It has become a truism that the U.S. healthcare system is going through a time of rapid, jarring change. With healthcare costs continuing to rise at unacceptably high rates of inflation, and with demographic changes including the aging of American society and a massive explosion in the incidence of chronic illness threatening a tsunami of cost and care burdens, the public and private purchasers of healthcare are pushing providers hard to shift to new payment models focused on value rather than volume. As a result, consolidation is everywhere: hospitals and health systems are busy merging with and acquiring each other and physician practices; physicians, too, are consolidating into larger multispecialty groups, while even specialist groups like radiology groups are becoming larger and more consolidated. And in the radiology area, even the remote-read companies and contracted groups are consolidating.
Then there is the phenomenon of vendor consolidation, which has been accelerating of late. Just consider the following examples from this year:
- In May of this year, the Stamford, Conn.-based Fuji Medical Systems USA announced that it was acquiring the Wauwatosa, Wis.-based VNA software firm TeraMedica.
- Also in May, the Minneapolis-based vRad (Virtual Radiologic), one of the largest remote-read radiology physician services companies, announced that it was being acquired by MEDNAX, a provider of maternal health, newborn, pediatric, and anesthesia services, for $500 million in cash.
- In August, the Armonk, N.Y.-based IBM announced it was acquiring the Chicago-based Merge Healthcare for $1 billion, in one of the biggest deals of its kind to date. IBM senior executives cited the potential to leverage analytics that would encompass imaging procedure patterns among patients as one of the benefits of the acquisition for IBM customer organizations.
- Dwarfing the IBM-Merge deal was the announcement in early October that the Round Rock, Tex.-based Dell Inc. was acquiring the Hopkinton, Mass.-based EMC Corporation for a whopping $67 billion in cash and stock. Of course, both Dell and EMC are companies whose enterprises span many industries. But healthcare industry observers agreed that that deal would have ripple effects across healthcare.
- Many smaller deals have taken place as well, including the acquisition of the Garner, N.C.-based Viztek in early October by the Japan-based Konica Minolta.
At the same time, imaging informatics vendors are responding—albeit primarily in reactive mode—to the shift in care delivery and payment systems towards payment for value, including to the development of accountable care organizations (ACOs), population health management initiatives, and the forward evolution of health information exchange (HIE). The concept of the vendor-neutral archive, which just two or three years ago was considered leading-edge, is coming close to becoming a standard architecture, at least in the ideal, for those now crafting enterprise-wide storage and sharing strategies for imaging.
What’s more, expanding policy mandates are set to strongly affect diagnostic imaging ordering patterns, and therefore radiologist practice patterns, and the use of information and modality technologies. One of the biggest mandates involves the ordering of diagnostic imaging procedures: one mandate that had been set for January 2017 was the requirement that referring physicians use appropriateness criteria when ordering advanced imaging for Medicare patients (at press time, the Centers for Medicare & Medicaid Services had just announced a delay in the effective date of that requirement, with a new effective date to come in the near future). While championed by the American College of Radiology, that mandate is proving worrisome for many practicing radiologists.
So what does this pace of change mean for imaging informatics? Above all, say healthcare IT leaders and industry experts, it means that CIOs, CMIOs, imaging informatics directors, and radiology and other medical specialty leaders, must think more broadly and strategically than ever before about the next few years in healthcare. Simply replacing an aging legacy PACS (picture archiving and communications system) or RIS (radiology information system) solution no longer makes sense. Instead, all of those interviewed for this article agree, healthcare IT and imaging informatics leaders must skate to where the proverbial puck is headed, and lay plans for an integrated, interoperable, specialty-agnostic, enterprise-wide-plus, imaging informatics future, one in which diagnostic images (from all specialties) will be shared in the same the way that all forms of healthcare data are shared across enterprises and beyond. And they must look to a time when images really are shared across the breadth of the U.S. healthcare system.
“From my perspective, there are at least two massive dynamics in the healthcare industry right now that aren’t just altering the landscape; in fact, our tomorrow in terms of how we practice medicine and operate, will be different from our yesterday,” says Rasu Shrestha, M.D., chief innovation officer at the 20-plus-hospital, 3,600-plus-physician UPMC (University of Pittsburgh Medical Center) health system in Pittsburgh. “Healthcare reform and consolidation are those two dynamics,” he says. “So there’s a massive amount of consolidation going on among providers, practices, payers, and vendors—Merge bought by IBM for over a billion dollars, for example. And this consolidation brings challenges of interoperability, efficiency, the need for us to do more with less. Then with healthcare reform, the train’s left the station. And it’s critically important to us: it brings challenges of volume to value. It particularly challenges to us practicing radiologists, because we’ve been so volume-focused,” says Shrestha, who continues to practice part-time as a radiologist himself.
