HOME HELP FEEDBACK SUBSCRIPTIONS ARCHIVE SEARCH TABLE OF CONTENTS		QUICK SEARCH:   [advanced] Author: Keyword(s): Year:  Vol:  Page:

This Article Full Text (PDF) Submit a response Alert me when this article is cited Alert me when eLetters are posted Alert me if a correction is posted Services Email this article to a friend Similar articles in this journal Similar articles in PubMed Alert me to new issues of the journal Download to citation manager Citing Articles Citing Articles via Google Scholar Google Scholar Articles by Thrall, J. H. Search for Related Content PubMed PubMed Citation Articles by Thrall, J. H.

Changing Relationships between Radiologists and Hospitals

Part II. Contracts and Resolution of Issues¹

¹ From the Department of Radiology, Massachusetts General Hospital, 14 Fruit St, MZ-FND 216, Box 9657, Boston, MA 02114. Received October 19, 2007; final version accepted October 24. Address correspondence to the author (e-mail: jthrall{at}partners.org).

Pervasive changes in the way medical imaging services are delivered in the United States are redefining the nature of relationships between radiologists and hospitals. Among the trends driving change (1) is the remarkable rise in the importance of imaging in acute care medicine, which has prompted physicians other than radiologists to be interested in providing imaging services. Subspecialization within imaging is becoming more important as the sophistication of procedures increases. There is a massive increasing shift from an inpatient focus to an outpatient focus in terms of the delivery of high-technology health care, and there are increasing demands from diverse stakeholders in the health system for better quality and service and more accountability from providers.

All stakeholders have an interest in how the issues that are reshaping the relationships between hospitals and radiology practices are being resolved. Contracts between radiology groups and hospitals will require important modifications that reflect these outcomes and the changing expectations in the practice environment. To achieve a beneficial equilibrium, hospitals and their affiliated radiology groups will need to better understand the needs and exigencies of one another and formulate strategies that take the parameters of the rapidly changing landscape of medical imaging into account.

	CONTRACTS: BENEFITS AND RISKS

TOP INTRODUCTION CONTRACTS: BENEFITS AND RISKS WHAT RADIOLOGISTS CAN DO... WHAT HOSPITALS NEED TO... CONCLUSIONS References

 
Financial and practice arrangements for radiologists who are part of an academic faculty practice or employees of multispecialty groups typically are determined by the governance and management structures of the respective organizations rather than by contracts between the radiology group or department and the host institution. Individual providers may have employment contracts.

For private radiology practices, contracts between the radiology group and the host institution are common but not universal (2), and the merits of a private practice radiology group having versus not having a formal contract with its host institution have been the subject of lively discussion and debate for decades. The trends that are now fueling change in the relationships between radiologists and hospitals warrant a reassessment of the benefits and risks inherent in formal contracts or service agreements.

A major advantage of contracts is the guarantee of some measure of stability to a radiology group over multiple years for access to work and the eliminated—or at least reduced—risk of the group being replaced during the term of the contract (3–5). By systematically negotiating and renewing contracts before they expire, a radiology group can strengthen its ties to a hospital and develop mutually beneficial long-term relationships. Radiology groups can use these negotiations as an opportunity to better understand how institutional leaders regard the performance of the group and preemptively identify issues that need to be addressed. Such understanding is useful in strategic planning and for modifying group behaviors, which are not infrequently related to the behavior of individual members.

Another key historic benefit of contracts (4,5), beyond providing a basic measure of stability in the relationship between a hospital and a radiology group, is related to exclusivity—that is, the granting of exclusive rights to a radiology group to provide imaging services in the hospital. In return for such exclusivity, radiologists typically agree to take on all responsibilities related to imaging, adopting a willingness to take the less desirable and less lucrative assignments along with the more desirable and more lucrative work that makes the overall arrangement acceptable and justifies the franchise model from the point of view of both sides.

In exchange for providing stability and granting exclusivity in providing imaging services, hospitals have typically tried to negotiate restrictions to the competitive business activities of their affiliated radiology groups. Hospitals do not want their affiliated radiologists to open private offices that will divert referrals from their own facilities.

