Tom told me that for the last three months he has talking with radiology administrators, asking them what are their stay awake issues. Tom said there are 10,000 issues and it’s a different issue every night. According to Tom, “It’s chaos out there.”

Here are the top three general issues with radiology administrators right now.

#1 – Time Crunch
There is a general perception that technology contributes to, if not in fact causes, the time crunch. We’ve probably all experienced something like this. We got cell phones so that we could work while on the go, but it just made work a constant. We get texts and emails while eating dinner.

Tom observed that there is a search for “Quality Time” at work now, not just with the family anymore. We have to find a way to peel away the extraneous, time-consuming issues like insignificant employee problems so we can focus on the things that really make a difference.

#2 – Eroding Bottom Line
In today’s environment, income isn’t producing the outcome wanted for the time, energy, and effort invested. We’ve got to find a way to increase Patient Collections. He observed that most administrators think on a cash basis unless they are considering large investment like building or primary imaging equipment. One thing that particularly annoys them is known and unknown “add-on” costs.

#3 – People
Administrators spend a lot of time dealing with whining whether it is with radiologists or staff. They spend a lot of time dealing with “problem creators.” Radiology administrators spend a lot of time and energy in change management. The big question is “how do I get them to stop doing X and start doing Y?”

For those of you unfamiliar with the RBMA’s Accounts Receivable survey, it is a compilation of surveys of financial data of radiology groups in the US. It is an extremely valuable for benchmarking your own practice with that of other groups.

Most of us track our own metrics from month to month, but those metrics take on a whole new meaning when we get to compare them to our peers and see the trending in the market as a whole.

The survey is copyrighted and rightly so. It has a great value. So I’d like to make a few observations without infringing on the RBMA’s copyright. I’d encourage you to acquire one of the surveys from the RBMA if you don’t have one already.

As you would expect, Adjusted Collection Percentage is trending downward. This metric tells us the percentage of the money that we are collecting versus what is possible to collect. This makes sense. We have a rising percentage of patient responsibility for payment. We have rising deductibles (converting many “insured” patients into de facto self pay patients). We have rising immigration and unemployment. From this, we intuitively understand that it is going to be harder to collect on that money even though it is money that is possible to collect.

The best thing about the new RMBA Accounts Receivable is the addition of patient mix. This key metric was omitted in previous surveys; therefore we don’t have any way to measure the change in patient mix. However, this should be very interesting to watch in the next few years.

Days in AR is trending downward meaning that people are collecting their money faster than in past years. I wouldn’t put too much stock in this although I would tell you this metric is the darling of some billing entities. I’m not a big fan of this metric except internal to your organization as it is simply too easy to be manipulated. I’ve seen operations where Days in AR looks fabulous, except when you dig under the numbers the billing entity is just writing things off at some arbitrary age. I am of the school that things should be written off after they have been properly and thoroughly worked regardless of the age. If we are taking too long to work it, fix it. Don’t play to the metric; use the metric to improve your business practices. Sloppiness in this area can be discovered with unusually high Total Write-offs as a Percentage of Gross Charges, below average Adjusted Collection Percentage and a high Bad Debt Recovery as a Percentage of Collection Agency Write-offs. I would add, though, that this number could be falling because of the advances in billing technology by such companies as IMAGINEradiology and computer-assisted coding.

Billing/Collection Expense Percentage is the amount that it costs you to run your billing operation. The Billing/Collection Expense Percentage is rising for some and falling for others so that a trend is not readily discernable. The RBMA breaks it out for in-house and outsourcing. Of the two, I would tend to trust the outsourcing figure better. Outsourcing tends to be a fee which is easily accounted for while in-house billing can have a lot of variables in shared costs. For example, you might have an administrator who handles more than just billing. How does their cost get allocated?

The RBMA AR Report doesn’t report the most vital financial number of all for radiology groups and that is money in the bank. Most radiologists aren’t that familiar with how efficiently their money is being collected, but most know if they are making more or less money. In this day of declining reimbursements and worsening patient mixes, the day may be coming soon when things like Adjusted Collection Percentage and the RBMA AR Survey will hit the radar of the average radiologist. They will want to know just how efficiently and how effectively their billing company or in-house staff is. Until then, it will be up to geeks like me to getting excited about these things.

