Hinger analyzes the legislation as unintentionally penalizing the most cost-effective providers - the free-standing centers. While the DRA is a cost-containment initiative, Hinger believes hospitals have the leverage ability to strong-arm payers into paying higher reimbursements than free-standing centers. Hinger says he still hears payers admit that almost 60% of their outpatient imaging is done in hospital settings, despite all of their attempts to direct the business to more cost-effective providers. Hinger sums up, "Medicare has taken a shotgun approach to reigning in costs associated with imaging, instead of targeting those entities which have the propensity for inefficiencies. The shotgun approach is therefore achieving marginal savings in the short term, and crippling the ability of the free-standing centers to remain profitable." Diagnostic Health actively engages with various associations to ensure the legislative branch is aware of the negative effects of the DRA.

Wayne Webster, Managing Director of Diagnostix Plus Inc., Rockville Center, NY, has a different perspective from his work as a private consultant. Webster says the shake-up in the free-standing centers is more in line with a market correction, and the industry will eventually right itself. "Centers that were not running efficiently before the DRA was implemented would not be running efficiently afterwards, and suffer the consequences." Webster emphasizes that even in a tight economy, smart businesspeople find ways to stay afloat or even prosper. The key is learning how to do more with less.


One of Webster's recommendations is to "know what you need." Some marginal independent facilities simply spent more than they could afford (similar to home buyers suffering the current crisis in the housing market), and also paid more than they should have in order to run their business efficiently. By comparison, Webster notes, hospitals knew early on, prior to the DRA implementation, that efficiency would be vital to stay abreast with Medicare. Hospitals learned to streamline practices and to choose equipment with care to fit its requirements.

Webster recommends that centers be realistic and rational about their service - what needs to be accomplished, what is required for the patient base, and how much they should really spend. Even getting more patient traffic and increasing referrals doesn't always need to be a priority. The better route is to be streamlined in current practice and efficiency.

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