Today it is becoming increasingly difficult for hospitals to grant radiologists completely exclusive rights to perform imaging services owing to relentless pressure from other specialists seeking privileges to perform an increasing variety of imaging procedures. In particular, interventional methods are being "carved out" of exclusivity provisions in contracts between radiologists and hospitals. The net effect of the trend toward broader granting of privileges for imaging is the probability that exclusivity is realistic only with respect to other radiology groups or other radiologists practicing in the institution and is no longer applicable to the overall practice of medical imaging or image-guided therapy per se. Radiologists who are considering entering into contracts with hospitals need to evaluate where they and the hospital stand with respect to turf erosion and understand what is and is not being promised. Hospitals continue to want anticompetition clauses while ceding turf to other specialists who typically are not burdened by such limitations; these acts render a double "hit" to radiologists.

As hospitals encounter increasing pressure to improve quality and service, they, in turn, pass these expectations on to their employees and professional attending staff members. In the case of radiology, hospitals now often seek to incorporate rigorous service standards into contracts. Important issues include report turnaround time, time between the request for and completion of an examination, measures of patient and attending physician satisfaction, and measures of resource use and efficiency.

Since many performance issues are dependent on the efficiency of hospital operations, including transcription systems, information systems, the performance of technologists and other workers, and even the quality and quantity of available imaging devices, radiologists need to evaluate the requested standards to determine whether they are intrinsically reasonable, whether the group has sufficient personnel to achieve them, and whether the hospital infrastructure and support systems are adequate to achieve them.

A hospital may seek improved performance from its radiology group or stipulate minimal standards of performance, but it must also be a willing partner in establishing the infrastructure and environment required to achieve these improvements. If report turnaround time is an issue, the presence or absence of a high-quality picture archiving and communication system coupled with an effective voice recognition reporting system can be pivotal in improving this important service metric. These systems are clearly the responsibility of the hospital.

Sophisticated hospitals are recognizing the importance of subspecialization in radiology and may include contract provisions that require the radiology group to have certain kinds of subspecialists, such as interventional neuroradiologists, available as part of the practice. Agreeing to this type of provision can be risky for subspecialties in which limited numbers of people are available for recruitment.

Depending on the way a contract is written, being in breach of one part of the contract can render a group in breach of the entire contract. Thus, even if a radiology group is meeting every other provision of the contract, it may be vulnerable for replacement if it fails to comply with one area of the agreement. It can be difficult to continuously satisfy all the terms of a contract that has numerous stipulated requirements.

The remarkable shift from inpatient to outpatient site of care delivery has created another highly problematic issue for hospital-based radiologists. Many hospitals have been slow to respond to the shift in site of service and have not yet acquired sufficient imaging capability to keep up with the demand for outpatient imaging services. When this occurs, it creates an entrepreneurial opportunity for physicians to build imaging facilities as freestanding entities or within their own practices.

To maximize their incomes, physicians in all specialties are looking toward services in which a technical component of reimbursement is available in addition to the professional component. Imaging services are an obvious target, and many radiologists are locked out of the opportunity to compete for global fee business because of hospital contracts that restrict them from opening their own outpatient facilities. If a radiology group is bound by contract terms that are against the group opening its own outpatient imaging facility, the group is potentially at a disadvantage in terms of growing or even maintaining its practice. If a group is left with a predominantly inpatient service mix, it has a further financial disadvantage because the typical inpatient examination requires more time to complete than does the same type of examination performed in an outpatient.

Some hospitals are willing to enter into joint ventures with radiologists. Instead of competing with each other, the hospital and radiology group compete with other providers of outpatient imaging services and do so on the basis of the same ethical referral model used within the hospital. For radiologists, partnership opportunities are highly preferable to being locked out of the opportunity to offer outpatient imaging services at locations outside the hospital. However, some hospitals are also entering into partnerships with nonradiologists for imaging services, rending another double hit to the radiology group bound by a contract.