“With regard to how we’re meeting change here at UPMC,” Shrestha says, “we look at consolidation and healthcare reform as offering us opportunities, first, to engage in patient-centered care; and second, to focus on newer care models. And as a payer and provider organization, we’re not just talking about it; we’re living and breathing it today. So these newer care models we’re developing and incentivizing our physicians, that’s real for us. And third, embracing new technologies—we’ve been doing that for three decades now. And it’s time for us to double down and really leverage technologies, and eliminate the silos.”
So what does all this mean for imaging informatics? “Imaging data is different from wave-form data, which is different from other forms of data,” Shrestha says. And working with all of those image and data forms at once requires that everyone, including radiologists, participate in re-visioning how to store and share data, including images, of all kinds, across and beyond the enterprise.”
In Philadelphia, a massive overhaul underwayAt Penn Medicine, which encompasses the University of Pennsylvania Health System, based in Philadelphia, senior vice president and CIO Michael Restuccia, and Jim Beinlich, associate CIO of entity operations, have literally been mapping out a future in which, as they see it, images are a normalized part of the health system’s data ecosystem, just like any other form of data—and of course, that is a revolutionary concept to execute on, given how departmentally focused imaging informatics has been (and in most places still is) until recently.
With regard to the sweeping changes taking place in healthcare IT over the past few years, Beinlich notes, that “Folks have been pretty preoccupied with things like ICD-10, meaningful use, getting their EHRs [electronic health records] installed, but the thing in the background has been enterprise image management, and that’s what precipitated us getting an enterprise-wide VNA”—vendor-neutral archive—he reports. Penn Medicine’s VNA technically went live this spring, he says, but it has been an ongoing process to “move people to the technology” since then.
“I remember Jim coming into my office 18 months ago or so,” Restuccia says, “and saying to me, ‘You know, Mike, I’m going to imagize your electronic medical record.’ And I said, ‘What do you mean by that?’ And he said, ‘We have six or seven PACS systems, we’ve got dermatology and cardiology systems, and they’re all managed differently and are on different platforms.’” In other words, standardization and normalization onto a single platform had to be the goal in their heterogeneous system. “So the VNA fits perfectly into the model of the three Cs: common systems (the one common VNA), centrally managed (managed out of corporate IS), and collaboratively installed. That’s our special sauce,” he says.
The bottom line is conceptually simple, even as it is monstrously hard to execute on in practice, Beinlich says, and that is this: “What I think is going to happen is that the expectation will be that it will be just as easy to get to images, and information about the images, as it is the EHR, so I should be able to access it from a smartphone, anywhere, anytime, and patients will want access, and then we’ll start to perform informatics work on images, to understand information we have on digitized images and the EHR, so that I can look at protocols, treatments, stratification of populations that we’re limited to right now based on the image report.” In other words, images of all types, and data (including radiologists’ reports), including EHR data, will all become more liquid and will become universally available, as appropriate, to clinicians across integrated health systems, and beyond—through health information exchanges (HIEs), and clinical messaging, and via other means.
Laying the foundation in Texas
The challenges of getting to that vision are many, and even some integrated health systems that have made advances in many areas are just beginning to take up this challenge in earnest. That is the case at the 24-hospital Texas Health Resources, based in Arlington, Tex., where Luis Saldaña, M.D., the health system’s CMIO, is working with his colleagues to strategize forward in this area.
“We’re trying to ensure value and reliable outcomes,” Saldaña says. “And with regard to imaging, we’re trying to deliver value. So we’re looking at bundled payments, and are doing care redesign, to make sure we’re delivering reliable outcomes, and we’re trying to deliver efficient and effective outcomes,” as facilitated by reliable image storage and transfer. Saldaña notes that “We’re not there yet” in terms of having an enterprise-wide VNA. “We have HIE capabilities, and we’ve started to leverage those, but we’re not there yet. Meanwhile, we’re working on both the VNA and HIE sides of this, and we’re probably going to look at a solution that combines the ideas of VNA and HIE.”
Speaking of issues facing the broader U.S. healthcare system, Saldaña says, “We get caught up in talking about the technologies, whether VNA or HIE, but they’re all workarounds to barriers around interoperability. Let’s say you’re a trauma surgeon who’s accepted a patient from a rural hospital. You just want to see the images from the CT scan. You don’t care how you see them. Nowadays, we often see a CD disk. That’s such a shortcoming, and we have to get around that. We shouldn’t be spending a fortune to do that. There’s no excuse for someone today to have repeat imaging. It used to be standard practice, because that shouldn’t be happening any longer.
