Big fish, big pond: What national rad groups mean for local practices

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 - Big fish, little fish

Radiology practices will face increasingly intense competition from national entrepreneurial radiology initiatives for hospital contracts, and practices that don’t recognize this will be more vulnerable, according to an article published online ahead of print in the Journal of the American College of Radiology.

Growing out of the physician practice management trend in the mid-1990s, national entrepreneurial radiology initiatives are for-profit companies that generate their profits through management expertise, practice efficiencies and economies of scale, according to Lawrence R. Muroff, MD, professor of radiology at both the University of Florida, Gainesville, and the University of South Florida, Tampa. In the 2000s, these companies tapped into the outsourced, night-call coverage market, but now, under pressure from investors, they are looking for new growth opportunities.

“With the outsourcing market saturated (and possibly shrinking), the only available opportunity for potential growth of these companies is the assumption of hospital radiology contracts,” wrote Muroff.

National entrepreneurial radiology initiatives are attractive for a number of reasons, depending on one’s perspective, noted Muroff, including:

  • 24/7/365 subspecialty expertise access for referring physicians and patients;
  • Monthly quality metrics provided by the companies makes it easy for hospital administrators to compare performance;
  • In some cases, national companies may not usurp small radiology groups but instead offer complementary coverage;
  • Radiologists working for these companies will be unburdened from management and practice-building chores;
  • Larger companies may offer higher level management expertise; and
  • Older radiologists looking to sell their practice can turn to national entrepreneurial companies.

On the flip side, these large companies don’t have the same loyalty and community roots of smaller practices and radiologists working for them have little influence over the direction of the company, wrote Muroff. And while there is the possibility of improved performance, this doesn’t always materialize.

In looking to expand and take more hospital contracts, Muroff explained that national companies are “cold calling” hospital administrators and maintaining a presence at meetings for administrators. One company is offering educational opportunities to administrators looking to make the switch from their current radiology group, even offering a sample request for proposal for radiologic services as part of the course material, according to Muroff.

“It must be understood by radiologists that a passive posture is not a viable solution,” he wrote. “To ignore this nontraditional competition and hope that it will go away is a losing strategy that could have disastrous consequences for the practices involved.”

For its part, the American College of Radiology cannot condemn national entrepreneurial radiology companies without potential litigation and has stated the competition is neither illegal nor unethical. Moreover, many radiologists working for these companies are members of the college and these companies may offer better service, wrote Muroff.

In order to maintain their tenure, local radiology groups must provide equal or better service and expertise than the national groups, according to Muroff. A major component of this will be crafting alliances with other providers and academic institutions and developing leadership skills. “Relationships will have to be developed or strengthened so that radiologists will be deeply integrated into the medical, social, and political fabrics of their hospitals and their communities.”