If you want to know more about what these exciting terms mean to you and your practice, I would suggest my white paper entitled What Every Radiologist Should Know about Medical Billing. It will tell you how to make sense of your RBMA Accounts Receivable report. It is available for free at www.dexioscorp.com.

When it comes to business, people do some crazy things too. For example, I have an account with a water company to provide our offices with drinking water. This week I received a notice from them that my credit card transaction didn’t go through. They wanted me to fill out a new form and pay them a $15 service fee. I checked with the credit card company and figured out what was wrong and called the water company to inform them that the card would go through fine now. They processed the amount and it went through without a problem. Since the problem was not my fault, I asked them to remove the $15 fee. They refused.

Here is the point that I want to make. When faced with their refusal to reverse the $15 fee, I asked them to close my account. The young lady on the other end of the phone said the most amazing thing. She said incredulously “you are going to close your account over $15?” I almost laughed in her face. What a stupid comment! Yes, I am willing to lose a vendor over $15, but they are willing to give up a faithful customer who has used them for years over $15.

I bring this up because the water business and the radiology business are not that different. Do we lose patients and clients because of annoying little business practices? Are we running our businesses with inefficiencies built into the system that aggravate people? In this day and age with declining reimbursements and strong competition, can we afford to run our businesses with such foolish shortsightedness as the customer service rep for the water company? I would suggest we can’t. If we do, before too long, someone is going to come in a shut us down. It’s inevitable.

The lesson? Look at all of your business processes today and see if there are built in inefficiencies or annoyances. Try and look at things the way your customers and patients will see them. If you want, Dexios will be glad to look at your billing process. There’s a 50% chance that yours is below average (sorry, but that’s just the way statistics work). If there isn’t a problem, great! If there is a problem, at least you will know and will have the option to fix it.

#1 – Radiologists are not measuring performance.

I was talking to a solo practitioner radiologist the other day and ask him what his adjusted collection percentage was. His reply was “9%.” He was obviously referring to the fee he was paying his billing company. When I explained in more detailed what I was asking him, he said he didn’t know that answer. Not good.

This is not uncommon. I talk to radiologists every day who have no idea if their billing staff is performing well or not whether they are in-house or outsourced. There is a Russian proverb I love to quote that says “There is no shame in not knowing; the shame lies in not finding out.”

I told one radiologist recently (the “9%” doc) that you can’t qualitatively evaluate something you aren’t qualitatively measuring and monitoring. If you want to understand the basics on how to evaluate your practice, you can download my white paper “What Every Radiologist Should Know About Medical Billing.” See http://www.dexioscorp.com/radiology_billing_contact.html#RadiologyBilling

#2 – Radiologists are measuring something irrelevant (or don’t understand what they are measuring).

I meet radiologists all the time who focus on one or two metrics that either they don’t understand or are misleading them. They think that they are on top of things, but the ship is sinking. For example, I know some docs who think that Days in AR is a key, standalone metric. In my humble but highly accurate opinion, Days in AR is virtually worthless outside the context of Adjusted Collection Percentage, Bad Debt Recovery as a Percentage of Collection Agency Write-Offs and AR Aging Percentage Over 120 Days to name a few. You want to have a great Days in AR number, just write everything off and send it to collections after 25 days. You will collect a lot less money doing things that way, but boy your Days in AR will look super.

I think Net (or Adjusted) Collection Percentage is a “must know” and the most obvious one is money in the bank. The rest are helpful but can be misleading – especially if you don’t understand what they are telling you.

A great way to learn about these metrics as well as compare you to the rest of the world is the RBMA’s annual Accounts Receivable Report. In fact, you don’t even have to purchase it just to get the definitions. They can be found at http://www.rbma.org/Data_and_Surveys/Reference_Materials/Accounts_Receivable_Definitions_and_Formulas.aspx. The AR Report won’t tell you everything you need to know. A lot is predicated on your patient mix. However, it will explain the metrics and give you some data by which to compare yourself and see if you are above, below or at the median. You will at least have an inkling whether you need to dig deeper or not.

#3 – Radiologists get end of month reports that aren’t worth the paper they are written on.

The average billing company provides pathetic reporting. I get sent these reports by radiologists who want me to evaluate their practice. These reports are so bad that I have a difficult time figuring out what is going on…and this is what I do every day.

