This is a transcript of my recent podcast interview with Telerays CEO, Dr. Daniel Roubein.
David E. Williams: This is David Williams, co-founder of MedPharma Partners and author of the Health Business Blog. I’m speaking today with Dr. Daniel Roubein. He is the CEO of Telerays. Dr. Roubein, thanks for your time today.
Dr. Daniel Roubein: David, thank you for the opportunity to speak with you. I appreciate the chance to discuss Telerays with you on Health Business Blog.
David: First of all, what’s the concept behind this company Telerays?
Dr. Roubein: Telerays is basically about connecting people. The Telerays platform is designed to enable hospitals and imaging centers to work directly with radiologists, and to give hospitals and imaging centers instant access to quality radiologists from all specialties anywhere in the country, provided those radiologists have met credentialing requirements. Telerays really seeks to level the playing field. We want to make larger facilities able to tap into qualified radiologists from anywhere in the country, and radiologists to have the opportunity to bid on cases they may not know about otherwise, and basically keep both sides of the imaging equation moving, both the hospitals and imaging centers, and the radiologists.
David: I understand that from a high level, but tell me a little about what the actual work flow is like. What happens if I’m a hospital or imaging center, and I want to initiate the bidding process? How does it work for me?
Dr. Roubein: Well, as a hospital or imaging center, you would begin the process by registering on the Telerays website as an interested hospital or imaging center with a certain radiology project that you would you like to have fulfilled. As an example, if you’re a freestanding imaging center, say for instance in Chicago, and you know that in a given month you produce about 100 MRI studies. To begin, you may wish to say the project is only half of those, so that you know you can meet your commitment. Through the Telerays website, you post a project for the interpretation of 50 MRI studies in the month of January of 2009. And you would specify that those are going to be generated between Monday and Friday, between the hours of 8:00 AM and 5:00 PM, and you would like a 24hour turnaround time. So, that’s the project. You have the opportunity as the hospital or imaging center to define the parameters of the radiology interpretation project.
Before the bidding process begins, you would have already had the opportunity to review credentials of radiologists who were interested in bidding on that project. Of course they would have to have appropriate state licensure, medical malpractice coverage, certification by the American Board of Radiology, as well as other credentialing items. And you would admit them to a project bidding process that might occur a month before, or even two months before, depending on what parameters you set. So, in December of 2008, the radiologist who had been admitted would be notified that the auction would occur on December 15th between 7:00 AM and 10:00 PM, or whatever the hospital or imaging center decides is an appropriate timeframe. Those preapproved radiologists then bid on the project, for which the hospital or imaging center set a ceiling, and the low bid wins.
Once the agreement is completed, the hospital or imaging center acquires their images as they would normally. In January of 2009 they’re uploading cases in real time to the Telerays platform. The radiologists are downloading the images, generating a report, uploading a final report to Telerays that’s then downloaded by the imaging center. Once the contract is complete, Telerays is paid by the hospital or imaging center, and then Telerays pays the radiologist.
David: That’s a great explanation. I appreciate that. Let me probe a little bit. Obviously, you are doing a lot to credential the radiologists. And it sounds as though the customer can select a subset of those radiologists that are not just qualified within their state, but perhaps meet other criteria that they have in mind. Once that’s done, though, it sounds like there’s competition that’s just on a price basis. Is that right, and does that feel scary for the radiologist? Is there anything negative about that?
Dr. Roubein: You are correct that price is a basic tenet upon which radiologists will compete for the right to provide the interpretation services, but it’s definitely not the only one. Certainly, a radiologist, and any group of radiologists would have the opportunity to distinguish themselves by virtue of the quality of the interpretations they provide, by demonstration of experience that they have in a particular subspecialty, and/or fellowship training in particular radiology subspecialties. A radiologist or a radiology group that has very efficient, streamlined processes in their own offices might be able to offer a superior turnaround time, so that if it’s known to them that an imaging center is only requesting 24 hours, but they know that they can turn it around in eight or 12, this is important in terms of quality of care and in terms of high level of service, that the imaging center can then return to its referring clinicians.
