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Managed Technology Services: A Solution for Rural Providers


This year, many hospitals will make the difficult decision to cut or severely reduce their budgets for imaging services. They've seen the price of maintenance fees and updates rise, only to be met with lower demand from patients. Such a trend is already prevalent in rural hospitals, many of which now only offer basic imaging services and lack the latest MRI, CT, nuclear medicine, mammography, and ultrasound equipment.

It takes a unique technological perspective to understand and value the advantages and clinical utility of today's state-of-the-art diagnostic imaging at full cost; such a view, however, is not universal, especially when faced with budget constraints. In the end, some providers must push the costs of staffing and maintaining the equipment down to the payers, causing patients to help carry the burden of the bill. While demand for CT and MRI systems show no signs of slowing, solutions should not force budget-conscious hospitals to wait for yesterday's technology to become affordable.

The solution lies in amending the relationships between hospitals and imaging equipment. Does a hospital really have to own a CT or MRI in today's market? What if leasing imaging services bridged the gap between patients and access to advanced technology?

Budget Concerns
In many ways, medical imaging is the driving force behind advancements in the medical practice. Physicians depend on its accuracy for patient diagnosis and interventions. Over the past 30 years, imaging has advanced, opening new ground for research and curing disease.

Today, these cutting-edge technologies that continue to improve our well-being are developed to operate in a standard hospital. However, despite their potential accessibility, imaging equipment comes with a significant cost—and not only from the original price tag. As with most technology, the quality of the diagnostic image depends on routine updates to maintain peak equipment performance. But unlike our smartphones and computers, updating the standard MRI scanner can come with a six-figure bill.

While imaging equipment is a standard part of some budgets, it can often be a target for budget cuts. The price behind owning, updating, and staffing imaging equipment remains lofty and can sometimes leave good doctors without the tools to provide quality patient care. To manage the life cycles of imaging equipment, hospitals can develop a plan for their upgrades or renewals. According to the International Atomic Energy Association, it is important to draw up a business plan that includes all costs associated with the life cycle of the equipment. Included among those costs are those for contract service, preventative maintenance, and major repairs.

Many hospitals will adopt a plan utilizing older equipment to save up front, but they are unaware of the operating costs associated with older systems as they age. According to The Fiscal Times, CT scanners cost between $65,000 (for a refurbished machine) and $2.5 million (for a new, top-of-the-line model); MRI machines are slightly more expensive and can cost up to $3 million.

Conundrum for Rural Hospitals
While these initial costs are lofty, hospitals can foreseeably budget for them. It's the cost of servicing the equipment that can vary unexpectedly, depending on the specific equipment and its location; older systems are typically cheaper to service, but systems in remote areas are more expensive to service. The yearly service cost per system runs from $50,000 to $125,000.

Generating revenue to match the costs of imaging equipment can put significant pressure on hospitals. Oftentimes, the associated cost of imaging services presented to the patient is beyond his or her own budget, causing some providers to go without these imaging services, potentially compromising patient outcomes. A recent trend in rural areas reveals a growing number of hospitals doing away with imaging entirely, due to low demand for the pricey equipment. Such limitations, however, are unnecessary.

A managed service frees hospitals of the limitations of purchasing, servicing, and updating their own equipment. Leasing provides a hospital with quality imaging equipment at a reduced cost in comparison with purchasing. Some managed service providers will even staff the equipment with trained professionals experienced in operating such machines, embedding them seamlessly within the hospital's setting. Servicing and updates are on the managed service's calendar, not the hospital's. The managed service oversees the MRI and CT life cycles to ensure quality imaging for as long as possible.

Rural hospitals, as we know from many of our clients, find value in managed services and equipment leasing because it opens the opportunity for them to provide quality imaging diagnostics to their patients. As service-minded members of the community, rural hospitals understand the needs of their families and neighbors and strive to meet those needs every day. We believe that the highest degree of medical services should remain accessible to all, and we are proud to partner with hospitals to make optimal patient outcomes a reality.

— Jack Allen is the vice president of marketing at Numed, Inc, a provider of MRI and health imaging services.