Expert panel: Radiologists with MBAs weigh in on private equity’s entrée into imaging

Private equity continues to make its presence felt in radiology, buying up some of the specialty’s biggest names. But will the investment provide benefit to patients and providers or do more harm than good?

Three radiologists—who hold master’s degrees in business administration and work in the nonprofit realm—recently weighed in on this hot topic in JACR [1]. They noted some of the benefits that can come with investor backing, alongside potential detriments, while offering advice to leaders navigating this issue.

“In theory, private equity can promote new investments in technology, more subspecialty imaging care, greater financial stability in uncertain times (e.g., COVID pandemic), lower administrative overhead costs, and greater purchasing power,” corresponding author Christoph I. Lee, MD, MBA, director of the Northwest Screening and Cancer Outcomes Research Enterprise at the University of Washington and deputy editor of the journal, and colleagues wrote April 1. “However, possible drawbacks to private equity investment in radiology include a greater focus on imaging volume and short-term profit generation, which could threaten quality of care, radiologist well-being and cost-efficiency.”

The editorialists highlighted potential remedies to these problems, which could include fostering transparency about a practice’s financing structure and ensuring the investment helps improve patient outcomes. In his own personal comments, Lee urged younger radiologists, and the entire specialty, to hold private equity firms accountable.

“Greater pressure could be applied by radiology societies and the profession as a whole on private equity firms to demonstrate a greater public good from their involvement and profit-making off of radiology practices beyond greater efficiency,” Lee wrote.

Frank J. Lexa, MD, MBA, noted that these firms often have a five-year timeline in which they seek to invest in a practice and then realize gains. He urged imaging leaders to look even further into the future to understand how these decisions will upend their specialty.

“The professional organizations in radiology need to stop thinking on a five- or 10-year horizon and instead think hard about a 30-plus-year horizon,” argued Lexa, who is chief medical officer and vice chair of the ACR Radiology Leadership Institute. “That is the match for a young radiologist and her career. Their future should be at the top of our minds, not what is good for a 60-year-old who wants to sell his practice and leave radiology.”

Melissa A. Davis, MD, MBA, meanwhile, urged peers to advocate that their organizations always remain led by physicians and centered around patient care, rather than profits.

“Being a vocal presence within our groups is one way to ensure that the change management occurring at scale within our field is driven by the practicing radiologists,” Davis, who is vice chair of informatics for the Department of Radiology at Yale University School of Medicine, advised.

Read the rest of the piece in the Journal of the American College of Radiology below.