Another way that a radiologist can compete besides price is in responsiveness to those clinicians. A radiologist who knows that as part of his or her regular service, they’ll pick up the phone and call the referring clinician, not just for a life-threatening emergency, which of course would be expected and is part of normal radiology practice, but also for an important finding, or something that they feel the clinician may want to discuss. This is a very important way to make teleradiology mirror the way that radiology is being practiced right now all over the country and indeed all over the world. And certainly, as I mentioned, in terms of special training that radiologists might have, this is another way that they can compete, beyond just trying to offer the lowest price.
David: You partly answered this question before in answer to the first question. Thinking about customers from a demand standpoint, are they able to predict their needs well enough in advance so that they’re able to use this service? It sounds like what they might do is perhaps bid out a baseline of needs that they know they have and then worry about the swing capacity separately.
Dr. Roubein: Yes, I think, that’s correct, David. The imaging center or the hospital would know with a reasonable degree of certainty by looking at the past twelve months what they expect to generate in a given month. Telerays offers the option of staying well within those parameters. In the example I gave previously, if they know that statistically they’re going to produce 100 MRI studies in a given month, they can feel very safe in posting initially a bidding project for 50 of those cases, after they’ve preselected the radiologists that they want to work with. And once that’s worked well for them and they see more about how the process evolves, they may increase the number of cases or the percentage of their cases that they offer on Telerays until it’s 100%. And then, we would allow some leeway within a fixed percentage, plus or minus 10% of what’s put forward, in order not to place them in a situation where they’re paying for interpretations that they don’t receive.
David: What do you expect to see or what are you seeing in terms of variability in pricing? I know when some of these services get established and these options are done, there can be some dramatically interesting results. I’m just wondering what you’re seeing, or what you expect?
Dr. Roubein: This is a new concept, and we want people to try it, and basically we’ve set our fee at a percentage of the radiologists’ interpretation fee. But, as far as the prices that would actually be charged, Telerays won’t be setting those. Those are going to be driven by what the market will bear, and what the radiologists feel their services are worth. And what the hospitals and/or imaging centers feel the interpretation is worth. So, I believe that the market will work in terms of finally setting what is a fair price for both sides.
David: That sounds good. That is what I’m asking. I’m wondering if you have a sense of how large those price differences might be between what a hospital might be able to get now and what they might get on the system. Or is it just too early to tell?
Dr. Roubein: It may be too early to tell and to speculate about specific numbers, but I believe that we’ll see it level to a point that’s a fair playing field for both sides.
David: Now, another thing. You’ve mentioned the percentage that you take. One interesting thing, that’s a form of kind of price compression as well, in terms of making the market more efficient. I think that you’re taking something like 15% of billings, and that you actually include a billing service as part of that. Some people pay roughly half of that rate just for their billing service, and you’re also offering marketing and technology infrastructure, and so on.
So, how are you able to offer a relatively low commission? What efficiencies are you putting in? How does it compare with what a typical teleradiology service would be?
Dr. Roubein: Well, we’ve basically set our fee at a level that we feel is a fair percentage for the services that you’ve outlined that we’re bringing to the table, in terms of infrastructure, and marketing, and credentialing.
We were able to do it basically by having carefully constructed our business plan, and carefully constructing the website so that it works efficiently, and keeping our overhead low. We’re actually trying to relieve salary compression.
I believe very strongly that the radiologists should be the ones who make the decisions about how much they’re paid per case, as opposed to allowing others to make those decisions and then taking a much smaller percentage of what that global fee is. Our overhead is low, that’s one of the main ways that we’re able to offer a smaller percentage.
David: One of the services that you’re providing is the credentialing, and having different characteristics upon which customers can select the radiologists that go into the bidding pool.
Over time, if you look out ahead three or five or seven years, do you expect there to be a role for radiologists outside of the U.S. and that maybe are not U.S. Board Certified, and that offer good services, but perhaps at a lower fee than what is typical today?
Dr. Roubein: I do not see a role for radiologists who are not certified by the American Board of Radiology. I believe that’s an institution which has served the radiology community, and the medical community and patients very well, in terms of providing one basis upon which a person can make a decision about the qualifications of a given radiologist.
So, I feel very strongly that certification by the American Board of Radiology is a necessity, and we are committed to that. I don’t have speculations about foreign or overseas interpretations. Our focus is on U.S. radiologists who are licensed in the states in which they practice, and are boarded by the American Board of Radiology.
