Reverse-auction process for teleradiology creates a stir

November 4, 2008

A new eBay-like model for radiologists in which the lowest bid wins a contract has alarmed some people. They cite patient safety and quality as concerns, while others claim this move is the next step for radiology.

A new eBay-like model for radiologists in which the lowest bid wins a contract has alarmed some people. They cite patient safety and quality as concerns, while others claim this move is the next step for radiology.

Neuroradiologist Dr. Daniel Roubein launched Telerays in October. Hospitals and imaging centers post their requests for reads on the HIPAA-compliant website of the Houston-based business, and radiologists preapproved by the hospital or imaging center bid on the contract.

For instance, a San Francisco imaging center requests interpretation of 70 MRI studies between 8 a.m. and 5 p.m. Monday through Friday from Dec. 1 to Dec. 30, with a 24-hour turnaround for final reports at $30 per study. A radiologist group in Charlotte, NC -- preapproved, licensed, and credentialed -- submits the lowest bid and wins the contract. Throughout December the Charlotte group receives postings in the Telerays Reading Room, downloads each case, interprets them, and uploads final reports. The San Francisco imaging center downloads final reports and places them in the patients’ medical records.

Telerays then takes 15% of the profit.

As of Oct. 29, 100 radiologists had registered for the credentialing process, according to Roubein. The credentialing process takes anywhere from seven to 30 days, with no membership fee for doctors or clients.

To become licensed and credentialed with Telerays, the radiologist must be certified by the American Board of Radiology, provide copies of each current state medical license showing the expiration date, show proof of current medical malpractice insurance, and submit a resume. Even though most hospitals conduct their own credentialing, Roubein said it is important to establish a quality baseline.

“In this fashion, it really can act as a complementary function to any credentialing process a hospital or imaging center may have in place already,” he said.

The first auction is planned for early 2009, but Telerays hopes to have one before the end of the year, according to Roubein.

The reverse-auction model is the next step for teleradiology, according to Roubein.

“Certainly change is difficult. As much as it was difficult for clinicians and radiologists to accept teleradiology 10 years ago, it may be somewhat difficult for them to accept another change. But I believe it’s a natural progression, and this will serve the patients well and give the hospitals access to radiologists they may not otherwise have access to,” Roubein said.

Among those who signed up to join the bidding process is Dr. William Glenn, 65, who started his own radiology practice in Manhattan Beach, CA. He sees Telerays as a way to supplement his income and share his expertise.

“I’m older than some of the young radiologists who are easy candidates for credentialing with teleradiology companies like NightHawk,” he said. “I think this is using the Internet the way it was intended to be used.”

Another who signed up for the bidding is Dr. Daniel Resnick, 33, of New York City, a musculoskeletal radiologist.

“I signed up because I believe in the future of teleradiology,” Resnick said. “By eliminating the middle man, by taking a smaller cut, there is more exposure to certain cases.”

The Telerays model will put more money in the hands of radiologists as well as benefit hospitals and imaging centers by lowering the cost of interpretations, Resnick said. While Telerays may provide an impetus to lower cost readings, other teleradiology groups find its foray into the eBay-like system troubling.

On one level, the reverse auction model is a very clever idea, if one believes radiologists’ interpretive services are truly a commodity, said Dr. Giles Boland, vice chair of radiology at Massachusetts General Hospital and author of “Teleradiology coming of age: winners and losers,” published in the May American Journal of Roentgenology (2008;190:1161-1162).

But radiology interpretative services are not a commodity, Boland said. One radiologist is not as good as another

“While I cannot guarantee that patient care will be inferior through this mechanism, it certainly is very much at risk for it,” he said.

Since the contract goes to the lowest bidder, the risk is that the radiologist -- to make any money -- reads so quickly he or she will start making mistakes, or will not look at the study long enough to be able to absorb all the information on the film, Boland said.

“Remember, we’re talking about patients here. We’re actually dealing with people’s lives,” he said.

There is a lot more to teleradiology than price. Quality is important and not something that can be commoditized, said Ed Bachmann, vice president of sales and marketing at Aris Teleradiology. Roubein agreed.

“We believe [quality] is the lifeblood of the company and it is the responsibility that we have to the patient,” he said.

Often a low price comes from a solo provider, someone who may not necessarily be able to provide the service the client is looking for, said Joanne DeAngelis, COO at Complete Radiology Reading Services, a teleradiology firm.

A solo provider may not be around to answer a technologist’s questions about protocol or the read. Teleradiology firms always have radiologists on hand to answer questions, she said.

While Telerays values quality, the firm can only go so far. The rest is up to the radiologist conducting the read.

“It is still incumbent upon that radiologist to make sure the appropriate amount of time is spent on the case and that important findings are called to the clinician that ordered the test,” Roubein said.

Critics argue that a price-driven system could eliminate other factors that are now part of the teleradiology process.

Radiologists, and specifically teleradiologists, who aim to supply a quality service that incorporates such factors as customer service, technical support, quality assurance program, Joint Commission on Accreditation of Healthcare Organizations accreditation, functional medical staffs, fellowship-trained physicians, and sophisticated workflow distribution to provide fast, high-quality service, still have to pay for these components, according to Jesse Salen, vice president of sales and technology at Online Radiology Medical Group.

“Creating a price-based reverse auction system that treats radiologists like a true commodity in the economic sense of the word cannot work because intelligent consumers demand more from a radiologist than just price,” he said.

As a quality control measure, Telerays will create an 10-member advisory panel, including private practice and academic radiologists, to review a sampling of the radiology interpretations and take appropriate action when necessary, Roubein said.

For more information from the Diagnostic Imaging Archives:

Radiology could face disruption under ‘spot market’ for image readsWhen low bids win, radiologists lose outEx-White House health IT czar sees bidding for image reads