Measuring and Managing for Marketing
Success
Learning Objectives
Frank J. Lexa, M.D., M.B.A.
1.
Understand what commodities are
2.
Understand why commoditization is not inevitable and
how it can be prevented through smarter approaches to
radiology practice
3.
Analyze why becoming a commodity is a path to failure
4.
Develop strategies for differentiation and decommoditization
5.
Prepare for radical changes in our practices
Professor, Spain and Asia Regional Manager the Global Consulting
Practicum, Professor of Marketing(adj.), the Wharton School
Chief Medical Officer, The Radiology Leadership Institute and Chair,
Practice Leaders Commission, the American College of Radiology
Copyright: Frank J. Lexa, M.D. M.B.A., 2015
Facing Change: Myths and Reality
Copyright: Frank J. Lexa, M.D. M.B.A., 2015
Definitions
Commodity: Is uniform in quality between
companies that produce/sell it. You cannot tell
the difference between one firm's product and
1
another
Ergo: Lack of Product or Service Differentiation
QED: Traded solely on price
1-http://economics.about.com/od/commodityprices/f/commodity.htm 2-4-12
Copyright: Frank J. Lexa, M.D. M.B.A., 2015
Throwing Down the Gauntlet
We suggest that Medicare immediately expand the current program
nationwide. As soon as possible, Medicare should extend competitive
bidding to medical devices, laboratory tests, radiologic diagnostic
services, and all other commodities.12 Medicare's competitively bid
prices would then be extended to all federal health programs.13 To
oversee the process, we recommend that Medicare establish a panel
of business and academic experts. Finally, we recommend that
exchanges — marketplaces for insurance starting in 2014 — conduct
competitive bidding for these items on behalf of private payers and
state employee plans. N Engl J Med 2012; 367:949-954September 6,
2012DOI: 10.1056/NEJMsb1205901
Authors on next slide
Copyright: Frank J. Lexa, M.D. M.B.A., 2015
Copyright: Frank J. Lexa, M.D. M.B.A., 2015
Throwing Down the Gauntlet
Source:
A Systemic Approach to Containing Health Care Spending
Ezekiel Emanuel, M.D., Ph.D., Neera Tanden, J.D., Stuart Altman, Ph.D.,
Scott Armstrong, M.B.A., Donald Berwick, M.D., M.P.P., François de
Brantes, M.B.A., Maura Calsyn, J.D., Michael Chernew, Ph.D., John
Colmers, M.P.H., David Cutler, Ph.D., Tom Daschle, B.A., Paul Egerman,
B.S., Bob Kocher, M.D., Arnold Milstein, M.D., M.P.H., Emily Oshima Lee,
M.A., John D. Podesta, J.D., Uwe Reinhardt, Ph.D., Meredith Rosenthal,
Ph.D., Joshua Sharfstein, M.D., Stephen Shortell, Ph.D., M.P.H., M.B.A.,
Andrew Stern, B.A., Peter R. Orszag, Ph.D., and Topher Spiro, J.D.
N Engl J Med 2012; 367:949-954September 6, 2012DOI:
10.1056/NEJMsb1205901
Copyright: Frank J. Lexa, M.D. M.B.A., 2015
Page 1
Measuring and Managing for Marketing
Success
Is Radiology already a
Commodity?
•
Do you get paid 50% more to read a case because
you did it with two extra pulse sequences?
•
Do you get paid 3 times as much for a 3T brain MR
versus a 1T?
•
Do you get paid more because you went to highly
ranked medical school or training program?
•
Do you get paid more (or less) to generate a more
detailed report on the condition of the hypothalamus
than your colleagues do
Should Radiology be a
Commodity?
Commodities are often the result of failures:
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Copyright: Frank J. Lexa, M.D. M.B.A., 2015
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Copyright: Frank J. Lexa, M.D. M.B.A., 2015
Is Commoditization Inevitable?
Finca Palmilera
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What is Driving the Perception of
the Commoditization (decreasing value) of
Radiology?
Disruptive Technologies
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Copyright: Frank J. Lexa, M.D. M.B.A., 2015
2012
Technology Forces
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Copyright: Frank J. Lexa, M.D. M.B.A., 2015
Film reader versus consulting physician
Globalization and competition
CT Scanner Progress:
An Analogy to Moore’s Law
http://www.impactscan.org/CThistory.htm
Can anyone read a CT?
