Leadership and new thinking needed to preserve hospital practice contracts

May 3, 2010
John C. Hayes

The landscape for hospital-based radiologists has shifted dramatically in the last couple of years. They’ll need to update their thinking if they hope to preserve their hospital contracts, and perhaps, a significant role in medicine, a pair of presenters said Sunday at the American Roentgen Ray Society meeting in San Diego.

The landscape for hospital-based radiologists has shifted dramatically in the last couple of years. They’ll need to update their thinking if they hope to preserve their hospital contracts, and perhaps, a significant role in medicine, a pair of presenters said Sunday at the American Roentgen Ray Society meeting in San Diego.

Speaking with Diagnostic Imaging in advance of a special forum on practice business issues, Drs. Lawrence Muroff and Alan Kaye described dramatic changes that have roiled the working relationship between hospitals and partnership-based radiology practices. Muroff’s address, “Why radiologists are losing their hospital contracts: Is your contract safe?” identified some of the factors making it easier for hospitals to drop radiology contracts. Kaye’s address, “Leadership challenges for radiology in the future,” looked at the role of leadership in meeting the challenges now facing radiology practice.

Both sets of comments had at their core a major shift in the field of radiology from the early part of this decade when there was a shortage of radiologists and traditional patterns of business reigned to today, when there is probably a slight surplus. This, combined with cultural changes, new business models, downward pressure on reimbursement, and the technology to distribute image interpretation workloads across the Internet has made it easier than ever for hospital administrators to drop contracts with practices they are dissatisfied with, for one reason or another.

“This is happening all over the country,” said Muroff, president and CEO of Imaging Consultants and the organizer of an annual radiology practice and economics conference for more than a decade. “We hear about the high-profile cases such as Toledo, Orlando, and Sacramento. What many radiologists don’t understand is that this is happening all over, and it is hitting small, medium-sized, and larger groups. The idea that size protects you is a myth.”

It is also a myth that good quality protects the group, Muroff said.

Today’s expectation is that all radiologists will be good. As a result, they are judged on things other than quality, such as service and alignment of goals with those of the hospital, Muroff said.

“When groups are displaced, generally the reason given is quality. But in my experience that is rarely, if ever, the case,” he said. “Often the replacement group is of lesser quality.”

Compounding the problem is that replacing radiologists seems fairly easy. Once, people thought replacing a radiology practice was not a collegial thing to do. That feeling has dissipated, Muroff said. Any hospital that sends out an RFP for services will get several responses, even from a distance away.

There’s a new group of nontraditional competitors who can come in and take over a contract. They can put in their own radiologists or set up some combination of onsite and teleradiology service. Or they can absorb physicians from the displaced practice and add others in an employment model, Muroff said. There are also well capitalized and business savvy companies actively marketing to hospital administrators.

For Kaye, a radiologist at Advanced Radiology Yale New Haven Health Consultants at Bridgeport Hospital in Connecticut, part of the solution is good leadership in these challenging times. One element of this is creating a sense of urgency.

The sense of urgency already exists, thanks to various cuts in reimbursement, including laws such as the Deficit Reduction Act, Kaye said. Also, there are a host of new questions being raised about the value of imaging, among them articles in the New England Journal of Medicine questioning the value of CT colonography.

“You’ve heard quotes that 30% of diagnostic imaging is unnecessary?” Kaye said. “We’ll face a much higher bar for proving the efficacy of imaging.”

Changes in business practices are also promoting a sense of urgency. Teleradiology companies and others are trying to wrestle contracts away from radiologists, arguing the hospital’s interests may not be concordant with the radiologists’ interests, Kaye said.

Among the characteristics of good leaders are to have a good work ethic and be a good role model. Good leaders need to understand that service to the group and the department is most important, not self-aggrandizement, Kaye said.

“If you have those things, you are halfway there,” he said. “You really start getting the respect of your peers when you are successful.”

Generational conflicts may pose a challenge for leadership, Kaye said. Younger radiologists tend to want more balance in their lives and are perceived by their older counterparts as not working as hard. Some senior radiologists, on the other hand, may not accept changes that will require they work harder, even if it is in the long-term interest of the group.

Even radiologists who are not group leaders need to understand the role leaders play and to support them in it, Kaye said. Groups need to accept they have leaders and these people have special skills and should be given free rein to use them, particularly when it comes to dealing with administrative issues.