Gotta Wear Shades

Ms. PACS: “It was a good year for science,” says news editor Robert Coontz of Science magazine. He was referring to sightings of water jets blasting out of the south pole of Saturn's mystery moon, Enceladus, and advances in human embryonic stem cell research, which have the potential to turn into any kind of tissue. 2008 was also the year Harvard Medical School genetics professor George Church and researchers laid out an entire genetic map of a single person, while simultaneously a research team from Germany’s Max Planck Institute unveiled a complete map of the mitochondrial DNA of a 38,000-year-old Neanderthal.

A pretty good year for science. Especially at a time when the U.S. and world markets are suffering fiscal atrocities, a message we hear accompanied by ominous reminders that it will get even worse next year!

Before buying a shovel, lets first review this years’ accomplishments in radiology - kind of a George Bailey re-assessment of life. In 2008, radiologists won in the fight to restore $13 billion in reimbursement cuts, which gained a two-year moratorium on DRA cuts on technical components of imaging and delayed a 10.1 percent physician pay cut. The trade-off was to force physicians to use appropriateness criteria in an effort to self-regulate imaging. We’ll see how that pans out.

Another bell ringer was getting 48 states to adopt final coverage determinations for CT colonography when a conventional diagnostic colonoscopy is incomplete.

Also, 2008 saw the ACR and ACC join forces to prevent CMS from subjecting coronary CT and CTA to Medicare’s most restrictive payment policies. Here’s the big one – this year, Medicare not only boosted interventional radiology reimbursements by 40 percent, it also gave radiologists an hourly raise for radiology practice costs from $171 to $204. Not too shabby – in the worst economy since the great depression.

Now, lets look at what’s scary in radiology. For one, according to a recent study*, CT ownership in nonradiologist specialties is on the rise. The report showed that the growth trend is much more rapid among nonradiologists than among radiologists (85% among radiologists from 2001 to 2006, compared with 263% among nonradiologists). This means nonradiologists are gaining market share. Add to the doomsday tribute the fact that the number of non-pays is dramatically increasing.

Don’t fret, and although this may be difficult for our male readers, do your best to channel Scarlet O’Hare (fine, Tom Cruise for those die-hard machos), who so whimsically uttered, “Tomorrow is another day.” Question is, is tomorrow even worth living for? Well, there is a light at the end of the tunnel, albeit faint. A beacon of hope that may turn the whole thing around, resuscitate the messenger and continue to string us along.

No, it’s not another grossly exaggerated report by some research group based in Ireland claiming that “PACS has 90% market penetration in the U.S.” No, this comes from a more credible source, the American College of Radiology, which reported that “patients benefit when hospitals use PACS for studying diagnostic images.” In fact, the study, which was presented at the annual meeting of the National Patient Safety Foundation in San Diego this year, found that “69% of respondents noted that Web access to PACS saved ‘significant time’ in obtaining results from the radiology department.”

“Rapid access to both images and voice clips with the radiologist’s report can make a tremendous difference clinically,” noted ACR member Michael A. Trambert, M.D., one of the study’s authors, in a May 12 Business Wire report. “These features really speed up diagnosis and treatment for critically ill patients, because it’s fast and easy to get the information doctors need for decisions about care.” I know it sounds like I'm searching for something positive to say. But compared to be being berated by news that the financial world is crumbling and we’re all going bankrupt, instead of moaning about nonradiologists honing in on the radiologists’ business, and whining about more patients wanting freebies (who doesn’t), lets be hopeful and look to the future of one shining star – PACS.

The adoption of PACS is still promising, driven by replacement PACS, by small physician offices finally getting on board the digital train, by consolidation and the need for solutions that integrate disparate PACS and of course by the promised land - the adoption of cardiac PACS. Plus, with an endorsement like PACS is “fast and easy,” the future’s so bright – you gotta wear shades.