Hours of coverage are becoming a special issue in contracts between hospitals and radiologists. During the era of emergency medicine radiography, radiologists would often provide coverage in the early evening and then expect their colleagues to review the radiographs, with the official report rendered the next morning (6). In this scenario, radiologists still might have been called to the hospital to review a confusing case or perform angiography or another special procedure, but on-site 24-hour 7-day-a-week coverage was rare except in teaching hospitals, where a resident was entrusted with the overnight responsibilities.

Today, the heavy use of computed tomography, ultrasonography, and to a lesser extent magnetic resonance imaging to examine patients treated in the emergency department has changed the equation forever. The desired standard of care is clearly "24-7" coverage by radiologists. This de facto standard is the basis on which commercial teleradiology companies are founded. By the same measure, the presence of teleradiology companies has strengthened the de facto standard by making it much easier to meet.

The franchise model that existed in the past is gone (1), and radiologists must understand this when negotiating contracts with their host institutions. The generalist model of radiology practice is also going to progressively become less frequently accepted by hospitals and specialists from other disciplines who are looking for subspecialty-level expertise in the interpretation of images obtained in their patients. There is no single correct answer to the question of whether a contract between a hospital and a given radiology group is equally beneficial or laden with too many pitfalls. Each group has to make this determination on the basis of local conditions while being mindful of the issues discussed above, among others.

	WHAT RADIOLOGISTS CAN DO TO IMPROVE RELATIONSHIPS WITH HOSPITALS

TOP INTRODUCTION CONTRACTS: BENEFITS AND RISKS WHAT RADIOLOGISTS CAN DO... WHAT HOSPITALS NEED TO... CONCLUSIONS References

 
In their strategic planning, radiologist groups should step back and consider how their affiliated hospitals and physician colleagues view their practices. Is the group regarded highly? Is it an engine of innovation pulling the hospital forward or an anchor holding it back? Is the group meeting stakeholder expectations for coverage, service, quality, and subspecialty expertise? Groups that measure up well in terms of these fundamental questions are likely to be highly valued by their affiliated institutions and to have some latitude to resolve issues favorably—turf issues not withstanding. Groups that have coasted along thinking that they have a secure franchise while failing to meet expectations are at risk.

Although honest evaluation of a practice's performance is challenging and will not be welcomed by all because it can be threatening, it is an invaluable source of the business intelligence needed to guide a group's relationship and contract negotiations with its host institution. Patient and referring physician satisfaction surveys can provide invaluable insights and add a measure of objectivity to practice assessments that can also be used in negotiations.

When issues exist, radiologists should engage hospital leaders to work together to address them, and these radiologists will be well received if they take the initiative rather than wait for the hospital administration to step in. When there is a disparity between current performance and desired performance, both sides—the hospital and the radiologist—need to extend a good-faith effort to address the problem. If the desired performance cannot be achieved immediately, a "gap-to-goal" method can be used to identify intermediate milestones of improvement. Unless there is goodwill on both sides with willingness to address the issues together, the relationship is doomed to be contentious. Radiologists must be alert to both their own behavior and that of the hospital administration, because unwillingness by the administration to engage in problem solving with them may be an indication that the hospital leadership has lost confidence in the group or is either indifferent to or unknowing of the group's needs.

Radiologists should consider whether their business models are still suitable for current conditions and what initiatives they can take to become more robust. For example, hospitals have consolidated for a variety of reasons, including to wield more clout in negotiations with third parties and to become efficient in various business ventures. Radiology groups should consider the merits of coming together and forming larger groups for these same reasons.

Radiology groups that perform services at multiple hospitals will have more bargaining clout in negotiations with both hospitals and third-party payers. Through economies of scale and critical mass, larger groups can recruit more capable business management support personnel and provide better infrastructure to their members. Small groups are often dependent on a single hospital contract and thus especially vulnerable. Larger groups that service multiple institutions and also have their own imaging centers or joint ventures with their hospital partners are less vulnerable economically and contractually.

Groups that service multiple institutions through a common picture archiving and communication system platform or by using the right network architecture can shift work between locations. This makes each radiologist more efficient because diminished productivity during slack times is avoided while better service is provided at all locations owing to the shift of work between locations when backlogs begin to occur.

