In the Heights: The Radiology 100 Achieves a New High, Steady Growth Prevails

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GettyImages-513132951-rad100-2016.jpg - Radiology 100, 2016

It was grow or forfeit ground, when it came to retaining rank on the list of the nation’s largest radiology practices this year. To judge from the change—or more precisely decline from 47 to 43—in the median practice size of the country’s largest 100 radiology practices, one might be tempted to assume that radiology put practice-size growth on hold in 2015.

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Scratch the surface, however, and it is clear that radiology practices have continued to grow, particularly at the top of the ranking. For instance, the average size grew from 52 in 2015 to 53.5 in 2016. More tellingly, we ranked 26 practices with more than 65 radiologists compared to 20 in 2015. In 2009, when we began ranking the 50 largest private radiology practices, there were eight.

More than 130 practices submitted full or partial data to be ranked among the 100 largest private radiology practices in the United States, cosponsored by Radiology Business Journal and CliftonLarsonAllen, Minneapolis, Minn. Data for an additional 61 radiology practices of known size were solicited through phone calls or gathered from web sites. When a practice’s number of FTE radiologists was counted on a web site, the total number was reduced by 5% to account for the presumed difference between FTE numbers and radiologist total head count.

The survey for the ninth annual ranking of the nation’s largest private radiology practices was posted online at RadiologyBusiness.com and emailed to our distribution list. Practices were ranked based on their number of FTE radiologists and where there was more the one practice of the same size, the number of FTE employees was considered.

As in past years, we also collected the number of procedures performed, the number of hospital contracts and the number of imaging centers owned, as well as whether the practice operates a managed-services organization (MSO). This year we also asked practices to share the number of work relative value units (wRVUs) per radiologist, average shift length and number of shifts worked per year, in addition to annual revenue, although we do not share financial numbers with readers. We also asked participants to specify the type of MSOs they operated.

Only private radiology practices were ranked. We defined private practices as wholly owned by physician shareholders, with no outside investment from private equity or other sources. We also did not include employed practices, which excludes many large academic practices.

Top five

You will not encounter any new practices at the very top of the list: The same five mega-practices ranked in the same exact order as in the 2015 ranking. Although the players and their rankings remained the same, their achievement was not earned through the status quo. All five of the top-ranking practices added radiologists last year.

The nation’s largest practice also registered the greatest growth. Last year, Radiology Associates of North Texas (RANT), Fort Worth, topped the list with 128 FTE radiologists; this year it added 36 radiologists for a total of 164 FTE radiologists.

In March, RANT reported that two groups would join the practice, Texas Neuroradiology, with five radiologists, and Radiological Consultants Association, which brought 31 radiologists into the fold. The practice also added eight hospital clients since 2015.

Claiming the number two spot on the list two years running, University Radiology, New Brunswick, NJ, weighed in with 119 FTE radiologists, compared to 106 in 2015, registering the second largest growth spurt on record this year. In January, the practice merged with Associated Radiologists, a 19-radiologist practice based in Bridgewater, NJ.

University Radiology serves 13 hospitals and has an ownership interest in 20 imaging centers, providing employment to 650 FTE employees. The practice provided interpretations for 1,860,000 procedures in 2015.

In third position, Advanced Radiology Services, Grand Rapids, Mich., added two FTE radiologists for a total of 108 FTE radiologists. Advanced Radiology Services has been among the largest five practices in the nation since we began ranking practices of size in 2009. It added two hospital clients for a total of 17.

Advanced Radiology Services was at the top of the list with 106 FTE radiologists in 2009. Two of the four other original top-five practices have continued to grow, but not fast enough to remain in the top five; one of the four was acquired by its primary client; and the other lost more than 20 partners after an early experiment as a national teleradiology provider. It has steadily added FTE radiologists since, but not yet enough to reach its size achieved in 2010.

Once again, the fourth-largest practice is Southwest Diagnostic Imaging, Phoenix, Ariz., which added three FTE radiologists to climb further above the 100 mark with a total of 104. A force both in inpatient and outpatient imaging in the Valley of the Sun, the practice serves 15 hospitals and has an ownership interest in 28 imaging centers.

Radia, Lynwood, Wash., is the fifth-largest private radiology practice on the list, adding two FTE radiologists since last year for a total of 102. Although the practice reported two fewer hospital clients and appeared to divest itself of the two imaging centers it reported an ownership stake in last year, the practice nonetheless increased its total number of studies performed. Radia reported doing 1,300,000 procedures in 2015; this year, the practice performed 1,451,367 procedures.

Big picture

The median practice size for the nation’s 100 largest private radiology practices dropped from 47 to 43 full-time equivalent radiologists in 2016. That trend was reflected in two of the four practice-size cohorts (Figure 1).

Despite the lower median number for the entire group, other indicators suggest continued growth among the nation’s largest private practices over the past year. To begin with, the Radiology 100 accounted for a total of 5,324 FTE radiologists in 2016. That compares with 5,211 in 2015 and 4,665 when we expanded the ranking to 100 practices in 2012.

With a few aforementioned exceptions, much of the growth was incremental, causing a great deal of up and down movement on the list. Practices retained their previous year’s ranking only by adding radiologists. In other words, if a practice stood still, it slipped down the list. This was true in all practice-size cohorts.

The largest practice on the list (Table 1) this year had 166 radiologists and the smallest had 26, compared with 128 and 27 respectively in 2015. The ranks of the very largest practices increased the most (from 21 in 2015 to 26 in 2016) and the 35 to 49 FTE radiologists cohort (from 33 in 2015 to 37 in 2016) gained four practices. The number of practices with 50 to 65 radiologists declined significantly (from 25 in 2015 to 17 in 2016)—at least five of the eight stepped up to the largest category. The smallest size cohort dropped by one practice, from 21 in 2015 to 20 in 2016.

