Teleradiology is becoming increasingly accepted and adopted across the globe as demand for diagnostics rises. David Gibson, senior associate in the health team at McDermott Will & Emery UK LLP looks at the latest trends and the key considerations for investors and providers as they collaborate and invest in this fast-growing market
Teleradiology continues to attract significant interest from healthcare providers and investors alike. A recent report predicts that the worldwide market, currently worth $2.44bn in 2022, will be worth $6.28bn by 2030.
Teleradiology involves transmission of patients’ radiological images (such as CT scans and X-rays) between different locations for primary reports, expert second opinions or clinical reviews. These locations can be within the same organisation or between different organisations and increasingly across international boundaries. At the same time, there has been a significant increase in investment in technology in radiology. According to the US Food and Drug Administration, by October 2022 approximately 75% of AI software approved as a medical device was radiology software.
Below, we consider recent trends and some of the key legal and regulatory issues in cross-border teleradiology collaborations and those embarking on acquisitions in this sector.
Teleradiology services are seen as an efficient and cost-effective solution that give healthcare commissioners and providers access to expert specialist and general clinical radiologists who can deliver timely scan reports (on a 24/7 basis); collaborate with referring clinicians; provide sub-specialist advice; and give second opinions. Given the acute international shortage of radiologists, the exponential increase in demand for scans and improved patient access to scanners, teleradiology has the potential to make a significant difference in healthcare delivery worldwide.
While rates of teleradiology commissioning are currently highest in the US, UK and Germany, there is increasing international uptake, with accelerated growth in Asia Pacific. Recent transactions and collaborations have established and consolidated global and regional teleradiology hubs, while AI tools are progressively being employed to support teleradiology service delivery.
“There is growing acceptance of and access to teleradiology around the world,”
and regulations are developing (notably in Asia) in a manner that will encourage its uptake. Investors and those embarking on collaborations in this sector, will want to review some important legal and regulatory considerations for diligence in their cross-border teleradiology transactions.
Market access and revenue
The first considerations for providers are how to access different markets of interest and, critically, how they will be reimbursed. Typically, teleradiology providers contract with hospitals and healthcare providers setting their own pricing. In some countries, there are national government frameworks, which set pricing parameters. In England, for example, NHS providers have access to NHS frameworks for the outsourcing of radiological services under call-off contracts that require remote service providers to comply with regulation, best practice and technical requirements. Given the shortage of radiologists, a key concern for teleradiology providers is continued access to qualified radiologists and the impact of staff shortages on pricing structures. Many teleradiology companies report that remote environments may favour recruitment of retired and part-time radiologists, meaning their models may be more flexibly priced and recruited.
Where they exist, teleradiology regulations are evolving and remain jurisdiction specific. Some require remote providers to provide services from locally licensed facilities or to have local licenses or registrations (as in England, where teleradiology providers based in England must be registered with and are regulated by the Care Quality Commission). Where teleradiology providers use software as a medical device or AI technologies as part of their delivery, these devices and technology are likely regulated under medical device regulation and recipients of services will want to be assured that all technology used in the delivery of care is certified and meets standards of safety and regulatory requirements.
Standards of Practice
There are no specific universal standards of practice for teleradiology, although national professional bodies often set out helpful standards and guidance for providers and reporting professionals. Where these are not available, the American College of Radiology’s Practice Parameters and Technical Standards, and the UK’s Royal College of Radiologists (RCR) Standards for the provision of teleradiology in the UK are often seen as helpful benchmarks.
Licensing of Radiologists
Licensing requirements also vary by jurisdiction, but clinical professionals interpreting scans outside the commissioning jurisdiction may, as a minimum, need to be licensed in the transmitting country. It is not always clear cut. In the UK, for example, the General Medical Council (GMC) licenses radiologists that are physically located in the UK, but also maintains a list of countries whose teleradiological qualifications it considers equivalent. The RCR, however, recommends that non-UK located radiologists reporting images of UK patients should be registered on the GMC Clinical Radiologist Specialist Register, arguing that this would subject such individuals to professional revalidation and to the usual regulatory safeguards available for UK patients.
Governance and Assurance
To encourage best and safe practice, teleradiology services should be part of an integrated radiology service and subject to a single governance framework, with participating radiologists working within a documented quality assurance framework. This means that data exchanged should include the same level of information as available to the referring organisation (including current and historical clinical information and laboratory results). At the same time, remote services are vulnerable to cyber-attacks and security risks – hardware and software should meet the quality and security (including cybersecurity) standards of the referring organisation and allow integration with the related RIS and PACS systems, and only approved techniques and technologies (including AI) should be permitted.
Data and Confidentiality
The systems and protocols should facilitate the rapid and secure processing of personal data. This may include access, transfer, review, storage and disclosure of patients’ data in a manner that meets relevant data protection standards and preserves patient confidentiality. Organisations should have appropriate technical and organisational measures, data sharing arrangements, patient notices and consents in place as necessary. This is particularly a consideration when the radiologists reviewing scans or providing opinions are working from home or in remote locations.
Teleradiology providers and professionals should have adequate medico-legal and insurance cover and should be indemnified to the same standards as those of the commissioning healthcare organisation. Related contracts should also be explicit about who retains responsibility for the patient and, where the patient establishes a legal relationship with the radiologist, how liability will apply (in the case of services outsourced by NHS organisations, NHS indemnity protection is unlikely to apply).
Teleradiology is an efficient and cost-effective solution that has the potential to support clinicians, providers and their patients in healthcare systems across the world. It can help mitigate the acute radiology workforce shortages and alleviate the increasing demand for scans, and has the capacity to bring expertise to remote and developing healthcare localities. The adoption of new techniques and the harnessing of AI will only increase its efficiency and efficacy.
“With careful planning and advice, participants in cross-border teleradiology can overcome and manage the legal and regulatory issues”
relevant to their transactions – including those mentioned above – and, in international markets that are progressively willing to use and regulate teleradiology services, we can safely predict that many more teleradiology transactions will soon be on the horizon.