Investor-owned radiology provider RadNet cuts costs, uses $55M in aid to weather COVID’s impact
Radiology provider RadNet has implemented a series of cost-cutting measures to counter a roughly $25 million drop in revenue during the first quarter of 2020, leaders announced Monday.
Those have included restructuring facility rent payments, temporarily closing 97 locations, and at least partially furloughing 3,900 of its employees. The investor-owned, Los Angeles-based company also revealed this week that it received $15 million in aid from the CARES Act in April that it will likely not need to repay, and another $40 million in accelerated payment loans from Medicare.
President and CEO Howard Berger, MD, said the firm is seeing a rebound in imaging, as some states have started to lift restrictions to allow nonurgent procedures to resume. At the low point in mid-April, the company had seen a roughly 75% drop in visits when compared to its original 2020 projections.
“We are beginning to see some signs of recovery,” Berger said in a May 11 statement. “Based upon the recent improvement in volumes and my growing confidence with our expense and cash conservation initiatives, I believe RadNet will emerge in the post-COVID-19 environment as a stronger and more visible leader in our industry,” he added later.
Berger detailed several other measures RadNet has also implemented to improve its financial position—reducing salaried physicians’ and executive managers’ compensation by 50%, restructuring payment schedules with vendors, and suspending all new capital projects. The federal government also recently announced an additional $20 billion in aid funds, with Berger noting that RadNet “may be eligible for further payments.”
All told, the country’s largest provider of freestanding, fixed-site diagnostic imaging recorded $281.6 million in revenue in the first quarter, and a net loss of $16.4 million. Earnings before interest, taxes, depreciation and amortization landed at $20.4 million, a 38.5% decrease from the same period in 2019. You can read more about its Q1 results here.
Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.