Economics of Radiology


Economics of Radiology

Radiology, laboratory, and pharmacy are three important revenue-producing departments in a hospital. These departments help support nonrevenue areas such as administration, personnel, maintenance, and housekeeping.

A radiology department should be operated efficiently and cost effectively. An imaging department is one of the most expensive hospital departments to operate, supply, and equip. In the past, radiographic film constituted the largest supply expenditure in the radiology department. Because film was the main element in this photographic process, film prices were influenced by the silver market, which was especially obvious in 1980, when silver surpassed $40 a troy ounce, and film prices increased by more than 100% from the previous year. Digital imaging has changed this circumstance considerably, and film is not required for imaging in digital radiography.

Certificate of need

Until the early 1970s, the primary concern of both the health care industry and the federal government was to modernize, expand, and purchase new equipment to provide the public with more and better health care. However, during the mid-1970s, the thrust of government and the health care industry changed. The high cost of health care was, in part, the cause of this change. The government responded to public pressure by imposing numerous regulations on hospitals and other health care institutions. Almost all aspects of hospital operations were reached by government regulations. Probably the most far reaching of the regulations was the certificate of need program.

The certificate of need (CON), which is a certificate issued by a review committee to the purchaser after the need for the equipment or expansion has been established, was designed to provide cost containment of the health care industry by regulating major capital expenditures and changes in service. Major capital investments, such as computed tomography (CT) scanners or magnetic resonance imaging (MRI) units, which cost $3 million or more, could not be authorized until the clear need for this expensive equipment had been demonstrated. If hospitals had policed themselves with cost-effective management and needs assessment, many of these regulations would not have been necessary.

Government deregulation trends caused most states to abandon the CON. Currently, the government is working vigorously to develop a plan to meet the health care needs of all citizens; therefore health care will likely undergo many changes in the next decade.

The student radiologic technologist should be aware that economics is as important in radiology as are the other aspects of the profession. Mere technical quality is of little consequence if the cost of the service makes it prohibitive for the patient. In this sense, economics becomes a factor in radiologic quality because quality care means caring for the patient.


The staff of a radiology department represents 3% to 5% of a hospital’s labor force and cost. On the technical side, this staff consists of an administrative technologist, a chief technologist, radiologic technologists, clerical staff, and support staff (e.g., housekeeping personnel, patient transporters). The medical side consists of the radiologists and the chief radiologist (Fig. 16-1).

The personnel required to staff an imaging department depends on departmental systems and procedures. The number and function of these employees are based on the volume and type of procedures performed. Many hospitals compute staffing needs by “productive hours per procedure.” Productive hours are hours actually worked, excluding vacations, holidays, and sick leave. The guideline for all personnel in a radiology department is one productive hour per procedure.

Overstaffing reduces staff use and creates increased labor costs. Having the appropriate staffing level to provide good patient care with high productivity is economically necessary.


The major equipment in a radiology department is the most expensive capital item in a hospital today. Costs range from $30,000 for a high-output mobile unit (i.e., an x-ray machine designed for easy movement for radiographing patients outside of the radiology department) to more than $1 million for a sophisticated CT scanner to even more for a MRI unit (Fig. 16-2

Mar 2, 2016 | Posted by in GENERAL RADIOLOGY | Comments Off on Economics of Radiology
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