Managed services: a solution to confront the growing trend of freestanding ERs

The rise of freestanding ERs could mean lower revenues and budgetary challenges for many hospitals. Freeing up funds by utilizing managed services to provide diagnostic imaging departments may save CFOs from sacrificing resources dedicated to critical patient care.

One of the latest trends in health care could likely create challenges to hospital budgets. Freestanding emergency rooms (ERs) are popping up all over the nation, attracting affluent, privately-insured patients to their seemingly more convenient facilities. The exodus of privately-insured patients leaves traditional hospitals to provide more and more costly emergency procedures to those who rely primarily on Medicare and Medicaid and those without any insurance. Due in part to the lower reimbursement rates in these programs, hospital revenues could be squeezed with the drop in privately-insured patient volume. This trend leaves CFOs with the unfortunate but necessary task of balancing quality patient care against these challenging budgetary constraints.

With the rise of freestanding ERs unlikely to be reversed, and patients finding their needs met outside of the traditional hospital corridors, hospital CFOs must prepare for the new financial challenges their emergency departments may face. One solution is to adopt a growing tactic in health care: an imbedded partnership utilizing managed services that includes equipment leasing, maintenance, and professional staffing.

In particular, some hospital CFOs use contract services for the most expensive medical equipment such as radiological, nuclear, and other imaging tools. Previously, hospitals carried the expensive burden of purchasing, maintaining and operating such equipment in-house. Beyond the physical equipment's costs, hospitals also incurred the additional expense of hiring and training technologists to operate the equipment—even when patient volume was low. This is all to obtain and operate a piece of equipment that could be out of date in just a few short years.

As such, these considerations are necessitating an alternative solution to ensure patients can still benefit from the latest in state-of-the-art diagnostic tools and equipment while hospitals adhere to evolving budgetary constraints.

When utilizing a managed service, the operation and maintenance of diagnostic imaging equipment are handled by a third-party at a fraction of the potential cost of an in-house plan. Also, technologists with years of experience in medical imaging are often embedded in the hospital to operate the equipment. Managed services can also offer the option of regularly updated equipment; ensuring patients receive the best technologies for care.

When used appropriately, hospitals with managed service contracts can allocate even more resources toward quality patient care while still operating within the standards of a reasonable budget. At Numed, we see this everyday with our partners. We understand that patient care is always the greatest concern for hospital staff and leadership, and we believe budget allocations should always reflect such a priority.
When it comes to balancing costly diagnostic imaging tests with lower reimbursements and the rise of free-standing ERs, an ambitious budget will be a challenge. Managed services and leasing contracts, such as those provided by Numed, offer solutions to help hospital emergency departments remain competitive. These services lower overhead and offer trained technologist staffing, on-demand equipment service and total department management.

No matter what comes from the rise in freestanding ERs, hospital leaders should certainly consider the cost-saving benefits of leveraging leasing contracts and managed services.

Marc E. Menkemeller is the CEO and President of Numed, Inc., a leading contract nuclear medicine service provider.

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