Private equity lobbying group, radiologist defend investors’ role in the imaging industry

A private equity lobbying group and North Carolina radiologist are defending investors’ role in the imaging industry amid increased political scrutiny. 

The American Investment Council hosted a Punchbowl News event Wednesday in Charlotte, North Carolina. It featured a fireside chat with council President and CEO Drew Maloney and Robert L. Mittl Jr., MD, a neuroradiologist with Welsh, Carson, Anderson & Stowe-backed Charlotte Radiology. 

Both voiced their support for PE in medicine amid “staunch criticism” from members of Congress. U.S. Sen. Elizabeth Warren, D-Mass., and other Democrats introduced legislation Oct. 10 aimed at halting private equity “looting” of healthcare entities. 

“The reality is private equity investment in healthcare is better for patients; it’s good for doctors; it’s better for quality and maintains community engagement,” Mittl, who also serves as chairman of the US Radiology National Physician Leadership Board, said at the event according to a recap published Oct. 16 by Pensions & Investments (subscription required). 

Charlotte Radiology partnered with New York-based Welsh Carson in 2018 to form US Radiology Specialists. Since then, the group has grown to include 175 imaging centers in 13 states, Mittl noted. The 30-year member of Charlotte Radiology believes there’s “an unfortunate narrative which is unfair and inaccurate about the effects of private equity investment in healthcare.” He sees PE investment as a vehicle to grow access to imaging and do so at a lower price point than competitors. 

“Our partnership with private equity has allowed us to gain capital and expertise to grow and continue to expand that access, that low-cost option for patients,” Mittl said at the event, according to P&I. 

“This is a hugely capitally intensive business that needs to keep up with technology,” added Maloney of the AIC, which was formerly known as the Private Equity Growth Capital Council. 

Sen. Tillis also defended the PE industry during the event. 

“Private equity has been a very important part of the ecosystem to drive innovation and to really drive the historic growth that we’ve had in North Carolina over the last decade,” said the senator. AIC estimated that the Tarheel State is the ninth largest recipient of PE dollars, with it home to 600 businesses backed by such investors. 

Ahead of the event, the American Investment Council posted a 90-second video Oct. 10 featuring US Radiology Specialists’ senior director of operations and Charlotte Radiology breast imaging specialist Amy Sobel, MD. 

“With private equity being involved with Charlotte Radiology, there’s been a lot of investment in terms of helping us to expand,” Betts said in the video. “We are able to bring new technologies to the market, expand offices at a more rapid pace, and add staff—all made possible because of the investments by private equity.”

Sen. Warren and colleagues, meanwhile, have lambasted PE’s involvement in the healthcare industry. Her ire stems, in part, from Cerberus Capital Management’s former ownership of Steward Health Care, which is now mired in bankruptcy. Executives purportedly used the hospital system as a piggybank, stripping it of assets, loading it with debt, and using money to fund lavish purchases. 

“More and more Americans are feeling the presence of private equity in our economy, including in critical sectors like housing and healthcare,” Sen. Tina Smith, D-Minn., said earlier this month. “They arrive promising to revitalize communities and turn around struggling hospitals and companies, but far too often, they extract value for themselves at the expense of workers and ordinary people.”

You can read a reprint of the Pensions & Investments story posted on the AIC’s website here. Along with USRS, other private equity-backed groups in radiology include Premier Radiology Services, LucidHealth, Radiology Partners, Rayus Radiology, SimonMed, Solis Mammography and Capitol Imaging.