Law and regulation replace tech advances as agents of change

November 1, 2007

For a long time, we've thought of technology advances as a main driver of change in radiology, but in the last year we've been reminded, very forcefully, that government can play a huge role as well. As nicely as things went for the first half of this decade, the outlook isn't so good for the second half.

For a long time, we've thought of technology advances as a main driver of change in radiology, but in the last year we've been reminded, very forcefully, that government can play a huge role as well. As nicely as things went for the first half of this decade, the outlook isn't so good for the second half.

If you have any doubts about this, just take a look at this month's cover story ("Whacked! Radiology recoils from DRA ax," page 46). Senior editor James Brice checked with some of the key players in radiology's world and identified a host of consequences, some of them quite dramatic, wrought by the implementation of the 2005 federal Deficit Reduction Act on Jan. 1 of this year. It was a bad law, passed in the dark of night with inadequate information and review (see X-Ray Vision, page 3, March 2006). Unfortunately, efforts in Congress to fix the law have failed to gain traction, and the problems it has caused are now becoming evident and rippling throughout radiology:

  • A major shakeout in the freestanding imaging center marketplace. Whether intended or not, imaging centers were directly in the path of the DRA and have borne the brunt of the billion dollar-plus cost. Many imaging centers have reportedly gone under or are going up on the auction block as salvage prospects.

  • A major drop in the amount of money spent on the technical component of imaging spending. Estimates range from $1.4 billion in the first year of the DRA cuts to $13 billion over a three-year period.

  • Falling equipment sales in the U.S. because of uncertainties from the DRA and other proposals from Medicare. Providers plan to upgrade less frequently, and equipment vendors are feeling the impact.

We should note that there are some silver linings to all of this. The consolidation of the imaging center market, while leaving fewer providers, will strengthen the bargaining power of those who remain. Our article explains how some imaging center providers are fighting back by becoming more efficient (with digital imaging technologies and informatics) and by making sure payers understand that fewer providers can deny access to patients and force imaging back into the more expensive hospital setting, thus reducing the ability of payers to control rates.

Still, the long-term picture is far from sanguine. If the Republican-controlled Congress acted arbitrarily by enacting the DRA in late 2005, the Democratic-controlled House was no kinder to imaging in proposing another round of equally draconian cuts as part of a bill to extend a federally funded healthcare program for children. As of this writing, the cuts had been axed in negotiations with the Senate and a presidential veto was threatened, but don't bet that these proposals won't return some time in the future.

The next skirmish in this battle will take place as Congress considers Medicare law updates this year. The American College of Radiology and its allies will fight further attempts to cut payments and are also pressing for mandatory accreditation of imaging providers, a step the ACR says can help control imaging utilization. It's an approach that makes sense and is based on a sound rationale: that imaging patients deserve an assurance of quality.

Against this backdrop, pressure for healthcare reform is building and will become a major issue in the 2008 presidential and congressional campaigns. Cost control will undoubtedly be part of the picture, and as long as both federal and private payer programs see medical imaging as a big cost driver, there will be additional attempts to rein in payments. As this happens, radiology and other medical specialties will need to remain in front of Congress to insist that cost controls in imaging be based on careful thought and sound policy, not the blunderbuss approach employed in the 2005 DRA.

What are your thoughts on this topic? Please e-mail me at jhayes@cmp.com.