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How to Revitalize Radiology Revenue
By MedQuest Media Posted April 17, 2015 in Industry News
Originally Published by the Healthcare Financial Management Association, by Bruce Elder
In the early 2000s, radiology revenue increased year after year despite minimal marketing or patient outreach. According to The Advisory Board, imaging services accounted for 37 percent of hospital profits in 2007—three times as much as cardiology, the second-most profitable service line. But radiology revenue and profits are facing challenges in the form of low-cost competitors and shrinking payments.
What used to be a cash cow is under significant pressure, so now is the time for health systems to perform a comprehensive assessment of radiology service lines to uncover both opportunities and threats. A thorough assessment often reveals that organizations need more up-to-date processes for growing, capturing, and defending radiology revenue.
Revenue Growth Strategies
At the very least, a health system's radiology strategy should include having an individual on staff dedicated to promoting the health system's radiology services by calling on potential referral sources—and believe it or not, this one step would be far more effective than what most health systems are doing. A dedicated health system radiology representative can dramatically boost revenue by leveraging relationships with referral sources.
But radiology service providers should do much more than that to drive revenue growth. It's more important than ever, for example, to have technology tools in place to track and measure results and gauge ROI and program effectiveness, as well as seasoned leaders who can provide oversight and accountability in guiding radiology promotional efforts.
Health systems also should exploit new revenue opportunities. Those that have their own outpatient imaging centers should explore untapped markets such as clinical trials, the military, and attorney lien business (scans related to personal-injury cases).
Enhanced Revenue Capture
Organizations should pay close attention to every stage in the process, from initial order to completed scan (the order funnel). In most radiology operations, there is considerable leakage at each key stage: orders, appointments, and visits.
Software tools, effectively applied, can help improve radiology workflow, staff productivity, and patient throughput. By improving areas such as order management, patient scheduling, cancellation and no-show management, and denials management, a radiology department can steadily move closer to its most important goals: getting all necessary scans done for patients and getting paid for 100 percent of orders received.
For example, reducing no-shows by just 1 percent can drive meaningful gains in captured revenue. But that type of improvement requires taking a fresh look at how the organization verifies benefits, obtains pre-authorizations, and confirms patient appointments.
Times are a Changing
Ten years ago, many radiology service providers could run their businesses on auto-pilot and still see revenue growth. But that era is over. The best way to adapt to changing times is to conduct a thorough assessment of radiology operations and take concrete steps to find and retain revenue. A rigorous assessment sheds light on referral patterns, the competitive landscape, order-funnel leakage, training deficiencies, and many other issues. It's a reality check that sets the stage for new strategies to optimize radiology revenue.
Bruce Elder is chief development and strategy officer, MedQuest Radiology Management Services, Alpharetta, Ga.
Publication Date: Friday, April 17, 2015; Healthcare Financial Management Association.
About MedQuest Associates
MedQuest is a leading owner, operator and manager of diagnostic imaging facilities and hospital radiology services, with a network of nearly 50 imaging centers and 14 acute care hospital radiology departments under management. As one of the nation’s most experienced outpatient imaging partners, MedQuest also provides comprehensive services, including outpatient imaging management and joint venture (JV), referring physician engagement and service line performance consulting. Serving health systems, hospitals and imaging centers nationwide, MedQuest draws upon decades of operational experience and industry knowledge to deliver comprehensive guidance and solutions that increase revenue and optimize operations, while improving quality and the patient experience. MedQuest’s industry-leading proprietary systems and processes create an unrivaled value proposition for its partners. Learn more at www.mqimaging.com