In response to my recent blog note about how the services of radiologists are now being auctioned off to the lowest bidder (see: On-Line Auctions for Radiologist Services Offered by Telerays), Ajit Alles submitted this comment:
Of course, I'm sure you realize that this is the best argument against moving to digital pathology.
He was undoubtedly reacting to this comment in the last paragraph of my note:
Obviously, events relating to this new radiology business model are moving quickly. Nighthawk established the successful precedent for these auctions by building a reliable global teleradiology network and solving the accreditation issues. Such a network does not exist at the present time for surgical pathology because of the lack of wide adoption of digital pathology services.
Pathology has a number of important strategic challenges facing it at the present time but absent from the list, in my opinion, is an auction for the diagnostic services of pathologists in distant locations. Below is a series of points supporting such a conclusion:
- Radiology images are digital from the time that they are created; pathology surgical pathology images (stained thin sections) are analog and need to be converted to digital in an extra non-trivial step.
- New imaging procedures in radiology generate large profit margins for hospitals and radiology groups whereas the conversion to a digital pathology department involves substantial capital investment without such a promise. Such a conversion yields mainly quality improvements but little net revenue gain.
- The conversion to digital radiology has essentially now been completed in the U.S. whereas a similar conversion in pathology is only just starting.
- Radiologists promoted and encouraged the growth of the Nighthawk global teleradiology network to provide night and weekend coverage for themselves, thinking that they could protect their local positions by performing an "over-read" (follow-up review) of the teleradiology reports the next day. The Telerays founder is now promoting the fact that their reports are final (see: On-Line Auctions for Radiologist Services Offered by Telerays).
- Virtual Radiologic, an emerging competitor for Nighthawk,is also emphasizing the value of a "final interpretation" by its radiologists with a webinar (see: Measuring Productivity and Your Bottom Line: Incorporating a Final Interpretations Program into Your Operation). By so doing, they are marketing the quality of their radiologist employees. Recall also that radiologists generally report impressions whereas pathologists frequently report diagnoses.
- I do not believe that there exists at the present time a major driver ("killer app") to justify the broad conversion to digital departments and/or a global pathology network. My colleague Ul Balis believes that image search will shortly constitute such an incentive (see: Technologies and Tools to Search Images with Images). However, image search, if and when it becomes a practical reality, will probably constitute more of a a quality enhancement rather than an additional income generator.
- I think that molecular imaging in the next three to five years looms as a greater strategic threat to the practice of surgical pathology than any impending auction of pathologist services that might drive down current pathologist compensation.
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