Teleradiology's relatively smooth sail into the waters of commercial success may be in for some turbulence as prices per read drop like a barometer in a hurricane. Most of the pressure forcing rates downward comes from the perfect storm of increased competition, reduced reimbursements, commoditization of preliminary read service, and continuing effects of the Deficit Reduction Act of 2005.
"The DRA hit the onsite radiologist and was passed to the teleradiologist," said Dr. Greg Rose, president and CEO of NightRays Radiology.
The overall declining state of the economy, together with decreasing healthcare reimbursements, plays a large part in the downward price pressures the market is experiencing. In the wake of the DRA, and in anticipation of the anti-markup rule and other reimbursement changes from the Centers for Medicare and Medicaid Services, hospitals, radiology practices, imaging centers, and mobile imaging providers have had to cut costs to remain afloat financially.
"It is only reasonable that they look to their teleradiology provider to share the pain," said Mark Stevens, COO of USTeleradiology.
Some radiology groups are covering more call on their own to keep costs down, resulting in increased savings for the practice but lower revenues for teleradiology providers. Another factor in the drop in price per read is the continued rise in the number of teleradiology groups, driven by steady industry demand from all imaging sectors for their reading services. Teleradiology has risen on the tide of unprecedented access to advanced imaging by an aging population. Emerging technologies have also broadened imaging indications.
"Teleradiology has become more than a convenient after-hours service," said Judith M. Turner, vice president of sales at ProScan Reading Services. "[It] is now more of a true problem solver."
The entry of more regional and local players into teleradiology increases pricing pressure on larger companies struggling to maintain market share. Smaller competitors are at times more nimble than larger companies and are able to compete on price.
