The top list priority in the Deficit Reduction Act (DRA) is reimbursement, and is one of the five challenges facing neurology and radiology. The others include revolution in customer expectations, change in the supply of and demand for radiology providers and services respectively and the tightening reimbursement. According to Lexa, the greatest threat in the future of mainstream diagnostic imaging is disruptive technology whereby cheaper solutions are able to interfere with the established market but which are not state-of-the-art. Radiology has been hit by descriptive technology in form of low scanners. The technology makes it possible for non radiologists to compete with the traditional imaging facilities. The adoption of the low-cost technology is said to have caused the loosing of business by the hospitals and the freestanding imaging centers, although the technology is less capable in solving the problem at hand. Although there has been reported that the imaging business has been growing rapidly, the technology has been termed as a threat to the business especially because it is deemed to be more effective by being coupled with reduced sitting and maintenance costs.
The decisions on Medicare reimbursements made by the Congress through adoption or leading to adoption of the Deficit Reduction Act have been termed as lacking input on consultations between them and the stakeholders, substituting for a system not validated for the purpose which it was adopted for, ignorant of their own jurisdictional committees (MEDPAC) and being capricious (Roger, 2006). The adoption therefore posed challenges in the technical and quality aspects of radiology practice. These include the reduction of the technical component approximately 309% on all outpatients imaging office. The changes do not allow the radiologists to self-refer patients, cost-shift or increase volume. The changes are likely to cause the laying off of employees, deferment of equipment purchases and upgrades and scaling back of services or the closing of good quality imaging center. Roger viewed that the domino would become regional and then would turn national.
Changes introduced in the practice on adopting Deficit Reduction Act (DRA) of 2005 include the reduction of technical reimbursement which according to Forman, would lead to reducing and capping of technical fees for most diagnostic imaging (2006). Mammography is the one that was excluded in this provision. The act also allowed reduction of technical fee for multipart imaging studies. Practices, especially the outpatient imaging, would be affected by the changes brought about by this act. Practitioners need learn the implications of the adoption of the act and reciprocate appropriately. Forman has proposed two main ways of managing the potential crisis arising from the changes of the amendments in the Deficit Reduction Act. These are preparation for cuts and looking for additional means of improving productivity. Further, he proposes that the federal representatives be encouraged to address this problem. In addition, beneficiary access to breast imaging and other important services need to be emphasized. Protection of mammography from the dangers of the Sustainable Growth Rate Legislation (SGR) updates or other revisions to the fee schedule is important. The physician fee schedule would reduce by 4.4% based on the sustainable growth rate in 2006 unless there were changes in the formulation on making the adjustments or change of the estimated impacts by the congress. The adoption would cause a financial strain in the industry leading to a deterioration of the quality of services. According to Butchwalter, Medicare and payers would be the ones to set the prices and hence leaving few options for imaging facilities to respond to these reimbursement caps and reductions (2006). The Deficit Reduction Act dismantled the Medicare Physician Fee Schedule (MPFS) that included physician and malpractice expenses. The reactions by stakeholders such as the American College of Radiology (ACR) to the changes in the Deficit Reduction Act have been critical, swift and vigorous. The aforementioned institution posits that the actual reduction will be $6 billion in five years as compared to the estimated $2.8 (by the Act) to the imaging services (Kate, 2006). According to Kate, the adoption of the new changes would hit worst the Medicare patients, but everyone would suffer if private payers adopted the new rates. The impact would spread over to the equipment manufacturers and the industry would also see an increase in the interest in refurbished products.
Being a market situation, imaging is controlled by forces of demand and supply, with estimates of growth in the demand being a double-digit through the year 2020. The rise in demand has been due to the following factors; litigation fears by physicians driving defensive medicine, expectations for greater expectation for diagnostic certainty by patients and referrers, and because of an aging population as the baby boomer generation begin turning the age of 65 in 2011. Much of the market was estimated to be captured by nonradiologists because of the competitive advantage brought about by cheap cost.
In addition to the rise in demand, there are estimates of shortage of radiologists through at least 2020, with the growth in demand being faster than the radiologist supply. According to Lexa, the estimate is not as high as 50% as estimated by others. The shortage reached at 18% in 2000 and made manufactures consider the option of setting up the call centers and using remote control software to replace technologists.
Lexa has put three propositions for solving radiologists’ shortage in the United States. These are computer-assisted detection, increased nonradiologist reading and offshore interpretation. Patients have also been grouped in as customers for the services other than “traditional” patients. The notion has been flinched into the patients by the healthcare professionals according to Knaub (2007). Heightened customer expectations can be exemplified by three things according to Lexa, namely, increased interest for alternative and complimentary medicine, greater control of consumers over medical decisions and rising of boutique or concierge medical care. According to Lexa (qtd. in Knaub, 2007), the customer definition not only includes the one who makes the decision to buy the commodities on offer, but also one who influences the decisions to buy the services or products on offer, the one with the ability to affect brand perception and one who can regulate the business in question. Improvements in the performance of imaging business can be made in view of these definitions. The solution that has been put forward for coping with the challenge of consumerization of the healthcare is the incorporation of customer service into the care provided by the traditional practitioners. The practitioners should embrace customer revolution and change their relations with their customers.
Consumer change in the imaging field according to Lexa is as a result of a number of factors, namely, the expansion of pay-for-performance measures, the growing availability of quality measures, change of traditional insurance, increase in direct-to-direct consumer products and increased self-directed healthcare. The customer expectations for healthcare services have increased with the entry of or impact of patient advocacy groups and this expectation influences their grading of imaging center. Other factors mentioned for increasing customer expectations are convenience and greater access to medical information through the internet. In order top cope in the highly competitive market and the impacts brought about by the effects of the Deficit Reduction Act, it is important that the imaging center focus on achieving this customer expectation. In addition, the government need adopt a policy that protects the traditional radiologists against the conventional practice and non radiologists. The impact of the increase of demand for alternative medicine and healthcare services in radiology and imaging services can be premeditated by considering the results of a study reported in a 2005 LDI Issue Brief that more people chose alternative providers instead of a physician, in the traditional healthcare system (Lexa, qtd. in Knaub, 2007). Complementary alternative providers are also a threat in this field. Lexa noted that people would grade practitioners based on the experience with the alternative providers.
In order to mitigate the operation of the adoption of the Deficit Reduction Act as from 2007, the American College of Radiology (ACR) mobilized for a solution. Together with the NCQDIS-National Coalition for Quality Diagnostic Imaging Services, the plan was to evaluate the bill and lobby Congress. A solution lies in trying to help the imaging center absorb some of the difficult cuts as a result of the introduction of the Deficit Reduction Act (Kate, 2006). Buchwalter also added the voice to the effects of the adoption of the act, viewing that the physician fee schedule would weaken the diagnostic imaging industry.
References
- Buchwalter Larry. (2006). Deficit Reduction Act sends diagnostic imaging down slippery slope.
- Forman Howard. (2006). Policy Brief: Radiology Reimbursement Faces Major Changes. American Journal of Roentgenology.
- Kate Madden. (2006). Deficit Reduction Act of 2005 puts radiology through the grinder.Web.
- Knaub Jim. (2007). Turning Crisis Into Opportunity — Challenges Facing Radiology in the 21st Century. Radiology Today.
- Roger Thomas. (2006). The Deficit Reduction Act and You. CRS Bulletin.