American diagnostic radiology moves offshore: is this field riding the "Internet wave" into a regulatory abyss?

• Author: Alexander, III, Archie A.

1. INTRODUCTION II. THE SEA CHANGE BEGINS IN MEDICINE A. The Wave of Change Begins with Telecommunications B. Modern Medicine Catches the Wave into the Future III. DIAGNOSTIC RADIOLOGY EXPERIENCES THE WAVE OF CHANGE A. Advances in Digital Technology Drive Teleradiology B. Diagnostic Radiology Goes Global with DICOM C. Teleradiology Use Rises with the Digital Wave D. Costs and Radiology Labor Shortage Promotes Outsourcing 1. The Rising Costs in Imaging Promote Outsourcing 2. Misguided Planning Leads to Shortages of Radiologists 3. Global Staffing Shortages Create a Wave of Change in Practice 4. Outsourcing Models Begin to Shape the Wave of Change IV. BARRIERS IMPEDE THE WAVE OF CHANGE HEADING TOWARD RADIOLOGY A. Professional Guidelines May Form a Barrier B. The Law May Block the Offshore Wave 1. Licensure Schemes Represent a Significant Barrier 2. State Negligence Law May Act as a Barrier a. State Medical Malpractice Law Impacts Teleradiology Readers b. Corporate Negligence Theory May Impede Offshore Reading C. Language Proficiency May Be a Potential Barrier D. Confidentiality Concerns May Raise Barriers to Teleradiology Services V. OFFSHORE READING IS THE WAVE OF THE FUTURE, SO PROMOTE IT VI. CONCLUSION I. INTRODUCTION

   Recent trends in the American workplace are suggesting that outsourcing is becoming more commonplace, and currently no job or its work product may be safe from outsourcing. American blue-collar workers are certainly not surprised by these trends because they have experienced outsourcing related job losses since the early 1970s. (1) Even those white-collar jobs traditionally considered immune to outsourcing pressures, such as those held by medical specialists, are now threatened.

   Most workers know outsourcing as a process whereby a domestic firm transfers some portion of their work product or job to a different firm that resides either onshore in America or offshore in some foreign land. The transferring domestic firm contracts with one of these firms, intending to make that new firm its outside supplier. (2) Although most transferring firms see outsourcing as a positive business experience, some work transfers have both intended and unintended consequences. Some transfers may produce a net loss of jobs within the affected sector. Others may create a downward pressure on wage earnings of the affected worker, especially in labor-intensive areas, such as those in manufacturing. In still others, workers may even experience personal stresses, such as increased anxiety or fear that are related to their worries over impending or future job losses. These personal stressors may also place an additional burden on affected workers by compelling them to make fewer demands on their managers. Some workers may come to believe that issuing fewer demands will translate into a greater likelihood that they will keep their jobs. Unfortunately, their beliefs may be misguided. (3)

   Over the past three years, outsourcing may have removed nearly a half million jobs from the American economy. Some experts say that if this trend holds true, then nearly 3.3 million jobs will be erased by 2015. (4) Anyone who doubts the impact of outsourcing on the American workforce need only ask Lou Dobbs, the author of Exporting America, and the current host of the CNN programs Moneyline and Lou Dobbs Tonight, for his opinion. Dobbs leaves no doubts when he tells Americans that "America is going wrong" when it exports jobs to foreign markets, such as China and India. (5) Others, however, say that Dobbs has got it all wrong because outsourcing has actually expanded the American economy through both job creation and elimination. (6) Clearly, strong differences of opinion do exist over what the true utility of outsourcing means to the American economy.

