Hospitals lose out when imaging moves to private offices

February 18, 2009

Use of noninvasive diagnostic imaging rose 63% at private imaging facilities between 1996 and 2006, suggesting that hospitals lost a business opportunity, according to a study in the Journal of the American College of Radiology.

Use of noninvasive diagnostic imaging rose 63% at private imaging facilities between 1996 and 2006, suggesting that hospitals lost a business opportunity, according to a study in the Journal of the American College of Radiology.

Dr. David C. Levin, former chair of radiology at Jefferson Medical College of Thomas Jefferson University, and colleagues examined nationwide Medicare Part B databases from 1996 to 2006 looking for noninvasive diagnostic imaging (NDI) codes compared with place-of-service codes (J Am Coll Radiol 2009;6:96-99).

The researchers found Medicare NDI utilization rates per 1000 patients increased at all four places of service: hospital inpatient, hospital outpatient, private office, and emergency department. The rate grew 15%, from 1056.5 to 1211.8, among hospital inpatients -- the lowest increase, according to the researchers.

Hospital outpatient facilities saw an increase of 25% from 793.4 to 993.2. Rates at private offices or imaging centers jumped 63% from 883.3 to 1442.2. Though utilization rates in emergency departments were considerably lower than in the other places, growth was fastest at 77% (222.1 to 392.2). Total outpatient imaging rates rose 45% from 1676.7 to 2435.4, the researchers said.

Hospitals' share of the imaging market dropped from 47% in 1996 to 41% in 2006 due to rapid growth in private office imaging, as nonradiologist physicians started doing more imaging, according to the study. Utilization rates grew 71% among that group compared with 44% among radiologists.

A shift from the hospital outpatient department to a private office could mean that imaging is going to a radiology office or a radiology-owned imaging center, Levin told Diagnostic Imaging.

The trend is not a loss for radiologists because even though imaging may take place elsewhere, the radiologist still has to interpret the study. Instead, putting imaging equipment in private offices is bad for the healthcare system and for hospitals, he said.

"As you can well imagine, somebody who puts in a $1.5 million or $2 million piece of equipment is going to want to make sure that gets very well utilized. So I think what that leads to is overutilization," he said.

More imaging in private offices also means that hospitals have missed out on a business opportunity, Levin said.

"Hospitals just didn't see the rapid growth in imaging and didn't put in enough equipment to meet the demand. So radiologists put the equipment in themselves in their own private offices, and they benefited from it financially," he said.

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