David: One of the things that you emphasize here, but which I’m not sure is unique to this bidding model, is the concept that “You’ll provide final reads, as opposed to preliminary reads.” For those of us who are not radiologists and don’t understand the finer points, can you explain that distinction a little bit and what the value is for the customer?
Dr. Roubein: Yes, David. You are correct that it is not entirely unique for Telerays to provide final interpretations. However, we only provide final interpretations, which is a slight difference from some of the teleradiology companies.
To answer your question about the difference, it’s a very important distinction. The preliminary interpretations are sometimes offered by fellow radiology companies, for instance at night for emergency cases. That requires another radiologist to look at those images the following day or whatever time frame they’ve agreed to, in order to reaccess the case and then issue a final interpretation.
Our opinion, and my personal opinion, is that the qualified radiologist who’s committing to look at an image or a series of images as a Board Certified Radiologist should, can and should be able to issue a final interpretation, which will then obviate the need to have a second radiologist look at it; that’s a point of efficiency.
It doesn’t compromise care, because it’s no different than a radiologist looking at a case at 2:00 PM in the afternoon. So, I believe that it brings the level of quality up, that there’s an expectation that every time you look at a case, you’re going to take full responsibility for that case, and interpret it as final interpretation and stand behind it.
David: What kind of infrastructure do you have in place in order to be able to connect a hospital, presumably to your system, and then to connect on to these various radiologists that are within your panel?
Dr. Roubein: Well, we’ve worked hard to make sure that the backbone of that technology infrastructure is strong, that it’s HIPAA compliant. I’ve made plans to be able to accommodate projected volumes at three months, and six months, and nine months, and one year, and out further than that, in order to be able to tell people with great assurance in a very comfortable fashion that, “We really can support this, and we really have thought it out.” We’ve had the software specifically designed to accomplish this task.
David: Now, I know that you’re very focused on radiology, and so this is an unfair question. I’m interested, whether you think the Telerays concept is applicable to other specialties, either the bidding aspect of it or the remote aspect that would be comparable to Telerays or teleradiology in general?
Dr. Roubein: Well, David I believe that this model is very well fit to the practice of radiology. I do not feel that I can speak authoritatively to whether another medical specialty might feel that it applies to their practice. I think it’s something that has to be evaluated from many different aspects, as I have done over the past several years before deciding that this was viable.
So, I believe that it’s really up to the practitioners of the individual specialties to decide for themselves if they feel that this is a way that they can provide high quality medical care to the patients, because that’s really what this is all about. At the end of the day, it must be that the patient, who comes to the imaging center or to the hospital, gets the best radiology interpretation they can in the shortest period of time.
David: You mentioned hospitals and imaging centers as the customers. Would a radiology group also potentially be a customer? Do they see Telerays as a competitor or an additional source of income for them, or how would they fit into the equation?
Dr. Roubein: Yes, David. Actually, we’ve had inquiries from a number of radiology groups already, because we see this as a method for them to supplement income. If it’s a large group or even a small group of radiologists, who find that they have a certain block of time available to perform teleradiology readings, they are welcome. Some have already pursued credentialing all of the members of their group, to provide teleradiology interpretations through the Telerays platform.
The way that would work is basically, that each of their radiologists is considered an individual radiologist and has to be credentialed separately. The hospital or imaging center would have to approve each one of those radiologists. As long as that is in agreement between both sides, then that group would be allowed to use any of those previously credentialed radiologists to read, say it’s a four hour shift, three times a week, for a specific imaging center, during a specific month.
So, they’re very welcome, and we encourage radiologists groups to participate as a method of gaining new business and offering their services to a wider array of patients and centers. The basic idea behind the Telerays auction is to connect people, and to provide opportunities for radiologists and hospitals and imaging centers to play on a level field, and get the highest quality service for both sides at the most competitive price.
I appreciate the opportunity to put that idea forward, and let that be known about the Telerays company.
David: I’ve been speaking today with Dr. Daniel Roubein, CEO of Telerays. Dr. Roubein thanks for your time today.
Dr. Roubein: David it’s been a pleasure to speak with you. I appreciate you taking your time to discuss Telerays with me.October 28, 2008