Teleradiology’s Role: Radiology Today Interview — Joe Moock, managing partner of StatRad
Vol. 11 No. 12 P. 22
Joe Moock, managing partner of San Diego-based teleradiology provider StatRad, recently discussed the current state of that business with Radiology Today.
Radiology Today (RT): The teleradiology business is changing just like any other business as it evolves. How do you see StatRad’s place in this field and how has it changed since the company began?
Moock: Our place in this field has not changed. We have stood by radiology groups and private practices and felt that healthcare should be left in the hands of physicians. However, we definitely see the marketplace making a change with the emergence of larger corporate entities, especially with the acquisition of NightHawk by Virtual Radiologic Corp [VRC]. We also see some other teleradiology companies going out and trying to obtain full hospital contracts.
But from StatRad’s perspective, we’re sticking to what we originally set out to do and that is to support radiology groups and provide after-hours services as well as daytime services on an as-needed basis for locums, subspecialty, or partial FTE [full-time equivalent] coverage.
RT: So you see your place as responding to the needs of radiology groups to help them deliver their services?
Moock: Yes, but primarily after hours. We also believe that in the future, teleradiology will move toward a more regionalized approach rather than large national reading groups. We are working with groups in different parts of the country to set up regional teleradiology programs with smaller, regional groups of radiologists.
RT: Many believe radiology practice is shifting toward a hybrid radiology group model where the group will provide some on-site radiology while filling in with some teleradiology to leverage their services as a practice. This seems to be driven by how the radiology group chooses to practice rather than the state of the teleradiology industry. If your company is the client serving a radiology group, do you draw lines regarding what you will do for them?
Moock: We don’t draw lines as to what we will do for the group. We actually offer them the same tool set that we use so they can take advantage of the benefits of teleradiology, whether they want to provide teleradiology coverage internally or utilize subspecialists that we have. We definitely help them out in those areas.
I think that in the future, groups will be comprised of radiologists on the ground as well as a group of teleradiologists reading remotely—either covering a general worklist or a more subspecialized worklist. But we do think that, in the end, it will either be on a hospital system basis or a radiology group basis, not through large telerad companies.
RT: Is it a matter of radiology groups or the hospitals just figuring out how they’re going to deliver radiology services going forward?
Moock: I believe so. It’s obviously changing with the advances in technology. I think that the stronger, forward-thinking groups will move forward as technology continues to evolve and embrace it to keep their place in the market.
RT: Do you think that teleradiology and radiology practices are increasing in size to compete for more contracts or compete over a larger area? Or is this a more localized phenomenon and radiology practice isn’t changing on a widespread basis?
Moock: I think larger group size is a reaction to teleradiology threats. We work with a number of groups in central California that are forming a consortium so that they can leverage each practice’s strengths to compete against larger companies that may have more infrastructure in place. Large radiology groups may be looking to acquire additional contracts, although we haven’t seen a lot of that lately. We’ve actually seen some groups split off different contracts and end up with two separate groups.
RT: Is it fair to say that the makeup of the radiology group of the future is still up in the air, with everyone looking for their proper mix of boots-on-the-ground services and telerad coverage based on a group’s after-hours or specialty coverage needs and capabilities?
Moock: I think, yes, that it’s still very much in the experimental phase. Although I think you haven’t seen a lot of the groups yet join in on that experimentation where they keep a certain number of boots on the ground and have the rest read remotely through other services or other group members.
The teleradiology companies that are trying to get into the full hospital contract market are obviously experimenting. Many of them are having difficulty with that. When you place a locum or somebody is not invested on site, that person’s desire to partake in conferences and customer service relationship building isn’t as great as if you are a group that is involved and forms a relationship with the medical staff.
RT: What are radiologists primarily looking for from StatRad and has what they are looking for changed?
Moock: In a lot of cases, more people are asking about final reads, although we don’t see many of them actually switching over to finals. What we’re seeing is a lot of groups shying away from large entities to avoid potentially inviting competitors into their facility.
