Practices tied to private equity, hospitals charge significantly more than independent radiology groups
Hospital- and private equity-affiliated radiology practices command significantly higher prices than their independent practice counterparts, according to new research published Tuesday.
Consolidation of imaging groups has accelerated in recent years, with limited evidence on how this change impacts economics within the specialty. Researchers with Brown University recently set out to understand how such M&A activity has changed prices for radiology services, sharing their findings in the Journal of the American College of Radiology (JACR).
They found a noteworthy gap, with negotiated professional prices for hospital-based radiology services about 43% higher than independents. That’s compared to about 16% higher for investor-backed radiologists versus others in private practice.
“Our findings demonstrate significant differences in negotiated radiologic service prices by practice ownership, with hospital and PE-affiliated practices able to negotiate higher professional fees than independent practices,” corresponding author Yashaswini Singh, PhD, MPA, a healthcare economist and professor with the Providence, Rhode Island, institution, and colleagues concluded. “These results highlight the financial implications of ongoing consolidation in radiology and underscore the need for continued research into how these trends affect radiologists, insurers and patients.”
Brown University experts used Pitchbook data to identify practices affiliated with private equity, along with rate information from Clarify Health. They analyzed prices for radiologic services negotiated by four national health insurers—Aetna, Blue Cross Blue Shield, Cigna and UnitedHealthcare—which account for most covered enrollees. Singh et al. gathered negotiated professional fees for 13 “shoppable” radiologic services, such as screening mammography, CT of the head without contrast, and ultrasound of the abdomen.
The final sample included nearly 25,000 radiologists, about 44% of whom were affiliated with independent private practices as of 2022. Another 41% were employed at hospitals, and 11% were employed by private equity (with the final 4% falling into other categories). Negotiated professional fees for imaging services were roughly $60.60 (or 43%) higher for hospital-based rads compared to independents and $22.39 (or 15.9%) higher for private equity.
“This difference aligns with broader healthcare trends whereby hospital-employed physicians tend to receive higher reimbursement rates because of hospitals’ stronger negotiating leverage with insurers,” the authors reported. “The magnitude of this difference underscores the financial advantages hospitals have in payer negotiations, which may have downstream effects on reimbursement structures and radiology practice models.”
Higher prices for PE-backed groups suggest such ownership may enhance bargaining power, potentially by consolidating smaller groups into larger entities. PE also may be targeting groups with higher negotiated rates as acquisition targets, the authors speculated.
The states with the highest concentration of radiologists in PE-backed groups were Alaska (44%), Arizona (43%) and Nevada (41%). Meanwhile, North Dakota (90%) and South Dakota (81%) were the two states with the highest proportion of hospital-employed radiologists. Overall, geographies with higher hospital affiliation rates tended to have lower private equity numbers, the study found. This inverse relationship suggests market structure and local healthcare policies may shape consolidation, the authors noted.
“Understanding these pricing trends is critical for radiologists as they navigate career decisions, employment models, and contract negotiations,” Singh and co-authors advised. “For independent radiologists, these findings highlight the competitive challenges they may face in negotiating reimbursement rates with insurers. Independent practices may need to explore alternative strategies to maintain financial sustainability, such as forming larger physician-led networks or joining clinically integrated networks to enhance bargaining power.”
“Furthermore, the long-term implications for patient care and healthcare costs remain a concern,” they added. “Increased prices for radiologic services may contribute to higher insurance premiums and out-of-pocket costs, potentially limiting access to imaging. If consolidation continues to drive price increases without clear improvements in quality or efficiency, concerns about the sustainability of healthcare spending will intensify.”
Read more about the study’s findings, including potential limitations, in JACR. The analysis was supported by Arnold Ventures, PatientRightsAdvocates and the Robert Wood Johnson Foundation.
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.