During the 2017 annual meeting of the Pennsylvania Radiological Society, there were outstanding presentations on machine learning from Dr. Eliot Siegel, innovative models of early detection and improved staging in pancreatic cancer by Dr. Elliot Fishman, and discussion of value by Dr. Richard Duszak. When looking at the potentially transformational jumps in technology discussed, it would also be wise to examine the economic viability of this technology by asking two questions.

1. Who are the customers?
2. Is there a willingness to pay?

Healthcare may be one of the few industries where customers are not the same stakeholders as payers. Assuming these technologies deliver on the promises of improved detection of cancer and more appropriate imaging for customers (i.e. patients), are hospitals going to trade cash, or net income, for this technology?

This economic question is where the concept of value becomes critical. Value is a wedge, a simple machine, used to split costs of the technology from hospitals’ willingness to pay. More value packed into the technology makes the transaction easier. There are a few possible outcomes.

Hospitals that are financially stressed simply will not have the ability to acquire this new technology. They will choose the status quo, which has no impact on their financial statements, and continue outsourcing the interpretation to a group of radiologists.

However, hospitals that are in better financial shape may decide that the new technology gives them a competitive advantage in areas of marketing, quality, or throughput. This competitive advantage will have to add more value than the cost of acquiring the technology PLUS the loss of revenue through less testing and therapy. This business proposition may be difficult for some C-suites.

Finally, if a hospital is taking long term risk on the lives covered, such as our Veterans Health Administration, then the cost side of the value equation becomes much more compelling. A risk-based organization will have an added incentive to adopt new technologies, not only to improve quality and utilization, but also to reduce the costs of caring for the covered lives.   By aligning the customers’ desire for sustainability of wellness with the hospitals’ need for financial sustainability, these new technologies are likely to thrive in select environments.