Facing Change in Radiology - But How?

For the past few years, nearly every writer and every organization in radiology have been issuing a call to arms for radiologists to prepare themselves for the changes that are coming. In a recent article, ACA and Radiology: The End of the Beginning, we described what we have seen so far as the beginning.

This is not to say we have seen the end of the changes. We believe we are now entering a different phase in the process of change. This case includes adapting to the changes already present and preparing for additional changes that are sure to come.

The real questions for groups who intend to be around for the end-game should be: What changes should we consider? How do we begin the process of making those changes, and how can we ensure those changes will help us be successful now and in the future?

In this series of columns, we will be describing specifics on how to transform a radiology group to create and drive a new culture of activism. This new culture will lead each member of the group to increased awareness of the issues facing the group, improved involvement in creating solutions, enhanced commitment to drive those solutions to a successful completion, and an understanding of how to create positive incentives to ensure each member of the group remains focused for the long term.

We look forward to your comments.

Part 1 - Introduction to a transformational model integrating cultural dynamics and changing health care forces to create the radiology groups of tomorrow

Over the past several years, due to the general economic turmoil, there has been more upheaval in business than most of us have ever witnessed. Health care has been particularly hard hit with changes and uncertainty. A significant transformation in the way health care is provided is already underway with the passage of the Affordable Care Act (ACA), and its recent validation by the Supreme Court.

There are now, and will continue to be, greater pressures to decrease reimbursement, decrease overall costs and generate ”appropriate” (read reduced) utilization. All of this is happening at a time of drastically increased utilization of resources by an aging population and a potential tidal wave of new participants in health care brought in through the ACA.

What are the issues?

New models for the delivery of health care, including the accountable care organization (ACO) and its variations, are being tried in order to decrease utilization and costs while improving the quality of patient care. Mergers and acquisitions among health care providers have increased to improve efficiencies and decrease costs. Consider, for example, the information released by Irving Levin Associates on hospital mergers and acquisitions (Table 1).

Table 1. Hospital mergers by year

*the highest number in the past decade 

Radiology has not escaped these pressures. In a survey done by Diagnostic Imaging, 21.5 percent of the radiologists responding stated they were considering an acquisition by or partnering with a teleradiology or third party company. Nearly 8 percent said they were in negotiations.

In general, the survey demonstrated radiologists were moderately concerned (2.82/5) about mergers or buyouts with a hospital or other private practices. Mergers or buyouts with a teleradiology company were of only slightly less concern overall.

Issues of expanding coverage and greater pressures on "turf" protection, coupled with changes in reimbursement, force small to midsize radiology groups to consider merging with other local or regional groups. Larger groups, seeking more volume to decrease excess capacity, expand their reach by acquiring hospital contracts with or without the radiologists. From the open microphone sessions at the American College of Radiology's May 2011, AMCLC meeting, slightly over 16 percent of radiologists present stated they had been a part of a practice that had lost its hospital contract.

All of these pressures to merge or die provide exactly the wrong atmosphere for a successful relationship. Under the best of circumstances, when all parties are interested and positive about the anticipated partnership, the process of joining two groups of radiologists can be difficult. And when the incentives to merge are driven primarily by fear, when that fear has passed, the partnership frequently fails due to those misaligned incentives, among other things.

When these partnerships are contemplated, the consequences for both groups must be anticipated before the final deal is consummated. If they are not, negative outcomes will be the order of the day. Assuming the reasons for merger are sound, a key component of successful partnership is the culture of the newly formed and soon to be integrated organization. Consider the words of CEO George Paz of Express Scripts: “To make a deal work, it really is about integrating cultures. Although you have to get the best and brightest of both systems, you also have to let your culture evolve as well.”

What is culture and why is it important?

Culture, whether in society or an organization, is the sum of the values, vision, beliefs, habits and accepted norms of behavior of the individuals within the group. Culture will determine whether a group is visionary and entrepreneurial, or fortress-like, or collegial and open. Whether featured in a mission statement or unspoken, this culture will govern the way the group interacts with its own members and its environment.

With a radiology group as an example, the environment is not only the hospital. The environment includes the clinicians and clinician groups with which it interacts, the hospital administration and other local or regional radiology groups.

What drives a culture depends on the issues the group is facing. These can be short or long term issues. Right now, the culture of most radiology groups is driven by "uncertainty avoidance," which is derived from a lack of tolerance to risk and relative intolerance to entrepreneurial activities and/or change. In the current atmosphere of significant change, the majority of groups are just trying to hold on to what they have had in the past. They attempt to create a vision of the future based on an idealized version of the past.

When creating a new organization, the change process can be daunting. Assessing each culture requires hard work and honesty on the part of all members. Four specific areas need to be evaluated:

• The concept of mission within each group,
• Adaptability or level of aversion to risk/entrepreneurial activity,
• Involvement of physicians and team members in the organization as well as within the environment in which they practice,
• Consistency within the organization, which includes the ability to follow through on a course of action.

Based on these reviews, the ability for each group to adapt to a new paradigm following the merger can be determined with some reasonable certainty.

Changing the culture, while exceedingly complex and prone to failure for any of a number of reasons, is basically a two-part process. First, there must be a recognition and evaluation of differences between the cultures and acceptance of the existence of the differences. Second, there needs to be a reconciling of the differences between the cultures with no focus on or attempt to justify any component of either old culture. The focus should be on the new culture and what will work best for the future success of the combined organization.

Developing the new culture will require a new integrated mission and vision. The new mission and vision needs to be understood by everyone in the group, with the recognition that the new culture will be stronger and more advantageous for the groups collectively and for the individuals. Next, there will be a need to establish and affirm the new culture within the organization. This requires clearly describing and explaining the differences from the old culture and the change to the new, and where necessary, plainly and honestly giving the reasons for the changes. A new mission or vision statement for the combined organizations should be written and distributed to the members.

In the second part of this series, we will describe how a new, energetic culture is the most valuable change-agent to ensure success now, and the future.