   Now, American white-collar workers are watching their once safe, well-paying domestic jobs go elsewhere. Some economists are understandably apprehensive over the movement of white-collar jobs offshore because they believe white-collar jobs are generally associated with high levels of pay. Some economists, however, are less concerned because they believe these jobs really do not come from the "high-value-added sector" of our economy. (7) Still others see outsourcing as one of "creative destruction," whereby the workers loose their jobs, which in turn leads to a loss of their health care benefits. Ultimately, workers may receive a double whammy, where they are initially hit by a job loss, which is then coupled with the costs of finding a new job. Even if these workers do find a new job, they often experience a comitant reduction in pay. As one analyst aptly points out, any wealth generation arising from outsourcing is usually divided among the foreign outsourcing market, consumers, and shareholders of the affected companies. (8) Ultimately, the true beneficiaries of outsourcing are the unaffected consumers and shareholders of the firms doing the outsourcing, not the workers who have lost their jobs. (9)

   The good news for American white-collar workers comes for those in the fields of research and development or personal care services. Jobs in these areas may be less susceptible to outsourcing pressures than those in manufacturing. This news, however, arrives with the caveat that the nature of the work product must be tied to a group of local consumers. (10) This means that any movement of a task away from such a community of willing consumers will necessarily translate into a net loss of market share. Unfortunately, there is plenty of bad news awaiting those workers in the white-collar sectors who produce a work product that relies on the process and repeatability of a given task. White-collar workers performing these types of jobs may see ongoing losses because these jobs do not require a high level of skill; thus, they may be outsourced to either onshore or offshore firms. Thus, jobs are susceptible to outsourcing based on the nature of the work itself, where repetitive tasks, which are easily learned and require low levels of skill, lend themselves to task standardization. Task standardization, in turn, allows low skill level workers, who may already occupy a particular sector of a different workforce, to easily master the task. (11)

   Currently, firms are outsourcing their work to both onshore and offshore firms because global communication costs are dropping, and computer software is becoming more standardized and readily available. (12) More importantly, the Internet has become a readily available transmission source that is accessible to outsourcing firms, who wish to reach out and touch someone anywhere in the world. Thus, task standardization couples with the global reach of the Internet to create an opportunity for participating firms to outsource their goods and services into the global market place. Now, firms may seek to exercise their comparative advantage over competing firms by utilizing the expanded reach of the Internet to outsource. (13)

   Unfortunately, the really depressing news comes for American workers in customer service, telemarketing, document management, tax preparation, financial services, and medical transcription services, where jobs in those sectors, which are traditionally white-collar ones, are likely to be lost to outsourcing pressures over an ever-increasing scale. (14) Based on current practices, one might conclude that almost any work product that can be digitized and downloaded into a computer for transmission through the Internet can be outsourced. (15) Maybe the former head of Hewlett-Packard, Carley Fiorina, got it right when she told Congress, in her now infamous line, that "there is no job that is America's God-given right anymore." (16) Perhaps Congress and Lou Dobbs did not appreciate her message, but the truth is firms will always seek to gain a comparative advantage over their competitors, and they will keep on outsourcing as long as it reduces their costs and boosts their profits. (17) Yes, outsourcing activities will likely increase over the next decade, but they may not be the "tsunami that many claim." (18) Yes, even the highly technical and lucrative professional jobs associated with the field of medicine, once considered oriented and anchored to a local community, may be swept to distant shores. (19)

   Perhaps the best way to understand the outsourcing dynamic taking place in highly specialized areas of medicine, such as diagnostic radiology, is to think of a person who suddenly sees a tsunami wave for the first time. Imagine, a radiologist standing on a beach front somewhere in the Pacific Northwest gazing westward toward Asia and thinking about the outsourcing of radiology images that is currently taking place in her discipline. Now, suppose this radiologist has no clue that the shoreline she is standing on faces the Cascadian Subduction Zone, which is also a tsunami zone. (20) Suddenly, without warning, an undersea earthquake occurs far offshore within this zone. The force of the quake elevates the seabed, which creates a tiny, almost imperceptible, ripple on the surface of the ocean. This sea change may be no different than the outsource events currently taking place in diagnostic radiology, where teleradiology and Interact services are enabling health care providers to shift radiology workloads to both onshore and offshore sites, with some offshore sites residing in distant countries, such as India and Australia. Because both events are almost imperceptible, she may not appreciate either event until she notices a sea change, as both her California tide and the teleradiology services suddenly start shitting both her water and work westward. She may show no concern at first, believing that she is safe, because all are gaining momentum. She may even believe that her positions, both on the beach and at her workplace are safe and secure, even though the pace at which events are changing is ever increasing. Suddenly, without warning...