CAD
Definition of the Radiologist
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Copyright: Frank J. Lexa, M.D. M.B.A., 2015
Imaging anywhere, anytime, by anyone
Disintermediation
Diffusion and de-professionalization
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1971
Failure of management
Failure of imagination
Failure to innovate
Failure to understand a market
Failure not just of you, but of your competitors
Form of group failure in a marketplace
Faster
Smaller
Cheaper
More diverse
Simpler
Less operator dependent
http://www.dicardiology.com/article/toshiba-releases-640-slice-ct-scanner
Copyright: Frank J. Lexa, M.D. M.B.A., 2015
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Measuring and Managing for Marketing
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MRI Technology Changes
Predictable Technology Changes
• Early superconducting MRI systems
weighed anywhere from 6 to 32 tons
• 1990 GE Signa System- 18,000 pounds
• GE Lunar 0.2 T dedicated arthro system1,800 pounds, 30 square foot, footprint
• Current patents and scientific reports are
discussing designs as small as 10 kgs
Magnetic Resonance Imaging Volume 22, Issue 8, October 2004, Pages 1145-1151
Copyright: Frank J. Lexa, M.D. M.B.A., 2015
Predictable (Inevitable…)
Technology Changes
Copyright: Frank J. Lexa, M.D. M.B.A., 2015
Dis-intermediation of Traditional Imaging Roles
Traditional Value:
Consult, Supervised Imaging, Radiologist Interpretation,
Clinical Management
Disintermediation:
Virtual-PACS and Physical through imaging anywhere
Use of imaging by clinicians without a radiologist
Ultrasound as an extension of the physical exam
Copyright: Frank J. Lexa, M.D. M.B.A., 2015
Copyright: Frank J. Lexa, M.D. M.B.A., 2015
Disruptive Technologies
Copyright: Frank J. Lexa, M.D. M.B.A., 2015
Globalization

International comparisons on service, quality
and salary
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Heightened expectations from ROW
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Unfavorable (for us) cost comparisons
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Invoking the R-word, lessons from 1993
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Direct deflationary pressure - paying the
“China price”-- not just China
Copyright: Frank J. Lexa, M.D. M.B.A., 2015
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Measuring and Managing for Marketing
Success
Global Pricing Comparisons
Things Could Be Worse
http://www.healthbase.com/
Copyright: Frank J. Lexa, M.D. M.B.A., 2015
Copyright: Frank J. Lexa, M.D. M.B.A., 2015
What Could Drive the
De-commoditization (increase the value) of
Radiology?
Formal Structures that Address Value and Volume
ACO’s and related novel forms of practice that
move from volume to value based purchasing
(Maybe)
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Re-thinking the value chain of what we can and
should do
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Innovation
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ACO- Medicare Shared Savings Model-Federal
ACO-Pioneer Model
Private sector ACO
CCO
Comprehensive Primary Care Initiatives
Bundling Contracts
Other forms of at risk contracting
Innovation
Copyright: Frank J. Lexa, M.D. M.B.A., 2015
Innovation
Copyright: Frank J. Lexa, M.D. M.B.A., 2015
ACOs –Important Points
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Focus to date has been on primary care physicians
as the gateway
As a specialist, you can play the field and be as
promiscuous as you want and join several ACOs
(or not)
Can be one-sided: reward if there are savings, but no
penalty for losses or two sided: higher reward, but risk of
loss
Implementation will be incremental. Don’t expect
immediate comprehensive systems
Role of radiologists and their payment/incentives are not
defined externally
ACOs – Bad News
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Copyright: Frank J. Lexa, M.D. M.B.A., 2015
Not cheap to set up- easily over a million dollars, even for
small groups
Key to long term success is on how the bench marks are
set
Will not be able to continue to save the same dollar
indefinitely
Particularly a concern after re-benchmarking or re-basingcomplicated to decide when you should take the savingsthis can lead to perverse decisions in how you implement
cost reductions
Haywood TT and Kosel KC “The ACO model- a three year loss? NEJM 2011e27(1-2)
Harvey et al. “The ephemeral accountable care organization- An unintended consequence of the Medicare Shared
Savings Program, JACR 11(2), 121-124
Copyright: Frank J. Lexa, M.D. M.B.A., 2015
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Measuring and Managing for Marketing
Success
ACOs – Numbers
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Between 500 and 1000 ACOs in the US in various
degrees of development
All 50 States have some ACO coverage (1)
A report from several months ago stated that just over
half were Medicare contractors- SSP (2)
Common types include:
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Small physician group
Hospital-led
Hospital-physician group ACO
Medicaid
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In FY 2012: 29/114 hit targets in SSP
In FY 2013: 64/243 hit targets
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1-http://aharesourcecenter.wordpress.com/tag/how-many-acos-are-there/
2-http://leavittpartners.com/aco-consulting
3-WSJ ObamaCare’s Failing Cost Control The law’s ‘accountable care’ experiment is a bust so far. October 20, 2014
Copyright: Frank J. Lexa, M.D. M.B.A., 2015
The “high value” Radiologist
• A priori involvement in decisions about imaging:
who, when, how, what, etc.