Realizing the full value of imaging examinations will increasingly require subspecialty-level expertise. Larger groups can share subspecialty expertise across multiple locations to meet contract expectations for subspecialization.

Teleradiology can be viewed as a threat or an opportunity. Small practices should consider forming teleradiology partnerships with academic centers that can help with complex cases that require subspecialty-level expertise. If radiologists organize themselves in larger groups, they can use teleradiology in a manner similar to the manner in which commercial teleradiology companies use it and provide very efficient 24-7 service across multiple locations (6). Larger groups can develop their own internal 24-7 coverage systems without undo hardship on individual members. The bottom line is that imaging is on the critical path of care delivery and therefore must be performed in a timely fashion—by someone.

Loss of exclusivity and corresponding loss of turf, especially for interventional procedures, are facts of life that radiologists must recognize as broadly inevitable. The turf horse is long out of the barn. For a variety of reasons, hospitals are giving in to other specialists who want privileges for services formerly provided by radiologists only. This trend is likely to not only continue but also worsen.

Radiologists need to make their affiliated hospitals aware of the possible unintended consequences of loss of turf to their practices. For example, if the amount of attractive interventional work coming to a practice falls below a critical level, it may not be possible for the radiology group to retain interventional radiologists. In educational settings, loss of case material can undermine the capability to provide adequate training. Radiology groups also need to make their affiliated hospitals aware of all the extra things they do that may not be attractive to newly privileged physicians and try to reach an equilibrium in which their needs for access to case material, as well as the hospital's need to accommodate other specialists, are met.

Radiology groups and individual radiologists who understand the tectonic shifts facing them can respond accordingly by organizing themselves to mirror the scaling factors in their environment and meet quality and service expectations. Among private practices, those larger radiology groups that practice across multiple locations and offer subspecialty-level expertise will be in a stronger position than the smaller, single-practice groups that cannot offer 24-7 coverage or subspecialty expertise.

	WHAT HOSPITALS NEED TO CONSIDER

TOP INTRODUCTION CONTRACTS: BENEFITS AND RISKS WHAT RADIOLOGISTS CAN DO... WHAT HOSPITALS NEED TO... CONCLUSIONS References

 
Physicians want to perform work that is professionally interesting and financially rewarding. No one fights for scut work or work that is poorly reimbursed for the time and effort involved (1). Hospitals need to be mindful of the negative financial consequences of their increased expectations for radiologists to provide more and better service and of the financial hit to their radiologists due to the loss of exclusive privileges. Hospitals that ignore the interests of their radiologists in turf wars may awaken one day to face the negative consequences of giving away turf to other specialists while ratcheting up service and coverage expectations for their radiologists: They may lose their radiologists.

In hospitals, radiologists perform innumerable tasks that they historically took on as part of their franchise responsibility and not because the work was intrinsically interesting or financially rewarding. Tasks such as chest tube placement, portable radiograph interpretation, emergency department coverage, imaging protocol development, equipment selection, compliance and accreditation activities, teaching technologists, and helping to manage daily operations are vital to the efficient functioning of hospitals and their radiology services. These activities generally are of no interest to physicians in other disciplines who seek privileges to perform diagnostic imaging procedures or image-guided therapies. Such activities are time consuming and not financially rewarding for radiologists, but they have always been part of the franchise. The vascular surgeon who drops in to perform an elective procedure at 10:00 AM does not share in these activities.

Hospitals that grant privileges for interventional procedures to any group of other specialists will discover that these specialists are less interested in providing 24-7 coverage than in performing elective procedures during regular working hours. Moreover, other specialists who provide imaging services generally are fragmented in their interests and abilities and thus would be hard pressed to provide the kind of comprehensive coverage offered by radiologists. Simply catching the work that falls between the cracks of the interests of other providers will not be a sustainable model for retaining interventional radiologists. Hospitals should ensure that interventional radiologists have sufficient work to keep them professionally interested, motivated, and financially whole.

