As anyone who practices in the U.S. imaging center business knows, the landscape for diagnostic imaging services has grown ever more competitive in the past few years. According to Patricia Riskind, president of Elkhorn, NE-based market research and consulting firm HealthIntell, the volume of imaging services is growing at three times the rate of overall physician services.
"Imaging services increased by 44% between 1999 and 2001, and went from $5.7 billion to $9.3 billion between 1999 and 2003," said Riskind, who presented at the October American Healthcare Radiology Administrator (AHRA) Imaging Center Administrator's conference in Phoenix.
The aging of the U.S. population has had a dramatic effect on the anticipated demand for imaging, she noted, as those who are age 65 and older utilize imaging services approximately twice as much as those who are 45 to 64, and three times as much as those who are 20 to 44.
Riskind said that this element, as well as other factors such as expanded Medicare coverage and the practice of defensive medicine by referring physicians, has resulted in the dramatic growth -- by approximately 63% in the past five years -- in the number of U.S. imaging centers. This has in turn resulted in hospitals and entrepreneurs getting into the imaging center market, and radiologists becoming more aggressive in their pursuit of this business.
"Many radiology groups with adequate critical mass, 10 or more physicians, have either recently launched an imaging center or are evaluating the potential for a center," she said.
Riskind noted that there are many stories in the marketplace about physicians striking it rich in imaging. However, she said, many groups are still struggling to fill their machine capacity, which she estimated annually as 6,750 scans for a CT, 4,500 for an MRI, and 2,700 for a PET system.
No matter how an imaging center is established, via an entrepreneurial investment by nonradiologists, a hospital-radiologist joint venture, or a radiology practice striking out on its own, the key to success of any imaging center venture is referral physicians, Riskind said.
For a facility to capture referral physician business, it requires more than a "if you build it, they will come" mentality. An imaging center practice must foster relationships with its referrers, market effectively, bring value to the relationships, differentiate itself from competitors, engender loyalty with its referral base, and make it easy for the referrers to conduct business with the facility.
Parkside MRI, a 34-partner, freestanding imaging facility established in 1987 on the campus of Lutheran General Hospital in Park Ridge, IL, found that the growth of competitive pressures brought by 18 imaging centers in its service area meant that it could no longer solely rest on its long-established reputation for service with its referrers, according to Kevin Miller, executive director for the practice, who presented with Riskind.
The facility was not sure why its referring physician base was using its services, so it commissioned a study once it perceived that its growth was not keeping pace with national averages, Miller said.
The group surveyed 333 of its referring physicians and received a 13% response rate via phone and fax. It found that 83% of its respondents did not own imaging equipment, 70% belonged to group practices, most of them (60%) ordered five to 10 MRI scans on a weekly basis, and more than half of them sent 75% or more of their patients to the practice.
They also discovered that 91% of the physicians decide where they are going to refer. However, nine out of 10 of the primary care physicians offered only one or two options to their patients, while specialists were much more likely to offer three or more choices, Miller said.
The respondents, when queried as to the most important factor in their selection of the practice, overwhelmingly chose quality (approximately 90%) as an important factor in recommending the center. Parkside also found that, among the most satisfied respondents (satisfaction scores of 9 or 10 on a scale of 1-10), the accuracy of the radiologist's interpretation was scored the best, followed by written then verbal skills of the radiologist, according to Miller.
"Referring physician relationship with the radiologists in the imaging center is crucial in building their loyalty," he said. "The quality of the interpretations is what keeps their loyalty."
The practice found that its report turnaround time scored the lowest in satisfaction by the survey respondents. In fact, noted Miller, this was the only question that averaged below a 6 (5.26) among the less-satisfied respondents. Over three-quarters of all respondents felt that the final interpretation should be delivered within 24 hours.
"If you don't improve your turnaround time (with a standard that is less than 24 hours), you're not going to get any new business and you'll start losing existing business," Miller said.
On the basis of the results of its survey, Parkside initiated processes to improve its report turnaround time, improve its scheduling process, actively promote its strengths to both referring physicians and directly to consumers, and add a marketing/relationship building incentive to its radiologist bonus plan.
The new incentive component rewards the practice's radiologists with a greater percentage of net revenues, plus a cash bonus, on the basis of their outreach efforts to their clinical colleagues as measured on a monthly and annual basis. This can result in a radiologist capturing up to 22% of net revenues as well as a $50,000 bonus, Miller said.
"People do business with people that they know and like," he noted.
According to Riskind, a practice does not have to be the first to market to be successful, as establishing referral physician relationships can change the market dynamic.
"If you're established, protect your physician base and never stop trying to grow," she advised. "If you're new, create relationships quickly and deliver on what you promise."
By Jonathan S. Batchelor
AuntMinnie.com staff writer
November 25, 2005
Related Reading
Successful customer service requires scrutiny, October 17, 2005
Service blueprinting maps path to excellence, August 26, 2005
Strong customer relationships: Building a competitive advantage, June 6, 2005
Web-based workflow and reporting systems keep imaging on track, March 10, 2005
Impactful marketing in healthcare, May 14, 2004
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