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Is There Growth Potential in Freestanding Imaging?

By Jim Knaub

Three times this year I’ve seen or heard radiologists or imaging administrators comment that they’re seeing an increase in freestanding outpatient imaging in their community. That doesn’t make for a trend after years of reimbursement patterns driving more imaging to hospitals, but it is an interesting observation.

I first heard this from a radiologist in a group that owns its own imaging centers. He told a conference audience that the centers were experiencing more calls from potential patients seeking exam prices, usually in an effort to control their out-of-pocket costs. He asked the audience if they were seeing the same uptick and received a mixed response.

The topic surfaced again at the AHRA annual meeting last month and garnered a similar response: some people said they were seeing it while others were not. That prompted me to start asking people if they’ve seen the change in freestanding imaging when I’d talk with them in the course of business. My questions generated the same mixed response.

The notion that patients with increasing deductibles and copays would shop on price seems logical, as does seeing an influx of patients with coverage driven by the Affordable Care Act.

A few weeks ago, one commenter in an online forum raised the issue of whether it might be time for radiologists to return to owning equipment. Again, the responses reflected the idea that people are coming down on both sides of the question.

The idea that more patients facing greater out-of-pocket costs suggests opportunity, but setting up a shop that competes against the local hospital could harm a practice in this time of consolidation. Radiology groups can be more easily replaced than in years past. Depending on the size and competitiveness of your individual market, expanding freestanding imaging could be a good strategy, but it could also put you at odds with the major hospital player in your market. A joint venture might be more palatable to a hospital and diversify a radiology group’s revenue stream. Also, the hospital your group serves might not mind you taking some market share from its competitor across town.

Another potential consideration is the increasing trend toward hospital ownership of groups. Even though other specialties may be more likely than radiologists to become employees, those referring doctors will be expected to steer patients toward hospital-affiliated imaging. So even if your group is independent and willing to compete with a hospital system, other physicians may not become referrers because of their hospital affiliation.

Another interesting piece in play is insurance companies that actively steer patients toward lower-cost imaging centers. In their battle with hospitals, insurers could become a radiology group’s allies.

More than likely, these differences vary from market to market, making how they play out a matter of whether there are dominant hospitals or insurers in the region—and how integrated they are overall in a given locality. It’s just another example of the adage that all health care is local, which means your organization needs to assess what’s going on in your market in search of opportunity.

And please let me know what you’re seeing in your market. Drop me a note at jknaub@gvpub.com.

— Jim Knaub