I know one billing company that regularly provides over 100 pages per month in reporting. Who has the time or the energy to wade through all that stuff? In fact, let me suggest that this may be one of the strategies of the billing companies—bury them in BS. The RBMA came out with a 13 month standard report a while back with all the key metrics. This one piece of paper tells you all you need to know including key ratios. As long as you know what these key ratios and line items actually mean, you have a beautiful snapshot right there.

If you don’t know how to make heads or tails out of your end of month reporting, tell your billing company what you would like to see. If you don’t know what you need, give me a call. I’ll send you a sample of the RBMA report and even walk you through what the different things mean on the report and why they are important.

#4 – Radiologists focus too much on the billing fee.

Now, as the owner of a billing company, of course I don’t want groups to focus on the fee. But seriously, the fee is equal to one percentage point of net collections. If you go with a billing company that drops your fee by one point but loses you five points in net collections you are out a lot of money.

Case in point, one of my clients pays me one point more in fee than they paid their last billing company. However, we were able to raise their net collections six points, so they netted five points to the positive. Pretty shrewd business arrangement, I’d say. For the record, if there is anyone out there who I can give $1 to and they give me back $6, I am OK with that arrangement all day and all night.

The key is finding out who can bring home the bacon. How do you do that? References are a good start. Ask references what their net collection percentage was before the current billing company took over and what it is after. Another thing is ask them to guarantee their improved collections. My company guarantees we will improve collections in the first year or we will pay $10,000. At least you know we are serious and not just blowing smoke.

The ASP may become even more relevant in time as small radiology groups struggle to stay competitive. It will be harder and harder over time to afford and maintain the best-of-breed applications. This is one way in which the small radiology groups can afford world-class applications.

The classic ASP offering in billing would be for a company to host the billing application on their server and for the billing staff of the radiology group to access that software via a high speed communications line. This approach answers many of the concerns typically associated with the classic in-house versus outsourcing question.

Control
One of the main reasons that radiology groups don’t outsource is the issue of control. They often want their employees doing the work under the direction of their manager. In the classic ASP model, all of the key billing functions (e.g. coding, charge entry, follow-up) are done by the employees of the radiologists. The functions that are off-loaded to the ASP provider are all system functions such as back-ups and troubleshooting.

Information Technology
One reason that radiologists begin looking at outsourcing is the cost of purchasing, maintaining and updating billing software and the hardware to run it on. This cost, when shouldered solely by one group, can be significant. It can also be hard to keep it current. Another significant cost factor is IT support. A small or even a medium-sized radiology group probably won’t need a full-time IT person on staff, but they do need that service at least on a part-time basis. They will have to pay a premium for this service to maintain some level of consistency and professionalism.

With an ASP, this cost is shared among many groups. They can afford to have the technical staff on-site and therefore tend to be up-to-date on technology.

Costs
The ASP company needs to make a profit so that has to be factored in. However, since the costs are being shared, an ASP should be less expensive to use than owning your own hardware and software. The rule of thumb is that the larger the radiology group the less sense an ASP makes. The rule isn’t always ironclad. One of the larger billing companies in the US, Medical Business Service out of Coral Gables, was until recently running all of their operations off of the system of an ASP provider, CPU MMS from San Diego. CPU MMS has been one of the few billing systems until recently that has had an ASP offering that fits the unique needs of radiology. There still aren’t that many radiology-specific ASP offerings in the marketplace but generic ASP giants like athenahealth have made inroads into radiology nevertheless. As Kroken points out in her article, the needs of radiology billing are unique. IMAGINEradiology’s foray into the ASP market through Dexios should render the generic ASP billing offering obsolete to the savvy shopper.

Hybrid Approach
Some ASP companies offer a hybrid approach. My own company, Dexios, offers IMAGINEradiology in an ASP offering but we also offer full-service radiology billing and everything in between. For example, if a client runs their own imaging center and wants to do scheduling via our ASP on Imagine’s RIS product but for us to do the billing, we can do that. If someone wants to have a local employee answer the phone and access the billing system but for us to do the follow-up, we can do that. The flexibility in an ASP offering can make the perfect solution for a group with unique needs. One of my favorite sayings is “if all you have is a hammer, everything looks like a nail.” The hybrid ASP approach gives the radiology practice a wide array of tools and options so that a custom solution can be created to meet the need of the practice, not the vendor.

