Radiology's value chain

• Published in: Radiology Vol. 263; no. 1; pp. 243 - 252
• Main Author: Enzmann, Dieter R
• Format: Journal Article
• Language: English
• Published: United States 01-04-2012
• Subjects: Decision Making; Efficiency, Organizational; Forecasting; Health Care Reform; Humans; Models, Organizational; Organizational Culture; Organizational Innovation; Organizational Objectives; Practice Management, Medical - organization & administration; Radiology - economics; Radiology - trends
• ISSN: 0033-8419; 1527-1315
• DOI: 10.1148/radiol.12110227

A diagnostic radiology value chain is constructed to define its main components, all of which are vulnerable to change, because digitization has caused disaggregation of the chain. Some components afford opportunities to improve productivity, some add value, while some face outsourcing to lower labor cost and to information technology substitutes, raising commoditization risks. Digital image information, because it can be competitive at smaller economies of scale, allows faster, differential rates of technological innovation of components, initiating a centralization-to-decentralization technology trend. Digitization, having triggered disaggregation of radiology's professional service model, may soon usher in an information business model. This means moving from a mind-set of "reading images" to an orientation of creating and organizing information for greater accuracy, faster speed, and lower cost in medical decision making. Information businesses view value chain investments differently than do small professional services. In the former model, producing a better business product will extend image interpretation beyond a radiologist's personal fund of knowledge to encompass expanding external imaging databases. A follow-on expansion with integration of image and molecular information into a report will offer new value in medical decision making. Improved interpretation plus new integration will enrich and diversify radiology's key service products, the report and consultation. A more robust, information-rich report derived from a "systems" and "computational" radiology approach will be facilitated by a transition from a professional service to an information business. Under health care reform, radiology will transition its emphasis from volume to greater value. Radiology's future brightens with the adoption of a philosophy of offering information rather than "reads" for decision making. Staunchly defending the status quo via turf wars is unlikely to constitute a forward-looking, competitive strategy.