Chesapeake Medical Imaging: Meet SR’s First All-Outpatient Radiology Practice

How do you take one third of the reimbursement and maintain profitability—or at least break-even so you can keep your doors open? The only way is through increasing efficiencies without compromising the patient experience because at the end of the day, that is who we are doing it for, and they still need to feel the love.

Mark Baganz, MD
President, Chesapeake Medical Imaging
May 27, 2020

Chesapeake Medical Imaging (CMI) is a product of the 21st century, founded in 2001 by a radiologist who craved a deeper connection with the patient. A refugee from academic medicine, Mark Baganz, MD, bought a magnet from Marconi (now Phillips), hung out a shingle, and hit the streets, knocking on doors to connect with referrers in Annapolis. Now numbering  12 radiologists and 13 outpatient sites, CMI joined Strategic Radiology in April of this year.

Having weathered sustained reimbursement cuts, consolidation on the hospital front, and now facing the mother of all outpatient imaging challenges, Covid-19 (see Reopening Outpatient Imaging), CMI has maintained an unwavering commitment to quality, excellence, and patient-centered radiology. “The service model caught on and ended up being more successful than I imagined,” Dr. Baganz, CEO and president, CMI, said.

That service ethic began to germinate while Dr. Baganz was still in residency at Howard University. “I had been in academic radiology following training for five or six years and had junior leadership positions in both the residency program and running an MRI center at Howard University,” said Dr. Baganz. “The beauty of academic medicine is the teaching, discussion, camaraderie, and collegiality between referring physicians, with the trainees asking hard questions and keeping you on your toes. It’s a fabulous place to get health care and spend professional time.”

Nonetheless, he began to chafe under the yoke of working within a large organization, and ultimately, could not get beyond what he characterized as the impersonal nature of the patient encounter.  “An MRI or any other medical procedure is a frightening experience for many people, and bigger institutions have trouble acknowledging that and connecting to the patient with kindness and love,” Baganz continued.  “Individuals in the organization can but the organization itself can’t.”

A Service Ethic Is Born

That frustration was the catalyst behind CMI’s first imaging center in Annapolis, Md., and the finely tuned service ethic on which it all turns. “Within any high-end medical community, quality is not the variable, service is,” Dr. Baganz said. “We were able to deliver high quality imaging with a patient-centric approach. Likewise, service to the referring doctors was very important. That was the vision that got us started, and in the first few years, we were able to catapult forward and grow.”

From the beginning, the practice was subspecialized, with MR accounting for the majority of studies. MRI still represents one half of the volume, with CT, PET-CT, ultrasound, and women’s imaging comprising the other half.  “We are fortunate in that we are small enough that we can still control the patient and the referring physician experience without making it a commodity or corporatizing the experience,” he said. “We can still know what the referring physicians and the patients get, so it really ends up being a high-touch, high-service experience that we can deliver with a great deal of consistency. This is something that large organizations struggle with.”

It is possible for large organizations to execute superior service models, he acknowledged, citing Ritz Carlton. “Ritz Carlton is a huge organization that delivers an experience that is superior,” he said. “We think along those lines. “

CMI invests in its people, taking the time to hire the best staff, paying them more than average, and providing adequate training. “It is not really just about paying more for staff, it is about training them,” he said.  “We try not to overuse it, but the word love turns out to be a really important part of our culture. Love for what you do, love for your patients, love for a palpable sense of communicating with people. Hiring is what we’ve been able to do better, and at the end of the day, once you hire great people then you end up delivering a great experience.

Finding Efficiencies

The reimbursement environment was much kinder toward outpatient imaging when CMI was founded in 2001. Dr Baganz said that reimbursement per patient encounter has dwindled to less than one-half of its 2001 rate in actual dollars; with inflation factored in, it is one-third. “How do you take one third of the reimbursement and maintain profitability—or at least break-even so you can keep your doors open?” he asked. “The only way is through increasing efficiencies without compromising the patient experience because at the end of the day, that is who we are doing it for, and they still need to feel the love.” 

You can’t just turn up the volume on throughput, he said. “Table time is important, but what is more important is the empty table time between patients,” he said. “We’ve been able to increase throughput not by increasing the speed of an exam, but by increasing the speed of the turnover between exams so that the patient doesn’t feel that pressure of increased speed. What used to be a breakeven for an MRI scanner of 5 or 6 a day, becomes 14 or 15 a day on a scanner.  That gets harder to do unless you have the referral patterns.”

Local market forces are also challenging. “Our biggest barrier to maintaining a status quo that is profitable is consolidation of employment in big hospital systems as a means of capturing ancillary services and prohibiting outside referrals,” he said. Another challenge is preauthorization by insurance companies under the guise of quality but with the intent of limiting access.”

SR: Expanding the Echo Chamber

In joining SR, CMI seeks to widen its network and perhaps regain some of the collegiality Dr. Baganz recalls from his early career in academia. When he launched CMI it was a solo practice and he had the good fortune of finding a mentor and advisor in a local orthopedic surgeon, Marshall Steele, MD, leader of a 12-physician practice.

Steele appreciated the service aspect of what CMI was doing but advised against staying in a silo and spending too much time as a one or two radiologist practice. “He said, ‘You really need a collaborative structure and to grow enough so that you at least have colleagues of like training and mind to work things through and consult with,’” recalled Dr. Baganz. “He was right, and the decision to join Strategic Radiology is an outgrowth of that advice.”

Aligning with radiologists who hold the belief that radiology has a future that is bright and doesn’t have to be a part of a corporate structure was also part of that decision. “We are central to a lot that goes on in medicine, and if we can do our jobs and maintain professional independence, it might be better not just for radiology but for medicine as a whole,” he conjectured.

CMI understood that SR’s group purchasing opportunities could make the membership fees budget neutral, but Dr Baganz insists that joining SR was not a financial decision for CMI. “it is a professional, collaborative decision,” he said. “Knowing that we could be part of a larger group is really exciting.”

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