The Future of ASP
As I take out my crystal ball, I think that ASP billing solutions will continue to grow in years to come. Either the small radiology groups are going to have to adapt some new practices in order to compete or, as some predict, they will simply go away. It used to be that the high cost of communications and the vagaries of telecom were barriers to trying a solution like this. However, in this day and age of cheap high speed communications and high uptimes, anyone can plug into a datacenter anywhere in the US and expect to get access to highly specialized software for a fraction of what it would cost to run your own shop. Time will tell.

In response to this need, Dr. Gill created Radiologists without Borders, a non-profit organization with a two-fold goal:

• Develop connectivity with health organizations seeking assistance to provide expertise in the field of Medical Imaging.
• Provide educational material and training to personnel engaged in the field of Medical Imaging.
He started his work a couple of years ago in Chile but soon found out that the Chilean government wasn’t too keen on the help.

The organization now has several projects in the work in places like Tanzania where, working with another non-profit Humanity First, they are bringing medical personnel to Binghamton, New York to Our Lady of Lourdes Hospital to train them in conjunction with the faculty of two local community colleges. Local families will host the participants. They are also getting a single slice CT down to Honduras in July. They also have engaged in a project in Haiti.

they move forward, they have a lot of issues that they need to work out. How do you effectively train people in remote areas? Videos delivered via YouTube? Skype? How do you deliver technology to areas that desperately need it but the bandwidth does not exist to get the images to the reading radiologist? Where do you archive these images?

The need for these services far outstrips the ability at present to deliver a solution. However, it reminds me of the story I heard about the starfish on the beach. A terrible storm had washed thousands of starfish onto the beach where they lay dying. A man was walking down the beach picking up starfish and tossing them back into the water. An observer approached the man and said “Why are throwing the starfish back? There are thousands of them. You can’t possibly make a difference!” The man replied as he tossed another starfish back into the ocean, “It made a difference to him.”

If you want more information about Radiologists without Borders, please visit their website at http://radiologistswithoutborders.com.

This interview was coupled closely by two other significant events. One was the creation of Strategic Radiology – a consortium of large radiology groups around the country who have formed a purchasing/best practices group. These already large groups felt the need to bind themselves together to form a mega-group of sorts.

The other major announcement was the Radisphere – a “national radiology group” from Franklin & Seidelmann Subspecialty Radiology. The CEO says they are NOT a telerad company. But, as the saying goes, if it walks like a duck and quacks like a duck… Without pretext, they have announced they are going after contracts directly with hospitals. AuntMinnie.com wrote “Industry watchers are wondering if Radisphere’s launch is the death knell of the radiologist-as-entrepreneur model, to be replaced by a paradigm in which radiologists are salaried employees of large companies.”

So all of this begs the question, “what is to become of the small, local radiology group?” Is this going the way of the corset and steam engine?

Oldtimers are going to say “we’ve heard this all before.”

I, for one, think this is different. There are just too many forces arrayed.

It seems to me that something needs to be done. I’d like to hear from rad groups with 10 radiologists or less on what you think needs to happen. I would also like to suggest that at some point in the near future we need to have some key thought leaders conference on how to survive. I’ve got some ideas so stay tuned.

SACR’s Public Relation’s Director Nancy Jane Fou said, “We are thrilled to be at the leading edge of corporate partnerships. Corporations have been branding things such as stadiums for years. We are simply taking the next logical step.”

The SACR’s publications are reportedly not in included in the deal. Rumors suggest that organizations’ publications may become The AuntMinnie.com Journal of the American College of Radiology (JACR) and The ACR Bulletin.

Although this has been in the works for quite a while, Strategic Radiology was announced to the world in February 2010.

Per their web site, this is their story.

Strategic Radiology, representing over 750 radiologists, is comprised of large, clinically-advanced groups that are geographically dispersed. These groups are uniquely suited to a collaborative model in which data and best practices are shared, clinical practice information is interchanged, and certain practice expenses are consolidated. SR’s goal is higher quality and more cost-efficient delivery of medical imaging.

