CAD could pose bigger threat than offshoring

U.S. radiologists face more of a threat from advances in computer-aided diagnosis than from foreign radiologists who perform interpretations at reduced rates, according to a speaker at the RSNA meeting.

Frank Levy, an economist at the Massachusetts Institute of Technology, said image interpretation doesn't meet the conditions that traditionally lead to offshoring, but that CAD could gradually encroach into radiology reads.

Levy was the opening speaker at a scientific session on teleradiology, a first for the conference. His point of departure was the limited success foreign-based teleradiology companies have had in capturing part of the U.S. market. Only the Bangalore-based company run by session moderator Dr. Arjun Kalyanpur, a Yale University-trained radiologist who employs U.S.-boarded radiologists, is active in the U.S. market, Levy said.

(Wipro, an India-based technology giant, says it provides teleradiology services to four U.S. hospitals that it declines to identify. It is likely that most or all of that service involves 3D reconstructions.)

Research presented at the session tracked the rapid expansion of teleradiology, the leading telemedicine application from 1999 to 2003, and found referring physicians to be generally biased in favor of local over remote radiologists.

Tasks that are sent offshore can usually be broken into a set of step-by-step procedures or rules. Radiology practice is the antithesis of that process, and the slow evolution of CAD proves the point, according to Levy. Difficulties in computerizing interpretation show that it is hard to articulate underlying processes, which requires tacit knowledge and case-based reasoning.

Other factors also mitigate against the offshoring of radiology reads. The profession is heavily regulated and training is expensive and extensive, so the supply of radiologists is very limited in areas that might provide offshore interpretations. Drawing those radiologists into the market for U.S. image interpretations would require a fast runup in their wages, Levy said.

Even if an image is shipped offshore for interpretation, it must be captured in the U.S., and the biggest share of that cost goes to pay for equipment, the technical fee. Those who want to reduce the cost of imaging, therefore, are better off reducing the number of scans than looking for low-cost interpretations.

In the long run, U.S. radiologists face more of a challenge from CAD, Levy said. He cited the ubiquitous bank ATM, which cannot do everything a teller does but has still dramatically reduced the need for human workers. CAD could be making similar inroads into radiology practice in five to eight years, he said.

A survey of attitudes by referring physicians toward offshore teleradiology showed them to have a clear bias toward the local radiologist. The survey was conducted at Yale and led by Dr. Neil Lester, who now practices in New York City. It went to 350 referring physicians and asked for responses to different scenarios. The survey had a 34% response rate.

It found that if all variables are held equal, referring physicians strongly prefer working with local over international radiologists. When the international radiologist provides either a two-day faster turnaround time for reports or a $30 lower out-of-pocket cost to the patient, referring physicians still prefer local radiologists, though less strongly.

When the international radiologist provides both a two-day faster turnaround time and a $30 lower out-of-pocket cost to the patient, referring physicians preferred international radiologist, but by only a slight margin. Finally, when the credentials of the international radiologists are perceived to be weaker than those of local radiologists, referring physicians overall strongly prefer local services even given the same faster turnaround and lower cost.

"Quality comes first," Lester said. "With high-quality interpretation, the risk of having one's work outsourced is low."

A 2003 survey of teleradiology found that 67% of radiology practices in the U.S., which included 80% of all U.S. radiologists, reported using teleradiology, a significant increase from 58% in 1999. Assuming that growth continued on a linear basis, 90% of radiologists would be using teleradiology today, said Dr. Todd Ebbert of Yale. He won an RSNA resident research prize for the paper.