We’re seeing a lot more groups focusing more on quality and service as their relationship with the hospital and their hospital contract become more important given the increased competition. Groups want to make sure that the teleradiology company they work with after hours is providing the same level of care that the group provides during the day.
Some companies are trying to create one gigantic business where it’s just a commodity, where a read is just a read. In actuality, it matters who’s looking at the film and how they provide service to the ER doctors—whether by making personal calls, getting to know the doctors, and how they respond to certain calls. It requires a human element for sure, and I think that’s what’s keeping us in the game.
RT: Does the existence of teleradiology raise the bar when it comes to the level of service radiologists must provide?
Moock: Definitely it is raising the bar. There’s more access to a set of specialists. Radiologists should look to partner with groups that can help them in areas where they may not have some expertise.
RT: On a different note, what do you think are the possible implications of mergers such as VRC’s acquisition of NightHawk?
Moock: I think the biggest question that everyone—specifically Nighthawk and VRC customers—must ask is where are they going to grow? The after-hours teleradiology market is saturated. I don’t think they’re going to get much organic growth through picking up additional preliminary-read contracts or even after-hours final reads.
VRC has a software offering that provides imaging tools for clients, but I don’t think they’re going to see enough growth in that area. So the question remains, where will they grow and how will they do so without competing with their existing client base? I think that’s what people need to focus on and think about as they proceed with their teleradiology contracts.
The easiest target is the entire hospital contract. While some of these companies have been trying to expand their daytime market, NightHawk didn’t have good success at all during the past three to five years in terms of just going out there and getting contracts with small imaging centers, mobile ultrasound, and mobile x-rays. It just doesn’t add up to much at the end of the day. They see the big money is in the entire hospital contract because that’s where the volume is, along with higher-end services like CT and MRI. For them, it’s by far more lucrative to pick up a full hospital contract.
When more than 90% of your revenue is coming from your after-hours clients, the minute you step into that competitive arena with them, you’re taking contracts from potential clients or existing clients.
I think it’s important for radiologists today to take a look at where they’re heading with this extremely large national teleradiology company and then to ask the question how will this company service their existing client base and compete with them at the same time. I think that how this plays out in the coming months and years will have a dramatic impact on the practice of radiology.
RT: We’ve certainly seen some backlash on that from radiologists.
Moock: People are very vocal on what happened in Ohio and with RadiSphere. RadiSphere was the first company to come out and say, “This is who we are. We are a national teleradiology practice.” Their marketing appears geared toward hospital administrators, with the aim of taking over their contracts. From what we’ve heard, it isn’t going so well. That might give us a hint as to what to expect as any larger companies go in to take over full contracts.
RT: Speaking of hospital administrators, they seem to be gaining strength in the balance of power involved with delivering radiology services. Do you think that in some cases hospital administrators are using teleradiology as leverage in negotiations for radiology services?
Moock: That could prove to be a perceived strength rather than actual strength, but it is true to a point. We have had hospitals come to us, when renegotiating with our client the radiology group, and ask us to provide a bid, using us as a negotiating tool in the eleventh hour. We, of course, declined because we believe the hospitals are better off with an on-site group or at least an on-site presence vs. pure teleradiology.
I think larger hospital systems may start consolidating into single groups or internal radiology groups. But, as of today, I am not personally aware of successful takeovers of full hospital contracts by teleradiology companies. That’s why I say that that it may be perceived strength, not actual strength, that hospitals have better options.
RT: What kind of organization is looking to StatRad for teleradiology services?
Moock: That all depends on who holds the after-hours or the teleradiology contract. In some cases, the hospital owns it. A recent study published by KLAS reported that an increasing trend is for hospitals to actually be responsible for their teleradiology contract. In those cases, we will contract with the hospital or with the radiology group as well. We also work with radiology groups that hold the contract.
When I said that we see the future as more regionalized teleradiology programs, I mean that StatRad is looking at setting up regional programs instead of one centralized radiology center where we’ve got 50 to 80 radiologists on staff at a particular hospital. StatRad is providing services in various parts of the country, but we’ve found that having local radiologists or regional radiologists in smaller groups allows that relationship to grow among the teleradiologist, the on-site local radiologist, and the emergency department physicians.
