National and Regional Radiologist Shortages Challenge Radiology Groups
September 13, 2023
There’s a nationwide shortage of radiologists, which is particularly acute in Southern California. One of the driving factors in this labor shortage is that California has some of the lowest reimbursement rates for radiology in the nation. This is largely due to the region’s preponderance of Health Maintenance Organizations (HMOs). Through this model, large HMO health plans delegate financial responsibility for the provision of all specialty services, including radiology, to medical groups and independent physician associations (IPAs), which have been forced to trade volume for lower prices.
This has created an environment where competing, out-of-area radiology groups can recruit radiologists away from Southern California by offering higher compensation. On the other hand, Southern California-based groups do not have the same revenue base to recruit and retain the best radiology talent. While this is not a new situation, there is a new wrinkle.
Historically, a radiology group in Georgia may want to recruit a group or a doctor from Southern California. The group would offer, for example, a 25% increase in compensation in exchange for moving to Georgia and joining their group. However, with today’s advances in technology, the ability to quickly transmit images around the country, and a broader acceptance of remote healthcare interactions as a result of the COVID-19 global pandemic, a remote reading model is a reality. So, out-of-state groups can not only offer more money, but they can also offer remote jobs so radiologists don’t have to move. This eliminates one significant obstacle for radiologists in Southern California to take advantage of out-of-state opportunities.
Supply Versus Demand Imbalance Creates Challenges
This situation creates an imbalance between supply and demand for radiology services in Southern California. Unfortunately, prices (i.e., reimbursement rates) are slow to respond to this imbalance, because it’s not a perfect market, particularly as reimbursement is typically tied to a Medicare fee schedule. This issue is compounded by a decades-long chipping away at radiology reimbursement rates.
Just this year, on July 13, 2023, The Centers for Medicare and Medicaid Services (CMS) released its initial 2024 Medicare Physician Fee Schedule (MPFS), which includes new fee cuts for both diagnostic and interventional radiology. The preliminary relative value unit changes include the following:
- 3% reduction for diagnostic radiology
- 4% decrease for interventional specialists
- 3% less for nuclear medicine
- 2% reduction for radiation oncology
Fee schedules don’t react quickly to imbalances, particularly regional imbalances.
Hospital radiology groups, in particular, are really struggling with this lack of radiologists. Many hospital groups are forced to heavily subsidize their radiology groups to keep them viable. I’ve worked with some practices that are facing significant strain because hospitals are not yet aligned with the urgency and financial gravity of their situation. They are left scrambling to recruit new radiologists while using expensive out-of-state temporary radiologists to keep their radiology groups functioning.
Another challenge for radiology groups, particularly as it relates to hospital radiology groups, is that radiology is increasingly perceived by medical students and residents as an Emergency Department specialty requiring 24-hour per day, seven-day per week coverage. This can be perceived as a less desirable specialty, and thus residency vacancies are going unfilled.
There is also fear among some medical students and residents that advances in imaging technology and artificial intelligence (AI) may make the radiologist’s role obsolete. This fear prevents some medical students from selecting radiology as their specialty. My experience tells me that this will be a slow evolution, where new tools will be introduced to help radiologists do their jobs better, faster, and more easily–thereby improving the quality of the radiologist’s job, rather than replacing radiologists. But for someone about to embark on a 40-year medical career, the fear is understandable.
For all of these reasons, the pipeline for new radiologists is not full.
All the while, demand for radiology services continues to increase. A shortage of radiologists can also negatively impact the turnaround time between the imaging and the interpretation, which slows the time to therapy. Delays in turnaround time are felt acutely in the emergency department.
Some people suggest a possible solution is using more physician assistants (PAs) and radiology physician assistants, although radiology physician assistants aren’t licensed in a lot of states yet. Certainly, that can help, but I don’t see that as a realistic near-term solution to the radiology shortage.
The solution is going to take time and encompass a lot of different elements, such as:
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- Limited use of AI
- Leveraging PAs and radiology physician assistants
- Non-radiology specialists taking back the interpretation of some imaging studies
- More appropriate use criteria to limit unnecessary imaging and slow the increase in demand
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