An engine is driving the U.S. imaging center industry slowly butsurely toward consolidation of independents into regional andnationwide chains. While the octane in the fuel that feeds thisengine is regulatory restriction of referring physician
An engine is driving the U.S. imaging center industry slowly butsurely toward consolidation of independents into regional andnationwide chains. While the octane in the fuel that feeds thisengine is regulatory restriction of referring physician ownership,other market forces favor centralized administration of multiplecenters, according to Janet Hix, sales manager for Dalcon ComputerSystems.
Tightening reimbursement for imaging procedures and competitiveregional imaging service markets are forcing centers to run leanerand more efficiently, she said.
"It (imaging center administration) is moving toward centralizedsystems. Much of this comes from the need to operate with fewerpeople on a system--and the need to have more control," Hixtold SCAN.
Some regional imaging center markets are nearing saturationin MRI installations, which makes for a tough battle over servicerevenues. There are so many MR scanners in northern New Jersey,for instance, that the state has put a halt to new system purchases,she said.
"Over the years, imaging centers have become so competitivethat we will probably see some closing. Some centers are not veryprofitable, so management groups are not interested in takingthem over. Yet they will not be able to continue under their currentkind of management," Hix said.
Consolidation of the industry will lead to increased use ofhigh-capacity management information systems, she said.
"As radiology groups consolidate and imaging managementgroups buy more centers, there will be a greater need for largersystems to process data associated with the billing and economicfunctions of the group," she said.
Dalcon provides radiology information systems targeted at imagingcenters and center chains. The Nashville software firm runs itsImaging Center Information System (ICIS) RIS exclusively on IBM'spowerful RS/6000 Unix workstation. This workstation offers advantagesin its open-system operations, speed and access to the extensiveIBM service force, she said.
The average ICIS installation is a multiple configuration ofperhaps three to five imaging centers with 20 to 50 terminalsall sharing one patient base, she said. ICIS can cost anywherefrom $80,000 to over $1 million. Average system prices range from$250,000 to $500,000.
Dalcon originally developed ICIS under contract to center firmMedInc (now ImageAmerica), also of Nashville. Four years ago,the firm was freed up to sell ICIS to other imaging centers. Sincethat time, ICIS software has been rewritten in more efficientfourth-generation programming language, Hix said.
ICIS is used by 67 imaging centers, making Dalcon the top RISsupplier in this niche, Hix said. Since the number of imagingcenters in the U.S. is well over 1000, there remains considerableroom for the firm to build market share.
DALCON'S PRESENCE IN THE FIELD provides it with a unique vantagepoint to spot imaging center trends. The word it hears most oftentoday is acquisition.
"Most of our clients are actively looking for centers rightnow," Hix said. "In fact, we help them look. As we travelaround the country, we meet with many centers. Frequently, wewill know of a center that is in a position where it needs tobe acquired."
Centers that form part of a chain can utilize centralized administrationto enhance specialization in front-office (scheduling, transcription,patient registration and contracts) and back-office (billing andcollection) tasks, she said.
"You can specialize much more if you have a centralizedsystem, with people who are actually managing large amounts ofdata, than you would if they are dispersed and one person is doingmultiple tasks," Hix said.
Placing multiple imaging centers on one computer platform alsoenhances the ability to track patients who move between centers,she said.
While Dalcon currently uses only the IBM workstation platform,a centralized ICIS could run on a larger IBM mainframe with thepower to manage data from a large number of centers, she said.IBM is placing its AIX Unix operating software on its mainframecomputers, so ICIS could function on this platform, Hix said.
The Unix open-system nature of ICIS allows for ease of connectivitybetween centers and also with nonproprietary picture archivingand communications systems, she said.
"It would be difficult if we were to try and write a PACsystem. That is a whole different technology. Integration withPACS is very simple for us. We download the patient informationand they surround that information with their images," Hixsaid.
Vortech is one PAC system that Dalcon frequently runs intoin the imaging center field. The two open systems link togetherwell, she said.
"I rarely recommend any (system) other than Vortech whena center is looking for a PAC system," Hix said.
Health-care workers in professions designated by the law haveuntil January 1996 to divest ownership of facilities to whichthey self-refer. The law contains a number of exemptions, suchas for in-office services, and services within an HMO and withina group practice.