* Ownership or Leasing of CT Scanners by Nonradiologist Physicians: A Rapidly Growing Trend That Raises Concern About Self-Referral. David C. Levin, MD a,b, Vijay M. Rao, MDa, Laurence Parker, PhDa, Andrea J. Frangos, MS a, Jonathan H. Sunshine, PhDc. J Am Coll Radiol 2008;5:1206-1209.


PACSman: I’m writing listening to Frank Sinatra sing “It was a very good year” and am reflecting on my life at ages 17, 21 and 35. They were indeed very good years…Now that I am in the “autumn of the year” though I wonder if I have aged as “vintage wine….poured sweet and clear” or have just become vinegar…Few would question that I am probably the PACS market’s biggest cynic, but clearly it isn’t without cause either. So does that make me vinegar though or a fine wine worthy of being drunk “from fine old kegs from the brim to the dregs…”? Maybe both….

2008 might have been a great year for science, but it was a challenging one for PACS and 2009 will probably make 2008 look like a cakewalk…George Bailey probably felt he had reason to jump off the bridge this year too, but there are many Clarence-like reasons to hang in there too that Ms. PACS highlighted as well. And while the Irish were indeed tippling again with their rose-colored glasses forecast about market penetration, PACS continues to grow in spite or due to economic uncertainties. And why not? The benefits PACS offers far outweigh the costs….Companies making money on PACS sales though is another story…

The first thing that goes in a competitive sale these days is margins. That is why you see so many companies showing 12, 15, 18 or even 29% sales growth with ongoing negative margins. That redefines madness….

I just did a relatively small ($100K) deal for a client where all three of the CEO’s of the companies being considered flew in to visit with the client to try and close the deal on their company’s behalf… That, IMHO, is madness. True, these weren’t big companies, but the margins were also razor thin to begin with and the closer it got to year’s end and a decision the thinner they got with more and more “freebies” being offered to spice up the pot …Of course I’m the hero to the winner and a zero to the losers even though my only role here was to negotiate the contract and pricing with the selected vendor - and the customer made the vendor decision. But hey I’m used to taking all the blame by now…after all I had lots of practice during my 13 years of marriage….

So what needs to happen in 2009? Companies need to be realistic about what it takes to survive. Cutting heads isn’t the answer - cutting costs is…And no, the two are not synonymous either.

Selling smart is key…and so few companies sell smart any more it’s frightening. Being selective is also required. I use the politically incorrect yet accurate analogy of a guy in a bar looking for love in all the wrong places. He can be very indiscriminate and buy ten women one drink each, ostensibly giving himself better odds by playing the field more. He’ll lose because one drink per potential “sale” just wasn’t enough to do the trick. That more or less defines how the majors approach PACS sales - if it has a pulse, it has potential…

The same guy can also focus on just one woman and buy her ten drinks, but by the end of the night she’s much too tipsy for anything to happen so he wasted his money there as well. That defines the way a lot of the smaller independents do sales - putting all your eggs in one basket…

The smart guy bought three women three drinks each and then he had his pick when they all had just enough buzz to make a difference and saw him through their chardonnay-colored glasses.

The smartest guy of the bunch though watched vendors one and two try their best and work their charms and then honed in on the deal once the foundation for success was already established….Sorta gives new meaning to the words “fast and easy”…lol. Of course I don’t frequent bars any more or pick up tipsy women either - and if she wants to drink, she can buy her own ^*^$#@# drinks lest I be accused me of anything inappropriate….

So…. gotta wear shades? This could be the year, but only if while we are wearing the shades we look as good as Tom Cruise did in the movie Risky Business and adopt his mantra. Joel’s buddy Miles said it best in the movie: “Joel, you wanna know something? Every now and then say, "What the f*ck." "What the f*ck" gives you freedom. Freedom brings opportunity. Opportunity makes your future.”

Here’s to opportunity in 2009…Just say “What the f*ck!!” cuz if you can’t say it, you can’t do it…”