21 Sep 2022

Gaps in radiology capacity funnels funds into private pockets, doctors say

5:05 pm on 21 September 2022
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Doctors say gaping gaps in radiology funding and equipment are delaying healthcare and funnelling health system funds into private pockets. Photo: 123RF

This is the fourth in an RNZ series about the growing pressures, profits and waiting lists in the fraught field of radiology, the jammed bottleneck that most patients must pass through.

Doctors desperate to make public hospitals better are despairing over the state of radiology.

Some think things have got so bad, the only fix may be to privatise further.

The two sectors, public and private, are joined at the hip in this country - but are chalk and cheese.

A market analyst's recent advice on the jockeying going on among investors in the scanning sector was: "We maintain our overweight rating and expect further upside."

On the public flipside, a hospital oncologist in an email to the Southern District Health Board leaked to RNZ last year said: "Patients suffer and die due to the poor access our population has to imaging services."

Dr Lyndell Kelly went one step further by speaking up and standing up, to get a seat on the Southern DHB in 2019, for that very reason.

"I stood for the board because of my frustration, largely, with delays getting imaging for people with serious health problems like cancer," she told RNZ.

"One lady even had her cancer grow through her anterior abdominal wall because of the delay in diagnosis.

"Four visits to ED before she got a CT scan.

"She died very quickly," Kelly said.

While on the DHB until July this year, she succeeded in getting Dunedin Hospital a second MRI machine and a second CT scanner - though for 120,000 people, it should have seven CTs, not two, Kelly said.

She found it tough on the board, and she was used to tough - she was an expert visitor to Pakistan for the International Atomic Energy Commission.

She moved here in 2006 from Australia where radiology was increasingly going private, and quick scans were easy to get. "Clinics were taking over from service stations on every corner."

'Backed into a corner'

By contrast, in Dunedin she had encountered waits of months for scans, and at one stage doctors resorted to sending patients for a PET/CT scan to get around the longer queues for more basic CT scans.

She admitted now to feeling that New Zealand's underfunded system had betrayed the public trust.

"It's embarrassing as an advocate for public services," Kelly said.

"It's just being left to happen, and the companies can see it happening and they're saying, 'Great, let's get on to it'."

Overwhelmed, public radiology departments with long waiting lists were paying private providers more and more to do scans - usually the simplest ones, which are also the ones that provide the most straightforward profits.

Kelly said the outsourcing had helped a lot of patients - but at the cost of draining a lot from hospital budgets.

"The [contract] negotiations are pretty one-sided when the public services are so poor. They're backed into a corner," Kelly said.

"They're forking out this money in a panic-stricken way."

Private radiologist companies told RNZ they can and do do scans outsourced to them more cheaply than if the hospital did them.

But various radiologists pointed out that hospitals took on the trickier scans, and must support the much wider health eco-system that provided, for instance, the emergency backup for private patients when things went wrong, and for the training of registrars and technicians.

Kelly spoke of chronic public health system woes: Under-funding, poor or non-existent planning, and at the Southern DHB in particular at one time, mismanagement costing them four good radiologists who quit - "HR can be difficult to live with".

"It's desperate measures," she said.

"Outsourcing has always been desperate measures until it becomes normal.

"I think in our DHB it's pretty normal now."

Pulmonary Tuberculosis ( TB )  :  Chest x-ray show alveolar infiltration at both lung due to mycobacterium tuberculosis infection

Photo: 123RF

'Plundering staff'

The public-private boundary was blurred in other ways.

Perhaps three-quarters of public hospital radiologists already work part time in private providers. Some hold shares in them.

It is a flawed system that invites being gamed - and some told RNZ it is being gamed, for instance, to funnel outpatient work to private practice. It is a sensitive subject: people refuse to be named.

The radiologists and surgeons who now rub shoulders as directors or shareholders in various scanning companies, both assert they declare and manage any conflicts of interest. Nevertheless, tensions - like the competitive pressures - are building.

One Wellington radiologist told a review back in 2017 that: "Increased outsourcing of easier scans will lead to a stronger private system in the long run, a weaker public system, and a more expensive health care model."

Like so many other reviews at public hospitals, that 2017 review failed to reverse the growing crisis in radiology, centred on having too few radiologists and imaging technicians to go around.

"The issue is not so much one of knowing what to do, but the way the DHBs work together to make it happen," it said.

Fast forward five years, and medical imaging technicians told RNZ how disheartening it was to keep training up new people, only for them to go private.

"They are plundering staff from public to work in these practices and then they benefit from outsourcing from the hospitals as they have no staff," said one, by email.

A consultant radiologist emailed RNZ: "It all depends on whether you think that New Zealand citizens deserve a good healthcare system free at the point of access based on clinical need or a healthcare system which is only available to the citizens who are able to afford it."

The privateers have defended their corner, stressing they have always had initiatives to help train or upskill doctors, and are starting new ones, are regularly the first to invest in the best new machines, and that they support national screening programmes even though the margins on that work are low.

Everyone points to the obvious difference, though: Private can turn people away if staff are overloaded; in public, they keep piling up.

"Often the patients that we will outsource to the private providers will be those who are straightforward, have generally simple cancers to treat," radiation oncologist Dr Sean Costello said.

