not receive financial support from GE Healthcare.

Nothing contained herein or in the webinar constitutes tax, accounting, financial or legal advice to any person.

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Radiology Partnerships and Capital Investments: Building a Successful Case for the Future

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