Hospitals should work with their radiologists to stay as close to the state of the art in imaging equipment and other capabilities as possible. One of the worst situations for a radiology group to be in is that in which the group is restricted by contract provisions from establishing an imaging center while it works in a hospital that has outdated equipment. Having to sit and watch other physicians buy state-of-the-art equipment for their offices or start imaging centers while your affiliated hospital makes due with outdated gear is akin to watching a case go untried owing to double jeopardy or losing the same game twice. Provision of adequate support for technical operations is the hospital's responsibility and a major indicator of the facility's commitment to its relationship with its radiologists.

Hospitals should, apart from anything else, establish dialogs with their radiologists and try to objectively determine how the changing landscape is affecting both parties. Hospitals do not have unlimited resources and cannot hold back the tides of change, but they can work constructively with their radiologists to achieve the most mutually beneficial outcomes. Hospitals should consider working with their radiology groups on joint ventures for outpatient imaging or to develop other gain-sharing arrangements that add to the economic stability of both the hospital and the radiologists—especially in situations where the hospital has been compelled to grant imaging privileges to other specialists.

	CONCLUSIONS

TOP INTRODUCTION CONTRACTS: BENEFITS AND RISKS WHAT RADIOLOGISTS CAN DO... WHAT HOSPITALS NEED TO... CONCLUSIONS References

 
The issues facing radiologists and hospitals are likely to have a polarizing effect on hospital-based radiology practices. Some institutions will be very radiologist friendly. These institutions will be characterized by their willingness to probe and understand the issues, invest in imaging infrastructures, and work with their radiologists to achieve mutually desirable outcomes with respect to turf and site-of-service challenges, among others. The affiliated radiologists will share institutional values regarding quality and service. The two entities will share a culture of mutual respect and trust that will allow them to resolve issues and weather change. Other institutions will struggle with their radiologists because they do not perceive the value of having a strong affiliated radiology practice or because they cannot engage in discourses with their associated radiologists to address the important issues facing them, such as the need for better quality and service. Turf and practice opportunity issues are likely to remain unresolved or be resolved contrary to the interests of the affiliated radiologists.

Goodwill, trust, and respect for each other's needs are the fundamental building blocks for establishing good and enduring relationships between hospitals and radiologists. The attitudes of hospitals and radiologists toward each other and the culture in which each entity goes about resolving issues are far more important in achieving a beneficial and sustainable coalignment of interests than are contract recitations.

	FOOTNOTES

 
Author stated no financial relationship to disclose.

	References

TOP INTRODUCTION CONTRACTS: BENEFITS AND RISKS WHAT RADIOLOGISTS CAN DO... WHAT HOSPITALS NEED TO... CONCLUSIONS References

 

1. Thrall JH. Changing relationships between radiologists and hospitals. I. Background and major issues. Radiology 2007;245(3):633–637.[Free Full Text]
2. Sunshine J, Chan WC, Kassing PJ. Radiology practices and their contracts with hospitals, 1989–1990: a representative sample survey. AJR Am J Roentgenol 1991;157(6):1341–1347.[Abstract/Free Full Text]
3. Blau ML. Exclusive hospital-based service agreements: what radiologists need to know. J Am Coll Radiol 2004;1(7):467–477.[CrossRef][Medline]
4. Portman RM. Exclusive contracts in the hospital setting: a two-edged sword. I. Legal issues. J Am Coll Radiol 2007;4(5):305–312.[CrossRef][Medline]
5. Portman RM. Exclusive contracts in the hospital setting: a two-edged sword. II. Pros and cons, avoidance strategies, and negotiating tips. J Am Coll Radiol 2007;4(6):401–405.[CrossRef][Medline]
6. Thrall JH. Teleradiology. II. Limitations, risks, and opportunities. Radiology 2007;244(2):235–238.

This Article Full Text (PDF) Submit a response Alert me when this article is cited Alert me when eLetters are posted Alert me if a correction is posted Services Email this article to a friend Similar articles in this journal Similar articles in PubMed Alert me to new issues of the journal Download to citation manager Citing Articles Citing Articles via Google Scholar Google Scholar Articles by Thrall, J. H. Search for Related Content PubMed PubMed Citation Articles by Thrall, J. H.