Radiology 100 Demonstrates Dynamic Market

The Radiology 100 ranking of the 100 largest private radiology practices depicts a dynamic radiology market in the United States, with group practices facing increasing uncertainty and complexity. Sustained pressure on radiology reimbursement continues to drive radiologists to work more hours per year in an effort to maintain income levels.

Recent directives from the government and payors have created significant additional administrative workload for physicians of all specialties. Studies by professional organizations, advisory boards and survey organizations indicate that administrative or non-productive workload can easily be greater than 30% of a physician’s total workload.

A scan of recent articles from Radiology Business Journal (RBJ) and educational conference sessions at the Association of Medical Imaging Management (AHRA) and Radiology Business Management Association (RBMA) reveal great emphasis on preparing radiology groups for the continued transition from fee for service to “value”, legislative mandates—Medicare Access and CHIP Reauthorization Act of 2015—and information on how radiology groups are valued by potential suitors or partners. Many radiology groups are attempting to identify the opportunities that give them the greatest likelihood for success in the future.  

Radiology group boards find themselves having to make difficult decisions concerning the direction for the future. The art of strategic planning for private radiology groups continues to be a complex balancing act requiring good data, organizational fluidity and a crystal ball. Decisions concerning remaining independent or choosing the right partner(s), continue to be common board discussion topics.

Radiology has long been considered a “technology” specialty. Utilization of high-tech imaging and reading systems has defined our specialty. As high-tech imaging continues to disseminate from radiology’s domain into many different physician specialties, changing the paradigms of how radiology is viewed and valued will be a critical aspect of the group’s strategic planning process.

Data and information technologies are an important and expensive transformation that radiology must embrace. More than ever before, radiology groups find they must prioritize and realign resources to create greater efficiencies and meet data and reporting needs. Smaller or medium-sized groups may want to pursue enhanced data and information technologies, but may not have the expertise and human or financial resources to successfully implement and utilize these systems.

Action required

The reality in many cases is that the group needs to take action to survive and thrive. For some, this may be through mergers with other radiology groups; for others, private equity investment provides needed financial resources. Some groups find their choices limited by a partner organization where the only future for the group is to become employed or pseudo-employed through professional service or network agreements. No matter what path a group may choose as an attempt to manage change, change will find us.

The changing political, economic and reimbursement environment continues to create uncertainty for Radiology groups. 

It comes as no surprise that the RBJ Radiology 100 largest private radiology practices survey results continue to see the average number of radiologists increase for most groups participating in the survey. Another trend continues in that a number of privately owned practices disappeared from the list as they have been acquired by health systems, private equity or other larger radiology groups.

Radiology Associates of Northern Texas (RANK) is once again the largest group in the survey and continues to grow in size (primarily from acquisitions). RANK grew 28% from 2015 to 2016, increasing to 164 from 128 Radiologists. At number two on the survey, University Radiology (East Brunswick, NJ) grew from 106 to 119 radiologist FTEs. Medical Diagnostic Imaging Group (Phoenix, AZ), Bay Imaging Consultants Medical Group (Walnut Creek, CA), St. Paul Radiology (St. Paul, MN) and Renaissance Medical Imaging all managed an increase of radiologist FTEs greater than 20%. One departure from the list of privately owned radiology groups, number 13 on the 2015 list, Columbus Radiology has joined national radiology services provider.

As the pressure to demonstrate value increases for radiology groups and groups make decisions concerning the optimal way to navigate the uncertainties of the healthcare market, we would expect additional changes to the Radiology 100 largest private groups when we review the list again in 2017. My prediction is that we will see another six to seven current groups exit the list by the time it is published.