Industry experts: it’s a “forest-versus-trees situation”
Leading industry experts agree: there has never been a time like the present, with regard to moving forward with strategies that encompass the broadest understandings possible of the shifting landscape in U.S. healthcare. Joe Marion, principal of the Waukesha, Wis.-based Healthcare Integration Strategies, and one of the leading industry experts in the imaging and imaging informatics areas, says of the massive changes taking place in U.S. healthcare, “It’s a forest-versus-trees situation. Healthcare IT leaders have got to think about what they’ve got now [with regard to technology], and how they’ll tie into ACOs, bundled-payment contracts, population health, everything, and what they’ll bring to those arrangements. And with hospitals and larger physician groups buying up medical practices and such, that is affecting everything, too,” says Marion, who has spent decades consulting in the imaging and imaging informatics areas. And one of the key areas of concern, he says, is making sure how to read the vendor landscape correctly. “Large vendors are in this mode now where they’re saying, from a sales perspective, how do we structure, how do we address the client? It’s no longer, I go to Hospital A, Hospital B, Hospital C, and sell them each a CT scanner. Instead,” he says, “imaging and imaging informatics vendors are working towards signing strategic contracts,” wherever possible, with large integrated health systems, contracts that will encompass both modality and imaging informatics technology and services. Indeed, he says, “It may even go to the point of onsite equipment support, and even to the point of [contracting around technologists and radiologists.”
Marion, who has followed the imaging informatics vendor scene for many years, believes that the mergers taking place now at an accelerating rate are very important. “Certainly, Merge/IBM and other mergers and acquisitions, are significant,” he says. “I spoke with someone at Merge last week, and a person there says they’ll operate as an independent subsidiary with an influx of people to assist with Watson integration, but otherwise will beat their own drum. But,” he says, “I’m wondering what the benefit of that arrangement is. I’m still wrestling with that idea, because, looking at past acquisitions of the sort, how long will IBM allow the Merge folks to act in an independent way? And Dell acquiring EMC could prove significant, too,” in altering the competitive and contracting landscape around vendors in imaging informatics.
The reality, Marion says, is that “There’s been an overabundance of vendors out there, particularly on the PACS side. Now, with healthcare IT leaders looking at things form a larger, enterprise-wide, perspective, that enterprise emphasis is going to influence buying and contracting decisions,” he says. A very important element in all this, Marion says, is what he calls the “decomposition of PACS. The Visage people use that term,” he notes. “And what it means is, let’s say I had been using Vendor A as my PACS vendor. Years ago, if I needed an upgrade, most people would have replaced the entire system. But now, people are taking new pieces of functionality, and adding them in. And in fact, if you go to a vendor-neutral archive architecture, and a universal viewer on an enterprise level, what’s left for PACS to do? The acquisition of images, workstation display and workflow. And so if you see it that way, you might only want certain new functionalities—and most importantly, you may no longer want to purchase an entire dedicated radiology PACS. And given that, how do these little guys survive in the market, when people are trying to take a bigger-picture view?”
Even the larger imaging and imaging informatics vendors are having to shift strategies in this rapidly evolving competitive market, says Jay Backstrom, a partner in the Atlanta-based consulting firm Subsidium Healthcare. “We’re seeing fewer and fewer independents out there,” says the Scottsdale, Ariz.-based Backstrom. “These larger vendors are wanting to add VAN to their portfolio of solutions, if they’re coming from the PACS space. That’s what was behind Fuji’s acquisition of TeraMedica—even though they ended up buying a partial competitor and a threat to their own core solution. But it was a way to try to maintain their existing installed base.”
Importantly, Backstrom says, “We’re seeing a trend towards consolidating enterprise and diagnostic viewing all on one workstation, so that physicians don’t need a dedicated PACS system. If you have a VNA and a viewer, do you need a whole PACS? If you have a viewer that can do diagnostic and enterprise reading, and a VNA for storage, you could replace a PACS system.” Will traditional PACS vendors disappear in the next few years? Backstrom says he wouldn’t go that far. “I don’t think they’ll be gone,” he says, “but they’ll be forced to change their game. Traditional PACS systems are built on legacy technology that is years old. So their solutions are going to have to change, or you’re at risk of losing their market share.”
So CIOs, CMIOs, CTOs, imaging informatics leaders, and other leaders in this space need to think very strategically and very pragmatically about their technology choices in the next few years. Still, says UPMC’s Shrestha, “I think it’s really important for us to understand at the end of the day that it’s really about the patient. And it’s easy to say that. But those who have endured frustrations in their own care or the care of loved ones, really understand that. In the meantime, we must achieve interoperability and adherence to standards; and ultimately, it’s less about technology, and more about leadership. We have to make this happen.”