2011’s Top 20 Imaging-center Chains: Second Annual Report

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The growth of imaging-center chains was flat last year as owners absorbed a new round of reimbursement cuts in the form of higher equipment-usage rates and multiple-procedure payment discounts. Independent-chain owners primarily held their own or shed centers—and despite reports of hospital buying sprees, the chill extended to the country’s largest hospital-affiliated chains as well (though hospitals overall continued to bulk up through relationships with outpatient imaging centers). The good news is that procedural volumes and patient visits continued the upward trend that began last year as owners absorbed clientele and sought efficiency gains to offset reimbursement cuts. Radiology Business Journal and SDI (formerly Verispan), Plymouth Meeting, Pennsylvania, are cosponsors of this second annual report on the imaging-center–chain market. SDI provided the data on which this article (and last year’s report 1) are based, as well as the comparison information 2 that the company collected and analyzed in earlier years.

Table 1. Top 20 Chains

The top 20 imaging-center chains (Table 1) added just 10 centers in 2011, for a total of 934 (compared with 924 in 2010)—a mere 1% growth rate. By comparison, the top 20 imaging-center chains grew 7.5% between 2008 and 2010. More chains contracted than grew in 2011, with 10 chains shedding centers, three (and possibly five) chains adding them, and three remaining the same. Two new chains appeared on the list this year, and one was displaced. The remaining two chains, Novant Health (Winston–Salem, North Carolina) and MedQuest Associates (Alpharetta, Georgia), were counted as separate chains this year because MedQuest is a wholly owned subsidiary of Novant Health. After Novant Health purchased the outpatient imaging-center chain in 2007, however, SDI counted the combined imaging-center holdings of both companies as one. Last year, the combined company had 87 centers; this year, it has 81 (for Novant Health) and 65 (for MedQuest), indicating that one or both of these chains went on a buying spree. With 188 centers, RadNet (Los Angeles, California) once again was the largest imaging-center chain by far. Following several years of torrid growth, however, the company shed 10 centers in 2011. It made up for its inactivity in the imaging-center market with the acquisition of a PACS company and a teleradiology company in 2010. Two of the three chains that added centers grew significantly, adding enough to offset the losses of the majority. One was the independent SimonMed Imaging (Phoenix, Arizona), which gained 12 centers in 2011 (for a total of 35), leapfrogging up to eighth position. The other was Tenet Healthcare Corp, Dallas, Texas, which added 14 centers, for a total of 49. In spite of the difficult operating environment, the total number of imaging centers in the United States—including single-site operations—reversed its downward trend and logged a modest increase in 2011, adding an additional 72 centers, for a total of 6,383 (Figure 1).

Figure 1. US imaging centers (by state and region), 2011.

California and Florida continue to swap positions as the states with the most imaging centers. In 2011, Florida took back the number-one position, with 622 centers. That state added 10 imaging centers in 2011, compared with the three added by California (total: 619), mired in state budget problems. New York (510), Pennsylvania (360), and New Jersey (280) rounded out the five states with the most imaging centers. Ohio added the most capacity in 2011, with 16 new centers, followed by Michigan (13), Arizona (12), and Indiana and Florida, each of which added 10 new centers.

Figure 2. Growth/decline of US chains, 2003–2011.

The number of imaging-center chains—defined as companies that own two or more centers—in the United States continued its slide, from a peak of 1,066 in 2008 to 902 in 2011 (Figure 2). At the same time, the number of centers owned by chains increased from 4,383 in 2009 to 4,533 in 2011, suggesting that existing chains are availing themselves of buying opportunities.

Figure 3. Growth/decline of the top five chains, 2007–2011.

With the exception of MedQuest, however, the top five imaging-center chains pared their totals rather than adding centers, indicating that cash flow at the top of the chart might have ebbed due to reimbursement cuts—and that efficiencies were not easy to find (Figure 3). The declines, however, are in line with a recently established pattern of alternating