• Service metrics
The Bigger Question
• What will a radiologist look like in 2020?
• Film reader or consulting physician?
• Commoditized technical support in the health care
enterprise or a key player at the table guiding 21st
century medicine
Copyright: Frank J. Lexa, M.D. M.B.A., 2015
The “high value” Radiology Group
• IT backbone for the health enterprise
• Utilization Management – optimize imaging, consultation
• Process and cost improvements
• Screening diagnostics for primary care physicians
(and non MDs)
• Customer satisfaction: patients, referring MDs,
administrators, etc.
• Quality and Service
• Much greater government and public involvement and
oversight
• Disease management
Breslau J. “The Opportunities for Radiology Participation in ACOs” Accountable Care News vol3, #8, August 2012, p. 1
Lexa, FJ and J Berlin “ACOs for neuroradiologists: threats and opportunities” in Socioeconomics of Neuroimaging, edited by David Yousem
Neuroimaging Clinics of North America, August, 2012 volume 22, #3, pp 437-441
Copyright: Frank J. Lexa, M.D. M.B.A., 2015
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Starting points for
decommoditization
Going beyond the read
Expanding the current value chain
Novel types of value
CRM- building stronger bridges to
our customers
Copyright: Frank J. Lexa, M.D. M.B.A., 2015
An Expanded Value Chain for Radiology in the 21st
Century
1.
2.
3.
4.
5.
6.
Copyright: Frank J. Lexa, M.D. M.B.A., 2015
Consultation for appropriate imaging
Equipment and protocol optimization
Personalization of imaging
Clinical consultation with referring
medical professionals
Discussion of results and follow-up with
patients
Promotion of good health and patient
advocacy
Copyright: Frank J. Lexa, M.D. M.B.A., 2015
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Measuring and Managing for Marketing
Success
System Synergies
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More efficient diagnosis
Chronic Disease management
Co-Marketing
Empowering primary care doctors
Increase efficiencies of:
• ICU
• ED
• Surgical suites
• Improve communication and coordination through inpatient
and outpatient experiences
Copyright: Frank J. Lexa, M.D. M.B.A., 2015
The best questions to ask when you are “decommoditizing” something are:
1. Who are the Customers
1.
Referring MDs
2.
Technologist
3.
Hospital and ACO administrators
4.
Patients and family
5.
Payors
6.
Government
300,000,000 Customers: Patient Perspectives on Service and Quality, Frank James Lexa, MD J Am Coll Radiol 2006;3:346-350, 2006
Copyright: Frank J. Lexa, M.D. M.B.A., 2015
Beyond Interpretations
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Assuring Appropriateness
Documenting the Quality and
Patient Safety Radiologists
Provide
Actionable Reporting with
Evidence-based Follow-up
Recommendations
Empowered Patients
C
Courtesy
of ACR
o
u
Copyright: Frank J. Lexa, M.D. M.B.A., 2015
The best questions to ask when you are innovating
are: #2 What do they want?
1.
What do they want?
2.
What could be better?
3.
What shouldn’t we do?
4.
What do you like about our competitors?
5.
What are your concerns?
6.
What would help you do your job?
Copyright: Frank J. Lexa, M.D. M.B.A., 2015
What Radiologists Should Do?
1.
2.
3.
4.
5.
6.
7.
8.
Commoditization is a form of failure and is not
inevitable
Put your patients first
Pay very close attention to ACOs and prepare
to work in them and in related programs
Listen to your customers
Build bridges to health care providers
Use disruptive technology before it disrupts you
Look for novel ways to provide services
Keep innovating and improving
Copyright: Frank J. Lexa, M.D. M.B.A., 2015
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