It was well and right that private practices encouraged their doctors to also work in public hospitals, but Costello cautioned: "If ... half of your workforce spends half of its time working in private, there's a clear deficit in the public system.

"And it's worth noting at the moment, the public system provides the bulk of the training."

'Double-edged sword'

Richer private pickings make for a very uneven ride for the government trying to balance budgets that face a seemingly bottomless hole of health funding as people age, and demand not just cutting-edge drugs, but the latest scans.

With the market value of diagnostic imaging services forecast to top $800b globally in 2031, there is plenty of investor money around, all of it seeking a return and pouring into new tech, especially artificial intelligence, where radiology is the health sector's frontrunner.

But those tides run against any government trying to keep up.

"The cost of pegging it back and making it public again, it's enormous," said Lyndell Kelly.

"It means the public has to provide a service that's up to the same quantity and quality. I don't see how that's going to happen.

"But also, I was in Australia for a long time. So I saw how it could work, the public-private combination."

Others who spoke to RNZ were not enamoured of the Australian system, questioning the quality and comprehensiveness of scans compared to here.

health medical image of an mri of the head showing the brain. Magnetic resonance image.

Photo: Stefano Garau

Another radiation oncologist, Dr Melissa James at Christchurch Hospital, said the rising tide of private investment gave the government an out it should not have.

She referred to the fact that two of the three radiation machines installed in New Zealand up to 2019 were in private practices.

"So private - thankfully - has been able to take some capacity or else we would have fallen apart.

"But it also takes, I guess, the foot off the accelerator for the government, because they would have needed to put those in public, but now they haven't.

"That private-public mix is a real double-edged sword."

It was the public side that trained registrars, did research, and did "all those things that you don't get a dollar amount for doing", James said.

"And so we need a really strong public system to be able to support the private system, because at the end of the day, we're training now for public and private."

Other sector participants noted the same dynamics at play for operating theatres.

'Radical investment'

Te Whatu Ora Health NZ promised a single national approach to delivering services, including radiology, but has not said how.

Phasing and plans for radiology were "in the early work programme", it said.

There are various alternatives.

In Britain, The NHS is aiming to perhaps double the amount of scanning by relying on opening many more public-owned community hubs outside of hospitals.

This fell under a "radical investment and reform of diagnostic services" flagged by the National Health Service in a 2020 report coloured by Covid-19.

Research showed such hubs outside hospitals lowered costs while allowing more scans, which when necessary and properly done, could cut down the likes of surgery failures - say, for a knee replacement - resulting in radiology costs going up but overall healthcare costs going down.

New Zealand lacked such community hubs, though Canterbury DHB had led the way developing them under an executive team that was routed two years ago.

Health NZ is about to outline its priorities in a new interim health plan.

Asked by RNZ what reports on radiology had gone into preparing the plan, HNZ said none.

The plan "does not specify volumes of services or activity", it said.

Information on scanning outsourcing, for instance, "was never sourced or collated" for the interim plan.

Its latest data on waiting lists showed 63 percent of MRI patients being scanned within six weeks, and 76 percent of CT patients, against targets of 90 percent (MRI) and 95 percent (CT).

However, it did not collect waiting list data for X-rays, ultrasound or PET-CT.

HNZ did not say why not.

A lot of information was "not collated at a national level", it said.

All was not rosy either, at the single largest scanning funder that private providers rely on, ACC.

It paid out $170m-plus or so from public levies for low-tech and high-tech scans in the last year.

One sector view was that ACC had skewed the public health sector with its funding for years - but that if ACC could, say, fund public community hubs, that might really shake things up.

A review of ACC scanning funding released to RNZ said independent consultants were "amazed to discover" that:

  • there was "no clearly defined pathway for patients" to get a high-tech scan through ACC
  • the ACC contract requirements "can impede good patient outcomes"
  • it questioned whether ACC was "best placed to determine contract measures"

'I want the patient to get what they need'

The public-and-private radiology systems are joined at the hip in many ways, at hospital level, at ACC level, and by patients who must navigate the fraught straits between the two - but it is a forced marriage of unequals.

"There is generally little cooperation or coordination between public and private providers," the Royal Australian and New Zealand College of Radiologists told the Health and Disability review in the lead-up to the current reforms.

"Coordination is lacking, resulting in fragmentation in patient care."

Greater integration could boost "equitable healthcare provision across the entire country", by focusing on their respective strengths, it said.

The 2017 Wellington review pointed to ways to do this: such as, a divvying up of routine scans to private and acute to public - which is happening; and using teleradiology to scan in one place, and scrutinise the image in another - again, this already happens more and more, even between countries.

For Lyndell Kelly, it was a cause for despair, and hope.

Change could not be stopped, but it desperately needed managing, she said.

"I see it swinging more and more towards outsourcing."

Private providers had flexibility to buy a building and fit it out, public hospitals did not.

"Because if they were to upgrade their own services, then they've got to acquire the property. They've got to acquire the machines. They've got to acquire the staff, all the while continuing the current outsourcing service.

"And now this is a cultural problem. When staff have no hope of getting a timely investigation, they're not going to push, they stop pushing, they get fatigued.

"And the patients suffer because of it.

"What's the answer?" asked Kelly, "I want the patient to get what they need," she said.

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