Teleradiology - a small business having a big impact
publication date: Nov 22, 2009
Teleradiology, where radiologists interpret images from medical scanners in a remote centre is beginning to have a big impact in Germany, as well as the UK and the Nordic region. The technology has the potential to hugely increase radiologist productivity – in the USA radiologists routinely interpret 20-25 images an hour at operator Virtual Radiologic.
It has a tiny marketshare in Europe, probably sub 1%, but it is already having a big and negative impact on private radiology centres, particularly in Germany. Until recently in Germany, and, also, I suspect, the Nordic region there has been a strong move for small and medium sized hospitals to outsource their radiology function to the local private radiology centre, which handles all the local outpatient work.
The main reason for this is the lack of radiologists willing to work in hospitals. The drawback of hospital work are those long nightshifts and this has made it increasingly hard for hospitals to recruit and retain staff and has made outsourcing to a local private centre look increasingly attractive.
Now new teleradiology players are stepping into the gap. In Germany, Diagnostic Network and Image Services are offering night time, holiday and weekend cover. Matzko says: “Teleradiology gets round the nightshift problem and provides a cheap solution. I know hospitals which had outsourced and are now bringing the service back in-house, because they were paying €120-200 for a CT scan and teleradiology can reduce that to €55. Pay for hospital radiologists is not so bad and it can offer more variety than life in an outpatient centre. Take away the need to work nights and suddenly it looks quite appealing.”
It is early days yet. Diagnostic Network has 50 hospital customers and Image Services has 20. Both are gearing up to address the wider market – there are after all 2,300 hospitals in Germany!
But note that Markus Henkel, managing director at the Berufs Verband der Deutsche Radiologen, the trade association for German radiologists is aware of the trend for hospitals to replace outsourcing with insourcing and the way that, teleradiology, by getting rid of those 1-in-4s, is changing the dynamic.
The change comes at a bad time for private outpatient radiology centres which, in southern Germany, have seen a 30% fall in prices in the last four years. Couple that to the loss of hospital contracts, and the situation looks bleak indeed. Henkel reckons that any small practice in the south with 2-3 radiologists simply will not be able to pay for the next generation of machines.
The move to teleradiology is bigger in the UK and the Nordics where 80 hospitals are outsourcing to the Barcelona Telemedicine Clinic. Alliance Medical has also run teleradiology projects for the UK government outsourcing to South Africa and Belgium.
Of course European governments have tried to put all sorts of brakes on teleradiology. German, French and Swiss images can not be interpreted outside of the country. In Germany you can not do teleradiology if the distance is more than 45 minutes, unless you have cover. And using teleradiology for elective radiology is also verboten. As one source put it: “The danger is that if we start dismantling this protection then all the business will go to India.”
But in a sense none of this matters that much. In the USA Virtual Teleradiology makes 98% of its sales doing overnight accident and emergency work – the very area which is not banned under German rules.
It has a tiny marketshare in Europe, probably sub 1%, but it is already having a big and negative impact on private radiology centres, particularly in Germany. Until recently in Germany, and, also, I suspect, the Nordic region there has been a strong move for small and medium sized hospitals to outsource their radiology function to the local private radiology centre, which handles all the local outpatient work.
The main reason for this is the lack of radiologists willing to work in hospitals. The drawback of hospital work are those long nightshifts and this has made it increasingly hard for hospitals to recruit and retain staff and has made outsourcing to a local private centre look increasingly attractive.
Now new teleradiology players are stepping into the gap. In Germany, Diagnostic Network and Image Services are offering night time, holiday and weekend cover. Matzko says: “Teleradiology gets round the nightshift problem and provides a cheap solution. I know hospitals which had outsourced and are now bringing the service back in-house, because they were paying €120-200 for a CT scan and teleradiology can reduce that to €55. Pay for hospital radiologists is not so bad and it can offer more variety than life in an outpatient centre. Take away the need to work nights and suddenly it looks quite appealing.”
It is early days yet. Diagnostic Network has 50 hospital customers and Image Services has 20. Both are gearing up to address the wider market – there are after all 2,300 hospitals in Germany!
But note that Markus Henkel, managing director at the Berufs Verband der Deutsche Radiologen, the trade association for German radiologists is aware of the trend for hospitals to replace outsourcing with insourcing and the way that, teleradiology, by getting rid of those 1-in-4s, is changing the dynamic.
The change comes at a bad time for private outpatient radiology centres which, in southern Germany, have seen a 30% fall in prices in the last four years. Couple that to the loss of hospital contracts, and the situation looks bleak indeed. Henkel reckons that any small practice in the south with 2-3 radiologists simply will not be able to pay for the next generation of machines.
The move to teleradiology is bigger in the UK and the Nordics where 80 hospitals are outsourcing to the Barcelona Telemedicine Clinic. Alliance Medical has also run teleradiology projects for the UK government outsourcing to South Africa and Belgium.
Of course European governments have tried to put all sorts of brakes on teleradiology. German, French and Swiss images can not be interpreted outside of the country. In Germany you can not do teleradiology if the distance is more than 45 minutes, unless you have cover. And using teleradiology for elective radiology is also verboten. As one source put it: “The danger is that if we start dismantling this protection then all the business will go to India.”
But in a sense none of this matters that much. In the USA Virtual Teleradiology makes 98% of its sales doing overnight accident and emergency work – the very area which is not banned under German rules.