Considering launching a new medical imaging service? Welcome to the club. Richard Broker, vice president of clinical operations for U.S. Radiology Partners (Dallas), asserts “Ideas for expansion are a dime a dozen. It’s easy to get wrapped up in the ‘build it and they will come’ mindset.” Broker’s best advise? “Don’t look at what you can build. Look at what you can collect.”

Of course, figuring out what you can collect on a new imaging venture is easier said than done. It comes down to a tangled web of market and demographics analyses. And don’t forget about the ins and outs of financing, reimbursement and staffing. These considerations, combined with increasing competition in the healthcare arena, can make launching a new service a risky undertaking. Broker admits a sad truth about medical imaging. “There is tremendous under-utilization of new equipment. There are very few locations in most parts of the country that are not reasonably serviced by all imaging modalities except PET.” This doesn’t mean a hospital or clinic can’t successfully launch new CT or MRI services. It does mean that the hospital needs to do its homework. That homework typically takes the form of a thorough market analysis. According to Broker, a lot of hospitals fail to complete that market analysis. And that failure can cost millions of dollars. Broker concludes, “No one is ever going to eliminate all of the variables, but a lot can be done to get 90 percent of the variables eliminated.”

Successfully launching a new service requires a specific threshold of procedures, which in turn, depends on nurturing relationships with referring physicians. A handful of states require that prospective providers complete a certificate of need (CON) prior to initiating a new service. The CON outlines the specific volume of procedures necessary to launch the service. Although the CON process is sometimes seen as a relic of the 1970s and has been challenged in court as a restraint of trade, it remains a reality in about 15 states. Generally, the CON is not wildly different from the market analysis, but in states that don’t require a CON the hospital can look at the numbers and make its own decision. In CON states, the state decides, and the state doesn’t necessarily operate under the same agenda as healthcare providers.

Please refer to the April 2002 issue for the complete story. For information on article reprints, contact Martin St. Denis