The broad message at AHRA's annual meeting in Orlando, Fla. this week wasn't a rosy one. In so many words, it was a rude awakening for the industry.

"It's clear that it's a nasty world out there [in radiology], but in any turbulence there's opportunity," said Lawrence Muroff, president and CEO of Imaging Consultants Inc.

Throughout the show, a big annual event for radiology administrators, speakers warned that the U.S. health care delivery model was changing, and imaging departments had to get on board or be left behind.

Unsustainable

Keynote speaker Brian Klepper, managing principal of Healthcare Performance Inc., attributed the coming changes to larger economic dynamics in health care.

According to Klepper, health care spending has gotten to the point where it's
now draining the U.S. economy. "In other words, it's eating up growth," he said. And the unsustainable U.S. health care system, which Klepper said essentially encourages specialists to practice to the codes, is leading policymakers to embrace new payment models.

ACOs and bundling

Despite the debates around health care reform (and they will only increase given the election), new payment models are already being implemented on the ground.

Accountable Care Organizations have become one of the most talked about provisions under health care reform. Essentially, ACOs are a network of doctors who share the responsibility for a patient's care and are not paid for their individual services but instead are incentivized with bonuses for keeping costs down.

"This is going to happen folks, I promise. And insurance companies sure like it," said Shawn McKenzie, CEO Ascendian Healthcare Consulting.

In fact, it's already happening. Laurel Sweeney, senior director of global reimbursement for Philips Healthcare, mentioned that 32 organizations became ACOs as of January this year.

"We see more cropping up everyday. More people are getting involved," she said. Most are Medicare-based, but private insurance companies are following suit. According to Sweeney, many large payers like Cigna have set up ACOs for the private market.

Bundled payments, which give providers a sum of money for an episode of care, are also taking off. Around the country, demonstration projects are looking at ways to structure this model, which will include imaging, Sweeney said.

"You will still have fee-for-service, you'll always have that, but the push toward other payments is happening quickly," she said.

Rewarding value

Payers are also pushing to get more of a high-performance bang for their buck, according to Keppler. This means health care vendors will need to appeal to purchasers on the basis of cost, quality and safety.

The Centers for Medicare and Medicaid will begin paying hospitals in its value-based purchasing program in October.

"Basically you've got winners and losers," said Sweeney. "You've got a bucket of money and money will be given back to the winners, and if you don't do well, you have a cut in payments."

Through its program, CMS evaluated hospitals across 12 clinical measures and one patient experience measure.

Across all health care services there is pressure to demonstrate and gather evidence-based outcomes. Sweeney said hospitals' CEOs are already looking into equipment purchases that are backed by evidence and can demonstrate good patient outcomes.

Reimbursement

Declining reimbursement can't be ignored in any discussion about what's negatively impacting the practice of radiology.

"Wouldn't it be great if 2015 looked like it did in 2009 or better yet, 2005 before DRA [the Deficit Reduction Act]," said Muroff.

As he did last year, Muroff spoke at AHRA about reimbursement cuts -- for both the technical and professional components -- and the picture he painted was even bleaker.

"The problems are still the same from last year. They are only intensified," he said.

Reimbursements are being slashed to an even greater degree, he observed, with increases in equipment utilization rates; consolidation of interventional
radiology and CT codes; adoption of Medicare rates by other insurers; and homogenization of the regional reimbursement variations.

A failure by Congress to fix the sustainable growth rate (SGR) formula, which calls for a 30 percent cut in Medicare reimbursements to physicians next year, will result in even more pain. Sweeney predicts a fix (likely a short-term one) won't happen until after the election.

Workforce shake-up

As payers focus on performance-driven reimbursements, multi-specialty care teams will increase, according to Sweeney.

Speakers also discussed the shift under health care reform toward primary care. "They will be the gatekeepers for any kind of imaging. Working with them is going to be important," said Sweeney.

At the same time, Muroff said hospital administrators are beginning to place less value on radiologists. "It's difficult to get them to consult with referring physicians, hospitals become less attached to them and turnover is common -- something unheard of 10 years ago."

While some may disagree that radiologists can be easily replaced, Muroff cautions that a dramatic workforce shift will occur. He said it's happening as hospitals become more comfortable outsourcing and advanced professionals like radiology assistants and radiology practitioner assistants play a greater role -- in part, to help facilities save money.

"Any study can be read by anyone at anytime in any place," he added, referring to inroads made by teleradiology.

National radiology entrepreneurial companies are also a reality. In Australia, for example, three to four companies already control the majority of radiology practices. And they are appealing to hospitals for many reasons, quality metrics foremost among them.

Who's going to lead the change?

Klepper said radiology staff members need to be fluent in data tools, which can help them prove the value of imaging and build a more competitive practice.

McKenzie said radiology administrators have the chance to step up to the plate.

"This is an opportunity to lead the change in the new paradigm," said McKenzie. "You're the leaders and the time is now."