John Ising is Administrator/Radiology of Medical Plaza Imaging Associates in Kansas City, MO. Ising is well aware of the DRA effects in his area, and of concurrent situations that the DRA cuts have exacerbated. Ising says several of the local centers have closed, and more might soon shut down in the Kansas City area. Contributing circumstances include private insurance payers matching Medicare cuts in payment. Additionally, Medicare always pays the lesser rate to the independent facilities - even if a local hospital has a higher rate than a center, Medicare pays the lower rate to the center. And if a hospital has a lower rate than the center, then Medicare also pays the center the same lower rate. Therefore, the DRA impact is exacerbated.

Ising's center has altered business practices to save money - such as not replacing a departing staff member, relying upon the savings in refurbished equipment, and foregoing new equipment purchases. These compromises can put a center in a tough competition situation. A 64-slice CT "may not be critical from an operation standpoint, but the lack of one puts some centers at a competitive disadvantage in not being able to keep pace with technology," Ising says. The Kansas City area is fairly competitive market. Doctors who refer patients for imaging procedures have read about the diagnostic potential in the higher capability scanners and will "shop around," making a tough situation tougher.


The hospitals are stepping up competition as well, receiving a good deal of publicity from the media outlets about the latest technology, and advertising heavily to attract more business. The dazzle of technology draws business away from the independent facilities, despite the centers' advantages in cost, time and convenience. In addition, more internists are becoming hospital employees or are contractually tied to the hospitals, which helps direct imaging business to the hospital itself. Ising believes more smaller facilities will likely be closing or be bought out by hospitals as the market continues to contract.

Adrian Riggs is Director of Imaging, for Solano Diagnostics Limited, Fairfield, CA. In Riggs' area he has little competition, with only three other centers in a 30-mile radius, each with different clientele. Nonetheless, Riggs sees that the DRA impact has been as severe as predicted: his center is also generating less income. Riggs has been fortunate to have excellent relations with an OEM, obtaining a new CT for an amount comparable to a pre-owned machine. Other centers in the area have had to delay or forgo buying new equipment.

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