RT: In an ideal situation, a hospital is happy with its radiology group and the radiology group is happy working with a teleradiology business. What can get in the way of this happy relationship?
Moock: A lot of times there are issues, whether they are political, financial, or something, between the radiology group and hospital that are unknown to us. They need to be worked out, but we’re not involved with those issues.
As you mentioned earlier, radiology groups are more willing to work with the hospitals today. I think that they are more flexible today than they were in the past and more focused on providing great service at their facility. I don’t mean they were providing poor service in the past, but many have become more focused on going above and beyond to ensure that everyone is happy.
RT: Almost everyone agrees that a real, local, on-the-ground presence offers the best chance for the best radiology service. In the course of running your company, what have you seen that may be useful for anyone involved—radiologists, facilities, or hospitals—to achieve that service?
Moock: I think the relationship between the on-the-ground radiologist and the hospital or facility needs to be strong. They need to sit down and identify what their core strengths are and what they could gain by perhaps partnering with another company. StatRad has spent years developing teleradiology systems and recruiting fantastic radiologists to be able to offer strength in areas that smaller groups might not be able to offer. Once that relationship between the group and the hospital is established and strong, partnering with the right teleradiology company is key to rounding out the full range of services to achieve such success.
RT: In addition to regional radiology services, what else do you see coming in teleradiology that may affect how practice happens?
Moock: You’re asking me to predict the future?
RT: Pretty much. Sometimes it’s easy to say what you see happening next. Other times, maybe there’s nothing that obvious.
Moock: I think there are a couple of things that we’ll see down the line, purely because of a real need for it. One is the sharing of patient information or, in our case, images. I think that as patients go to different facilities and get scanned, it’s important for doctors to be able to share past studies. I think we’re going to see technology put into place so that whoever interprets a study via teleradiology will have a better set of data for creating a report. We’re actually working with a number of clients on beta testing that type of solution where they can consolidate studies from different facilities on demand.
I think another change that we will probably need to see—hopefully in the near future—is some sort of nationalized credentialing system specifically for teleradiology. Having radiologists fully credentialed at each hospital is extremely redundant and creates a heavy workload for the individual hospital staff offices. I think that some sort of standardization will probably occur in the coming years.
RT: Are you talking about nationwide accreditation?
Moock: In the past, if a teleradiology company was accredited by The Joint Commission you could simply have a credentialing contract in place that says we’re accredited by The Joint Commission, so our doctors can read for you. CMS [the Centers for Medicare & Medicaid Services] stepped in and said they didn’t believe that that was the right way to do it. CMS thought that the hospital should be doing more of the vetting of the radiologists because patient care was being directed by the teleradiology report, even if they were prelims. That change was two steps backward.
Today, hospitals can use teleradiology companies as CVOs [credential verification organizations] as long as the teleradiology company abides by the CVO requirements. So that’s one step forward, but there’s still a lot of work that’s being duplicated at every one of these hospitals. If radiologists are on a large number of medical staffs, the hospital credentialing offices have a hard time getting primary source verifications. I think some sort of national credentialing should happen, and I am hopeful it will happen in the near future. I think that centralizing the actual individual hospital credentialing would make a lot of sense.
RT: From your spot in the industry, what does StatRad think hospitals should keep their eye on to make this work? Similarly, what is the “big ball” the doctors should keep their eye on to make it work going forward?
Moock: I think hospitals would benefit from understanding that having radiologists interact with the rest of the medical staff, with the emergency department, with the nursing staff and the other hospital physicians and the referring physicians is extremely important. It provides for a comfort and interrelationship that will improve the services within the hospital significantly.
From the radiology group perspective, I would hope that they understand that there are companies like ours that can help them in many different ways. By identifying where their weaknesses might be and partnering with StatRad or other companies that could help them, they could better ensure their long-term success.