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Vital Signs - Value Emerging as a New Currency in Medical Imaging Markets

  • June 2014
  • 5 pages
  • Frost & Sullivan
Report ID: 2169132

Summary

Table of Contents

Value Based Imaging

The concept of value-based imaging is certainly not new, but it has garnered considerable attention from the medical imaging community over the past few years. Confined until recently to the realm of thought leaders at luminary healthcare and advocacy organizations, the concept has gained wide momentum in the past year. Since medical imaging represents a fairly large segment of the broader healthcare market and certainly one of the most capital-intensive – even if dwarfed in size by other segments, such as its pharmaceutical counterpart, the rise of value-based healthcare in the US market begs the question, whether it is fair to say that value has already emerged as a major new currency within the US medical imaging market.

Is Value Emerging as a Major New Currency in US Medical Imaging Markets?

A recent white paper1 by the Economist Intelligence Unit deems value the “emerging new currency within health markets.” Since medical imaging represents a fairly large segment of the broader healthcare market and certainly one of the most capital-intensive – even if dwarfed in size by other segments, such as its pharmaceutical counterpart – this farsighted statement begs the question, “Would saying value has already emerged as a major new currency within the US medical imaging
market be too much of an overstatement?”

Value-Based Healthcare has Trickled Down to Imaging The concept of value-based imaging is certainly not new, but it has garnered considerable attention from the medical imaging community over the past few years. Confined until recently to the realm of thought leaders at luminary healthcare and advocacy organizations, including the brains behind the Imaging 3.02 initiative or the newly created Harvey L. Neiman Health Policy Institute, the concept has gained such momentum lately, it is now giving food for
thought to every imaging professional in the field.

Imaging professionals taking a minute to reflect on their own day-to-day profession or the discipline in general would likely question whether imaging, as they’ve practiced it until now, is indeed what is now being referred to as “volume-based imaging.” Additionally, they must be questioning how urgent it really is for them to “be prepared”3 for the next phase, the era of “value-based imaging,” which is slowly but surely coming to fruition.

Value Continues to Gain Ground as a Recognized Currency

There is no question that “emerging” is the right word to currently describe the rise of value in the mindset of the imaging community as a whole. The more important factor, however, is gauging the emergence of value as a major “currency” for the imaging market – meaning a significant medium of exchange between the various actors along
the medical imaging value chain – one that actually fuels the monetary fluxes throughout the system across its various constituents, including healthcare providers, imaging facilities (the technical component), imaging providers (the professional component), technology suppliers and payers. The statement by the Economist Intelligence Unit pertains to healthcare markets globally, but nowhere is it more applicable than it is to the US market. It is actually hard to think of any other country where the emergence of
value as a major new currency would drive as fundamental of a change and have as profound of an impact on the imaging market as it would in the US. Value-based imaging essentially breaks away with the “do-more, earn-more” mentality, aligning with American work culture and underlying volume-based imaging. It is, in many aspects, at the
antipodes of the reality of US imaging today.

Defensive medicine is one such reality that still characterizes the practice of US healthcare today. Having to strive in a highly litigious environment continues to lead physicians to aggressively order high-cost imaging exams with little consideration for the “big picture” of patient care – a factor that has provided a fertile ground for an overutilization of imaging in US healthcare.

Payers Pushing the Envelope for Value as their Currency of Choice

For payers, both public and private, the main priority has been to be able to shift part of the financial risk associated with over-utilization of imaging. To this aim, the Centers for Medicare and Medicaid Services will likely continue to employ the brute-force approach of slashing reimbursement rates for advanced imaging. However, today, other
utilization management approaches stand a higher chance than ever to be relied on instead. While payers have relied almost exclusively on radiology benefit management partners to act as their “gatekeepers” for advanced imaging, they are now seriously considering alternative models. One such model poised to gain ground is basing prior authorization on appropriateness criteria such as the evidence-based guidelines developed by the American College of Radiology (ACR Select) or the American College of Cardiology.

At the same time, payers are experimenting with their partners in more than 600 active US accountable care organizations today with pay-for-performance and bundled reimbursement models that would include imaging, lab tests and any other procedure that is part of a given care pathway for a particular condition. The plan is to
restructure their plans and policies such that they can base their coverage terms and rates on the clinical value and patient outcomes of complete pathways–that is, regardless of the volume of imaging procedures performed as part of the pathways. If this transition takes place on a wide scale, it will put an end to the traditional for-service
payment model, which has worked hand-in-hand with volume-based imaging to keep healthcare spending and market revenues growing so healthily in medical imaging over the past several decades.

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