Once-rival radiology services firms Imaging Advantage and RadNet (RDNT) are partnering to bring lower imaging costs to the healthcare system as fee-for-service medicine that has rewarded unnecessary test-ordering moves to a value-based care model. Imaging Advantage, which is backed by Goldman Sachs (GS), and RadNet say they have signed a deal to bring hundreds of RadNet’s radiologists and outpatient centers into a cloud network in hopes of reducing the costly number of unnecessary X-rays, CT scans and MRIs in an imaging industry known for its waste and fragmentation. Imaging Advantage, which provides radiology services primarily to hospitals, says its technology allows for a “17-minute turnaround time” when it comes to reading MRIs that can cost up to $2,000 or more. Under the “strategic partnership” announced this morning, and therefore expand Imaging Advantage’s “cloud-based network to 550 radiologists serving over 400 facilities.” Imaging Advantage will manage more than 130 radiologists who will read 2 million annual exams as part of a multi-year deal. Imaging Advantage will bring its cloud-based technology to RadNet's outpatient facilities to improve... [+] MRI turnaround times. Shown here is Imaging Advantage's reading center in Detroit, which is modeled after Star Trek's Starship Enterprise. (Imaging Advantage photo) “We can allow the doctors in the hospital to read off of our platform for multiple facilities simultaneously,” Imaging Advantage chief executive officer Naseer Hashim said in an interview. Imaging Advantage, along with other companies like IBM and General Electric , is rolling out new products and systems to link radiologists and imaging machines to health clouds. Their goal: reduce waste in a healthcare system known for its unnecessary duplication of services that costs hundreds of billions of dollars a year, particularly when it comes to radiology services. The RadNet-Imaging Advantage partnership is an unusual alliance between firms that in the past competed for patients in a lucrative market for expensive diagnostic tests and related radiology services. But the Obama administration has been moving the Medicare insurance program for elderly Americans away from reimbursing medical care providers via the traditional fee-for-service model known for rewarding volume of tests and procedures provided. And giant health insurers like Aetna , Anthem , UnitedHealth Group and Blue Cross and Blue Shield plans are shifting tens of billions of dollars in payments to providers via value-based models. “As we encounter more opportunities to provide our services on a larger scale and participate in leading-edge risk management models, we are pleased to be working with Imaging Advantage and its highly innovative cloud platform and business strategy,” RadNet chief executive officer Dr. Howard Berger said in announcing the deal. The Affordable Care Act, Medicare, employers and commercial insurers are moving to new models like medical homes and accountable care organizations (ACOs) that put medical care providers at risk, encouraging them to use fewer unnecessary tests and procedures. If doctors and hospitals improve outcomes, they reap money saved or get bonus payments for improving quality. “In the fee-for-service model, everybody is fighting for every dollar,” Hashim said in an interview. “Now, all of these parties can be a part of a model that encourages population health.” RadNet and Imaging Advantage see this new world as one that will require them to sign deals with insurers who want MRIs and X-rays read quickly, less costly and done right the first time.
Former rivals Imaging Advantage and RadNet are joining forces to bring lower costs to MRI scans, and help avoid unnecessary testing, as US medicine moves away from a fee-for-service to a value-based healthcare payment model. The two companies announced the deal on Tuesday at an event in New York City hosted by the American Society for Clinical Oncology.