Still, those numbers underscore how fragmented radiology practice continues to be. The 5,324 members of the nation’s 100 largest radiology practices represent just one-sixth or less of the total number of the nation’s practicing radiologists. A recent estimate from the Harvey L. Neiman Health Policy Institute put the total number of radiologists between 30,696 and 37,399.(1) The remainder are either solo practitioners, employed—by an academic institution, health system or corporate radiology services provider—or practicing in groups of less than 28 radiologists.

For the first time this year, we asked practices to provide the length and number of shifts their radiologists worked as well as the average number of wRVUs produced by each FTE radiologist. While we did not publish the individual responses, we have compiled the aggregate (Table 2).

The median annual wRVUs per radiologist reported was 11,437. The largest practice-size cohort—practices with more than 65 FTE radiologists—generated the highest median number of average wRVUs at 12,47; the next highest number was generated in the smallest practice-size cohort of 35 or fewer FTE radiologists: 12,353. Perhaps the smaller size equates to less time spent on practice management and more on reading studies.

The median shift length for practices of all sizes is 9 hours and the median number of shifts per radiologist for the entire list was 210. The highest numbers of shifts were reported by the two largest size cohorts: 213 was the median for groups with 50-65 FTE radiologists and 212 for groups with more than 65 FTE radiologists.

Hospitals, imaging centers and MSOs

The median number of hospital contracts (Figure 2) did not change for three of the four practice-size cohorts: 17 for the >65 cohort; 10 for the 50–65 cohort; and five for the <35 cohort. Only practices with 35 to 49 FTE radiologists had a decline in the median number of hospital contracts, from eight in 2015 to seven in 2016. This could account for the fact that this cohort had the lowest median number of wRVUs.

Nonetheless, the median number of procedures (Figure 3) increased for every practice cohort, except for the <35 size cohort. The median number of studies performed by the largest practice-size cohort increased the greatest amount, from 1,385,000 in 2015 to 1,489,965 in 2016.  The next two largest size cohorts had smaller increases in the median number of procedures performed: from 859,349 to 880,118 (50-65) and from 567,765-577,543 (35-50). The median number of procedures performed dropped from 490,000 to 465,000 for the smallest practice-size cohort (<35).

With the number of hospital contracts remaining the same for many practices, either inpatient imaging is on the rise or practices are increasing their outpatient imaging clients. This year’s results indicate that practices may be regaining their taste for imaging center ownership.

We asked practices to report the number of imaging centers in which they had an ownership stake, and the median numbers rose for every practice cohort except for groups of 50-65 FTE radiologists (Figure 4). This increase could be attributed to various factors: variation in the number of practices reporting their data each year; more practices acting on the opportunity to partner with hospital clients; or more practices opening wholly owned imaging centers.

The >65 cohort practices had a stake in a median 11 imaging centers, up from 8 in 2015, but still below a median 15 in 2014.; the 50-65 group slid from a median of six to four; groups 35-49 grew from a median of two to three; and the <35 group bounced back up to a median 4 from 0 in 2015.

Could there be a relationship between the increase in imaging center holdings and the number of MSOs that practices reported? Last year, 58.8% of practices said they operated an MSO and this year, 62.7% reported operating an MSO.

We went one step further this year and asked practices to specify whether they operated a billing, information technology (IT) or management and consulting MSO. The most prevalent MSO reported was a management and consulting MSO, with almost half (45.8%) of practices reporting such an MSO; 43.3% of practices operated an IT MSO; and 32.5% operated a billing MSO (Figure 6). Clearly, the Radiology 100 is highly engaged in maximizing revenue through the industrious pursuit of ancillary income.

Fiscal picture

Although we cannot share the revenue data contributed by 37 practices (fairly evenly distributed among practice-size cohorts), we can offer a few comments and observations about the general economics of radiology practice—at least for the largest 100 practices.

First of all—and this is unlikely to come as a surprise to most practice executives—the median revenue generated per radiologist took a significant dive, despite apparent but small increases in productivity. On the other hand, the average revenue per radiologist increased slightly among the 37 practices that shared their data with us. A significant drop in the median revenue-per-radiologist and a slight increase in the average revenue-per-radiologist in our group of 37 suggests that the revenue picture for large practices is better than the smaller practices in this group.

The median number of employees remained stable in the two smallest practice cohorts, dropped precipitously in the second-largest practice cohort, and increased in the largest practice cohort (Figure 5). Revenue per radiologist dropped the most in the second-largest practice cohort, possibly influencing their median number of employees.

We observed a less direct relationship between imaging center ownership—which appears to have increased—and the number of employees than in past years. A possible explanation for this is that many of the imaging centers previously wholly owned by practices are now co-owned by hospital clients, and employees that previously were paid for by the practice may now be on hospital payrolls.

In conclusion, we extend our sincere gratitude to those executives—and their respective radiology practices—who took the time to fill out the survey questions and contribute their data for the benefit of their colleagues. We congratulate all practices that have ranked among the nation’s largest private radiology practices, and we recognize your achievement in building strong businesses that contribute to both the physical and economic well-being of your communities. 

Editor’s Note: We gratefully acknowledge the contribution of Daniel DeMarais, associate, health care, CliftonLarsonAllen, for survey data computations.

Reference:

  1. Hughes D. How many radiologists? It depends on who you ask. Harvey L. Neiman Health Policy Institute Web site. April 14, 2015. Reston. Va. Accessed September 20, 2016.