Venturing Forth, Jointly: Exploring a New Model for Radiology Collaboration

Radiology’s new normal is an ongoing perfect storm of business pressures. Faced with the constant need to navigate swim-or-sink waters roiled by bundled payments, pay for performance and other models of financial risk-sharing—not to mention declining reimbursement, increased regulatory oversight and transparency on pricing and quality—forward-thinking practices are partnering with their competitors in new joint venture (JV) models.

Creating a larger footprint through a JV collaborative model is a viable way for radiology groups to band together to align with the mission of the hospital or hospital system they serve, said Curtis Kauffman-Pickelle, president and CEO of The Kauffman Group and publisher of ImagingBiz. In so doing, the practices can find “a new way to win in an increasingly complex environment. And by win I mean really more than just surviving. How do you thrive in this environment? How do you build a successful organization?”

With that Kauffman-Pickelle kicked off a Sept. 17 webinar, “A New Model for Radiology Collaboration.” Kauffman-Pickelle moderated the session and was joined by Bill Pickart, CEO of Integrated Radiology Partners, a Milwaukee-based firm that coordinates and facilitates JV formation, and Scott Luchs, MD, president of Ramapo Radiology Associates in New York State’s Hudson Valley and a co-founder of one such JV collaboration, Empire Health Support Services.

Pickart said the new JV model for radiology collaboration has been configured to set up radiology group practices for independent, long-term, sustainably profitable growth. He added that the model is radiologist-driven, enabling independent radiology practices that have traditionally vied for market share within a geographic territory to “bring forward innovative clinical, business and analytics solutions to their hospital system clients.”

“These practices will position themselves as a value-added strategic partner,” said Pickart, “deserving of a seat at the table when policy, reimbursement, clinical and practice-business decisions are made.”

Lower costs, higher performance   

By collaborating on a non-competing basis, and utilizing a collaborative framework such as the one IRP has developed, independent radiology practices can gain the scale and resources necessary to fulfill the expectations of their hospital-system customers, said Pickart.  

He said the JV collaboration model promotes “the ascendancy of the practice and JV partner practices to the highest stage of optimization: that of a completely integrated entity—JV group to group, JV to hospital system and JV to outside constituencies, whether they be payers, patients, the government or other intermediaries.”

Breaking down how the JV collaborative provides for the securing of revenue-cycle management (RCM) performance needed for survival and success, Pickart explained that the collaborative delivers technology solutions that promote high efficiencies, leverage cross-group radiology expertise and capacity, and, through shared analytics—a mandatory requirement in joining a JV—promotes care coordination and system integration and interconnectivity.

The cost of creating and forming such a JV is relatively low, Pickart noted. “Our experience has been that the cost of getting in run somewhere in the neighborhood of $2,000 to $5,000 per radiologist for most JVs on an annual basis,” he said. “Once it’s structured, it’s possible that those costs could be deferred or offset by revenues realized by the JV, as well as cost reductions brought to bear through the consolidated scale of purchasing power through a management service organization.”  

Pickart said the JV often stands to receive benefits of scale, which come in the form of lower costs and higher performing services not only in mandatory analytics and informatics but also revenue-cycle management, distributed imaging, strategic positioning and consulting, clinical workflow consulting and GPO cost-savings opportunities.

In addition, he said, JV collaboration can position a pressured radiology practice to:

• thrive as an independent practice;
• present differentiating metrics and informatics;
• secure access to cutting-edge technologies and systems;
• deliver on hospitals’ desired value propositions;
• take control of the enterprise imaging ACO strategy;
• leverage scale to reduce costs and capital outlays;
• improve group efficiencies; and
• move ahead with new business development.

“This is a call to action to you and to other practices like yours,” Pickart told attendees. “We think the collaborative effort provides a strategic response to promote profitable independence. Positioning is key here, and it is designed to ensure that your practice’s future as a strong, financially viable, independent radiology practice.”  

Collaboration in action  

Dr. Luchs of Ramapo Radiology and Empire Health Support Services began his presentation by noting that some attendees had probably entertained the urge to merge at some point over the past several years. Thinking about and doing, of course, are two very different things. “Most of us know that becoming one practice, or one company, is difficult for a lot of reasons,” he said, citing financial and compensation issues as common points of friction. “But also there are the issues of the culture within each company or organization. A lot of groups have come together only to break apart over cultural differences.”

The JV solution, said Dr. Luchs, has allowed Ramapo and its JV partner,  New York based Radiology Associates, to combine “two premier radiology practices delivering world class, comprehensive imaging services within a geographic area. Together we have a combined 100 years in practice, a tradition of superior patient care, board-certified and subspecialty trained radiologists. And all of this can be done without changing our own financial structure, without changing the culture with which we have all become familiar within each of our groups.”

For Empire Health Support Services, forming one “singular voice” out of two former competitors has meant a chance to experience  the rewards of physician-only leadership. Key to making this work, he explained, was forming several committees, all headed by physicians “so that we can have a strong position in each subsection”—by which he meant not radiological subspecialties but focus areas such as technology integration, informatics and analytics, utilization management, quality assurance and finance.

Decision support models are coming down the road, Dr. Luchs pointed out, adding that they are coming from third party payers, the government and industry. “We want to be able, with our points of data and our analytics, to develop those decision-support models and not have them developed for us. By having this JV partnership, whether our JV ends up having two groups or five groups or 10 groups, we can really help implement best practice models across the entire platform. That’s something your hospital or hospital system wants to see, and would love to see from you.”

“The JV process is not just about all of us being friends and talking on the phone,” Dr. Luchs concluded. “It’s about having a seat at the table. Whether it’s a seat at the table on decision support and utilization management—or a seat at the table on policy, or on the hospital’s strategic plan as they look to move forward, or a seat at the table with health insurers, or malpractice insurers—you have to have a seat at the table. Because going forward in the future, none of us knows the direction radiology is going to take.

“People are scared,” he added. “This JV model is the first model I’ve seen that can allow people like me to move forward feeling as though we’re not being reactive. We’re being proactive. Thanks to this JV model, there is a future.”