The thirteen groups are as follows:

• Advanced Diagnostic Imaging (Nashville, TN)
• Advanced Radiology Services (Grand Rapids, MI)
• Austin Radiological Association (Austin, TX)
• Charlotte Radiology (Charlotte, NC)
• Diversified Radiology (Denver, CO)
• Inland Imaging (Spokane, WA)
• Jefferson Radiology (Hartford, CT)
• Mountain Medical Physician Specialists (Salt Lake City, UT)
• Northwest Radiology (Indianapolis, IN)
• Quantum Radiology (Atlanta, GA)
• Radiology Ltd. (Tucson, AZ)
• Riverside Radiology and Interventional Associates (Columbus, OH)
• Southwest Diagnostic Imaging, Scottsdale Medical Imaging Limited/Valley Radiologists Limited (Phoenix, AZ)

This massive conglomeration of rad groups represent almost 12 million annual procedures and 124 hospitals. The sheer size of this radiology bloc means that it could change the face of radiology. Imagine if, for example, all 13 groups decided to join SR Vice Chairman Chad Calendine’s practice management company, Phydata. Think of what would happen if SR put together one large teleradiology company (this is much more likely than the first). Any significant movement in this bloc would be a seismic shift in the radiology business.

The greatest strength and greatest weakness of SR is its size. Talk to any administrator of a large rad group and they can tell you of the challenges of getting a large group of highly intelligent and opinionated individuals to move with cohesiveness and purpose. Sure, it can be done. Yet, the sheer number of articles and seminars on governance and related issues let you know that it is akin to herding cats. Now, multiply that by 13!

When you think of this on a practical level, what exactly is going to change? Let’s look at the purchasing side of things. Suppose a RIS/PACs vendor enters into a vendor agreement with SR. How many of the 13 are going to be willing to scrap what they already have in place to move to the new vendor? How much bang for the buck will the vendor achieve? How much lower is the vendor willing to go sell their products and services than if one of these already large groups entered into their own negotiations? It seems to me the promise of 13 large rad groups buying in unison is much greater than the reality. Keep in mind that GPOs (Group Purchasing Organization) have been around for a while and haven’t changed the face of radiology.

Where I do think that SR can make some headway is in the area of their stated mission. SR’s mission is “setting the standard in radiology excellence by providing quality patient care utilizing collaborative best practices.” If each of these groups opens the proverbial kimono with one another, they can certainly benefit. Relationships beyond the boardroom need to be built. Venues need to be established for the sharing of this information. This is very doable, however. It will take leadership from the top to make this happen and it looks like they have it.

The Radiology Business Journal is getting ready to do a piece on SR so keep your eye peeled for that. It should shed more light on what we can expect from the new super group.

In the spirit of full disclosure, my company, Dexios, in addition to Imagine’s technology for our billing service and offering Imagine as an ASP, are in the process of becoming an authorized reseller.

IMAGINE is working on an improved version of its Charge Audit capabilities that will become a new module in 2010.

IMAGINE recently released its MTD/YTD Trending Dashboard that allows you to compare different years by several views, with user-defined metrics and groupings options. You can compare trends by modality, for example. You can compare trends among payers when it comes time to negotiate a new contract. All of this is exportable into Excel.

A really interesting application that they also released is a Cash Flow Prediction Dashboard. This will be a favorite among accountants, CFOs and practice administrators. It will build a performance model based on actual time and payments that occurred over a client defined time period that is then used to make accurate cash predictions of current charges in the system for the selected future period of time. Think about how valuable this will be if you are trying, for example, to give the group a year-end bonus but want to have enough cash on hand for monthly expenses in the first quarter.

There is also a Procedure Reimbursement Dashboard coming that will allow the client to select one or more procedures for financial analysis and comparison. Like the other dashboards, there are multiple options for viewing the data, time frames with prior year comparisons, and drill-down capabilities. The data can be exported in Excel, if desired.

IMAGINE will also be releasing a new Human Capital Management application that will graph key HR metrics. You will be able to compare the effectiveness of various billing positions. You be able to compare cost by position and add in denial volume and productivity measures. This will come in very handy in appraisals. It also might incent people to work more effectively as the old adage goes “people don’t necessarily do that they are expected to do, but what they are inspected to do.”

Also, expect to see some telephony interfacing features in 2010 (for qualifying phone PBX systems) that will allow a user to click on any phone number in IMAGINE to make a phone call. My company’s phone system already supports this type of thing. They also will offer an intelligent answering application that work in conjunction with the telephony system to recognize inbound patient calls and provides the option to display the patient’s account, without having to stop the application you were working on.

What I took away from the demo was that the best just keep on getting better. The leaders in the high end billing systems are making considerable distance between themselves and the second tier.