Bundled Payments Could Short Change Radiology

April 25, 2013

The possibility of moving toward bundled payments makes me nervous. If the hospital divides the pie, radiology services could get short-changed.

One thing is clear: The way radiologists will be paid in the future is going to change. Whether because of accountable care organizations (ACOs) or bundled payments, the days of fee-for-service appear numbered.

Everything I see, hear, and read about ObamaCare and healthcare reform points to declining physician reimbursement. With little to no ability to control malpractice insurance or office costs, physicians are feeling the squeeze. Most physicians I know have seen real reductions in income year after year for the past several years.

Like starving rats trapped in a box, this has led to some predatory behavior. Some are expanding their practices onto their colleagues’ turf. Angiography, interventional radiology, carotid ultrasound, and nuclear cardiology are good examples in our local radiology practice. Others are expanding their practices into non-traditional fields of medicine such as aesthetics, vitamin therapy and weight loss. I receive regular franchise solicitations for other ways to make a living with my medical license such as erectile dysfunction therapy. Come to think of it, ED may be a good metaphor for the state of modern medicine.

SEAK is a company that does very well promoting non-clinical careers for physicians. These careers range from expert witness testimony, medical consultant business, medical file review, and independent medical examiner businesses to careers in writing fiction a la Michael Crichton, Robin Cook, and A.J. Cronin. Based on the aggressiveness of their marketing and the activity on their group site on Linked In, there is a great deal of interest in their services. After all, surveys indicate up to 40 percent of practicing physicians are considering retiring or otherwise leaving clinical practice because of recent changes in healthcare.

Of all the proposed new payment models, bundled payments worry me the most. The term bundle is normally a positive, comforting one as in bundle of joy, a bundle of cash, or a bundle of cable services. In the case of payments, however, bundling has more ominous connotations, especially for radiology.

Bundling payments is similar to DRGs in that the third-party payer will pay a set fee for a medical event or service such as a hospitalization, illness or surgery. This payment will most likely include every aspect of care including hospitalization, medications, doctors, and all ancillary services, probably for a period of time before and after the actual event. The critical question: Who will the check be made out to? The answer: The hospital will probably be recipient of the bundled payment since it is almost always the largest component of the bill.

Presumably, the hospital will then decide how to divide up the pie and that makes me cringe. Based on my past experiences with numerous hospital administrations, I have never felt that radiology services have been valued very highly by them. They have been all too eager to give our procedures to other specialties as recruitment incentives. Top of the line equipment is purchased for these non-radiologists while we usually get to use outdated equipment well past its useful life expectancy or get low end replacement equipment. While I have known of many other specialties who have received a financial incentive from the hospital in the form of a medical directorship, I do not know of such an incentive for radiologists. I heard of a radiology group that had a medical directorship payment included in their contract, but it has never actually been paid.

Another reason for concern is best illustrated by a recent event at a local hospital. I usually spend nine to 10 hours sitting in a chair when I’m working my radiology job. Obviously, I consider the chair an important piece of equipment. After many years of use, the battered chairs in our department had become unbearable. Repeated requests to the hospital for replacements were denied and the radiology group had to purchase its own chairs.

Can you imagine the hospital telling the orthopedic surgeons they had to buy their own operating room table or arthroscopes? If the hospitals don’t think we deserve a chair to sit in, is there any reason to be optimistic about how generous they will be when they divvy up the bundled payment?