Cardiology practices increase diagnostics revenue using “DSOs ”

As overhead costs have become a deepening concern, significant inefficiency is often recognized within the in-office diagnostic components of medical practices. Diagnostics service organizations (DSOs) which use best practices and economies of scale to optimize the efficiency standards of in-office diagnostics such as nuclear labs will continue to increase their U.S. market share over the next few years, according to a recent report by Choice Health Care Partners (CHCP), a national physician practice advisory group. DSOs are being rapidly retained by practices and hospitals to cut costs and assist in increasing diagnostic testing profitability as reimbursement continues to decline. Typically [DSOs] such as those aimed at Nuclear Cardiology assume the responsibilities of an office’s existing nuclear lab – such as technologist payroll, isotope costs, physicist(s) services, camera maintenance fees, and licensing – all at a greatly reduced flat per test fee. These types of “in-sourcing” models assure practices that there diagnostic labs operate at the best possible standards and operating efficiencies.

The report by (CHCP)–which offers a growth forecast for each market–found that as practices and facilities remain under pressure to cut costs and as reimbursement cuts impact profits, facilities are moving away from traditional past structures in favor of DSOs which can add up to 40 percent to testing revenues. “Not only can a quality DSO dramatically improve a practice’s profitability and overall bottom line, but the added convenience of having a trusted source can be directly responsible for dealing with the many tedious, ongoing details (personnel, regulatory and otherwise) of the nuclear lab…are priceless,” says Avi E. Soffer, CEO of Simplified Imaging Solutions, one of the nation’s leading diagnostics service organizations. “The days of practices overpaying for anything associated with the conduction of diagnostic services end here and now,” urges Soffer.

The CHCP report also suggests that in addition to projected growth, this market will also witness further consolidation as bigger DSO’s, such as University, will continue to complete acquisitions of complementary organizations such as nuclear camera service companies, and add other modalities such as PET, Echo and EECP — in order to offer comprehensive diagnostics options for clientele. Soffer feels that DSOs should feel a tremendous sense of responsibility and obligation in providing cost cutting assistance to physician practices nationwide, summarizing that, “There is no question of the need for solutions to the issues practices are facing, and that DSOs are the answer. It is now a matter of that need being served, swiftly, efficiently and professionally – while maintaining the practice and their patients as top priority.”