Thousands of radiology practices have lost their independence amid waves of consolidation

Thousands of radiology practices have lost their independence over the past decade amid waves of consolidation, according to Neiman Health Policy Institute research published Wednesday.

Between 2015 and 2022, nearly 3,500 physician practices that provide radiology services disappeared from the Medicare Provider Data Log. This included roughly 2,300 practices (65%) that operated solely within the specialty, experts detailed Wednesday in the American Journal of Roentgenology [1].

Across almost 3,900 physicians for whom their sole affiliation was a radiology-only practice that vanished from the Medicare rolls, 46% worked for a larger multispecialty group the following year. Meanwhile, the balance (54%) worked at a different radiology-only practice at the next turn of the calendar.

Though the number of Medicare-enrolled radiologists increased 17% during the study period (up to 36,000), the tally of affiliated practices fell 15% (down to 4,300).

“While determining causes of consolidation were beyond this study’s scope, the shifts may relate to economic incentives and legislative changes favoring large multispecialty practices,” lead author Eric Christensen, PhD, research director at the policy institute, and colleagues wrote June 5. “Radiologists’ continued consolidation into large multispecialty practices may facilitate subspecialization and greater negotiating power in payer contracting. Yet, radiologists may prefer smaller and/or radiology-only practices for autonomy and influence on practice structure,” they added.

For the study, researchers analyzed information from the database formerly known as Physician Compare, identifying all radiologists enrolled in Medicare over a 10-year period ending in 2023. They also pinpointed each provider’s affiliated practice using unique identifiers. This included physicians across diagnostic and interventional radiology, along with nuclear medicine. If a radiologist was affiliated with three practices in one year, the authors considered him or her to represent one-third of a doc for each affiliated group.

Christensen et al. highlighted a 32% decline in the number of radiology-only practices over the course of a decade (down to 2,118) while groups with no majority specialty (employing at least one rad) swelled 25% (to 1,169). There also was a nearly 349% leap in the number of practices employing 100 or more radiologists, up to 148. Same for those employing between 50 to 99 members of the specialty, with an increase of 121% (up to 277). At the same time, there were marked drops in the number of practices employing 1 or 2 radiologists (-19%), 3 to 9 rads (-34%), and 10 to 24 (-25%).

When considering the 3,494 practices that disappeared from the Medicare rolls, consolidation likely is not the only cause. The tally would include practices that closed, along with those actively marketed for sale, Elizabeth Rula, PhD, executive director of the policy institute, told Radiology Business. It’s also implausible that this many physician groups ceased accepting Medicare. Last year, only about 1.1% of providers ditched the federal payment program, and radiologists were not among the specialties with the highest opt-out rates, according to the Kaiser Family Foundation. Plus, the authors identified practices using a unique ID number, which would have remained the same after a name change, Rula noted.

During the study period, the number of radiologists in multispecialty groups surged 47%. This included a 51% uptick among groups with no majority-specialty and 65% in those predominantly operating in imaging. The study authors believe radiologists may be seeking the safe harbor of large multispecialty groups as they navigate complex regulatory challenges. These include the No Surprises Act and value-based care initiatives under the Permanent Doc Fix of 2015 (aka, MACRA).

“Responding to the incentives created by these laws is facilitated with a larger practice,” study co-author Jay Parikh, MD, a professor at the University of Texas MD Anderson Cancer Center, said in a statement. “Accountable care organizations, value-based payment, care coordination, quality improvement rely on EHR capabilities, the costs of which are more readily managed by larger entities. Likewise, the costs of the independent dispute resolution process under the No Surprises Act favors larger practices, as larger practices provide more opportunity to batch claims in the independent dispute resolution process.”

The study period also occurred during a time of growing interest in the specialty from private equity investors. For instance, Radiology Partners launched in 2012 and has since grown into the largest practice within the specialty.

The company had about 215 radiologists in 2015, which grew to 322 in 2016, 719 in 2017, 1,229 in 2018, 1,604 in 2019, 2,773 in 2020, 3,259 in 2021, 3,439 in 2022, and 3,624 in 2023. About 12%-13% of U.S. radiologists work with the top PE-backed practices in the specialty, including 10% at RP, 1% at US Radiology Specialists, 2% at multispecialty group Envision Healthcare, and less than 1% at LucidHealth and Rayus Radiology, one RP leader estimated earlier this year.

“Radiology private practices have historically consolidated along two primary pathways. Some practices have consolidated under radiologist-owned and operated conditions. Other practices have found it financially lucrative to monetize their operations and sell to larger corporations backed by private equity,” Christensen et al. wrote. “In these cases, senior partners may receive multimillion dollar lump sum payments at the expense of ownership and future salary earnings for themselves and their group’s junior radiologists. Investments by private equity firms typically have a fixed time horizon. Return on investment is often achieved through the rapid acquisition and integration of multiple private practice groups using high levels of debt. Concerns have been raised regarding this approach, including potential commoditization of the radiologist, reduced care quality, higher radiologist productivity requirements, and radiologist burnout. It is unknown from the present data the extent to which consolidation occurred along these two pathways.”

Read much more, including potential study limitations, in AJR at the link below.

Marty Stempniak

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. 

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