Ex-White House health IT czar sees bidding for image reads

September 4, 2007

A healthcare investor and former White House healthcare IT official sees a time in the near future when "spot markets" for image interpretation services have radiologists bidding on work that most of them provide under contract today.

A healthcare investor and former White House healthcare IT official sees a time in the near future when "spot markets" for image interpretation services have radiologists bidding on work that most of them provide under contract today.

Dr. David J. Brailer is the former national coordinator for health information technology and current head of a healthcare venture capital fund. He recently told radiologists and healthcare IT experts that he's reviewed proposals to set up systems whereby radiologists could bid to interpret images delivered via the Internet. His comments, made at a conference in San Francisco in June sponsored by Agfa Healthcare, were part of a wider discussion that focused on healthcare IT innovations along with the disruptive economic effects they are bringing to all of medicine.

Image interpretation via teleradiology is an area ripe for discipline from a market for spot imaging, Brailer said in an interview with Diagnostic Imaging.

"This is about a group of radiologists saying they will be available for overflow, spot readings, or systematic participation in readings from a remote location. It allows a hospital or imaging center to manage overflow and to have an array of suppliers to respond to some deficit," he said.

Spot markets for some medical services are already in place. Online systems allow nurses and hospital staff, for example, to bid for work shifts. While such systems have been discussed in some settings (See "Perturbations," August, page 56), at press time, no evidence showed that an actual spot market for image interpretations had emerged.

In Brailer's view, when that happens, there will be both winners and losers in the radiology community.

"If you're a radiologist with a lock on the market and you're getting monopolistic rents, you should worry," he said. "But if you're the typical radiologist who is overworked and on call way too much, I think it's a boon. Clearly, in the end, it will shift power to those who purchase radiology services, which is a hospital or health plan. It really is a classic example of a transparent, more efficient marketplace."

Radiologists who have heard of these schemes see potential for ruinous competition, but Brailer said they shouldn't worry because there is an overall shortage of radiologists and the volume of images continues to increase.

"Across the board it's a benefit to all radiologists," Brailer said. "Some might not like it, but typical radiologists will welcome it as they see the benefits to them. My guess is that a large share of radiologists will be participating in spot markets at some point. It's a great income supplement."

Just as teleradiology could bring huge changes to radiology, so will healthcare IT affect the larger medical community. Like radiologists, others in healthcare will need to adapt quickly.

"IT is not only empowering change with good things-it is profoundly disruptive," Brailer said.

Ultimately, the IT and digital revolution will separate doctors and hospitals into two groups: those leading the way to better prevention and wellness systems and those who don't take advantage of changing opportunities and find they've run out of options.

"It's about strategic context and how to build on that," Brailer said.

You can assume that these changes won't occur, but by the time you figure out whether they are taking place, it may be too late, he said.

"The marketplace will be quite unkind to those organizations that five to 10 years from now can't achieve more efficiency," he said.

As a healthcare IT advocate in the White House, Brailer said that one of his goals was to stave off greater regulation of the healthcare IT marketplace in the interest of allowing new ideas that bring more efficiency to healthcare to thrive and take hold.

In many instances, they have, especially at the state level, he said.

Brailer was less sanguine about the prospects for healthcare reform at the federal level. The conventional wisdom in Washington is that healthcare reform will not win votes, only lose them. Bureaucratic mindsets, especially in Medicare, are also an obstacle.

Current projections predict that Medicare will be insolvent in 2017, but that conclusion includes some unrealistic assumptions, among them a 25% reduction in physician payments over the next five years. Without that cut, the insolvency date is just six years away, Brailer said.

As the Medicare trust fund shrinks, solutions will increasingly rely on reducing the amount of services provided and paid for. One unfortunate consequence of this is that costs associated with nontreatment don't get counted and continue to mount up.

Smart policy makers are beginning to realize that "demand side management" by itself won't work, and they are now looking at adding supply side management to the equation. This style of regulation disappeared in the 70s with the demise of things like certificates of need, community review, and community rating, but it could return, Brailer said.

Brailer's projection for the U.S. healthcare system as a whole is for a continuing decline until the public becomes fed up and demands changes. These changes will depend on who holds office in the executive branch and Congress and on how the various interest groups-physicians, hospitals, health plans, and pharmaceutical companies-align, he said.

John C. Hayes is editor of Diagnostic Imaging.