2012’s Top 20 Imaging-center Chains: Third Annual Report

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Despite serious reimbursement pressure, the imaging-center market appears to be on the move again, adding 131 sites as of the first quarter of 2012. While this year’s expansion does not approach the tremendous growth rates of the period between 2000 and 2008, when the market more than doubled (from 3,068 centers to 6,431), it does return the sector to slightly more than the size it was in 2008 (6,514 centers), before it contracted.¹ Readers might wonder why the total number of sites in this year’s report is 691 more than last year’s total, instead of the 131 reported (Table 1). Due to a discovery by our data source of 560 diagnostic imaging centers that had not been counted before, it turns out that the market is 560 centers larger than previously thought. We are reporting the total size of the market at 7,074 sites, which includes the 560 previously unreported imaging-center sites, as well as the 131 new sites.

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Table 1. Chain Affiliation

For the purpose of assessing growth, we have excluded the new centers from the total count, but have noted the new total market size parenthetically in Table 1. We were, however, unable to carve out the newly discovered centers from the other tables in this report. Therefore, all centers added this year are considered new centers, for the purpose of analysis. Why, in this era of extreme reimbursement pressure, do we see any growth at all? Anecdotally, we hear that hospitals receive multiple requests annually from imaging-center owners interested in selling their sites. One trend that could be behind the growth is that of payors pushing imaging into lower-cost outpatient sites, causing hospitals and networks to expand their footprints in the outpatient setting. Another is the consolidation of centers in the hands of sharply run imaging-center chains that have the operational expertise necessary to survive on increasingly small margins. Our data set, including the newly discovered centers, shows just one more imaging-center chain than last year (Table 2). Whether in anticipation of an estimated 31 million new patients (who could become insured under the Patient Protection and Affordable Care Act) or simply by following care into the lower-cost outpatient arena, those chains appear to have added 144 centers in the year ending March 31, 2012.

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Table 2. Chain Growth

This is the third annual report on the imaging-center market produced by Radiology Business Journal and its data partner IMS Health, which recently acquired SDI (formerly Verispan). IMS (and SDI, in the case of the previous two reports) provided the data on which this report is based, as well as the comparison information that the company collected and analyzed in earlier years.² The scope of this report is freestanding imaging centers only; imaging centers on hospital grounds are not included in the counts. In 2012, the top 20 imaging-center chains (Table 3) experienced their own miniboom, totaling 114 more than 2011’s top 20 for an aggregate of 1,048 centers held by the country’s largest imaging-center chains. RadNet maintained its number-one position, adding 32 centers (and another 12 since the end of the first quarter of 2012), for a total of 220. HCA maintained the number-two position, with a total of 100 centers (six more than last year). The total of the number-three chain, Novant Health, declined by one, to 80 centers, while its wholly owned subsidiary, Medquest Associates, bulked up by 13 centers, for a total of 78. SimonMed Imaging leapfrogged three chains, by acquiring 21 centers, to occupy the fifth spot, with a total of 56 centers (displacing CDI). Owned by a physician-based practice, SimonMed bills itself as the largest and most advanced medical-imaging provider in the Southwest, with 10 3T MRI systems and comprehensive breast-imaging services. Since forging a partnership with Catholic Healthcare West (now Dignity Health) in 2009, SimonMed has expanded its footprint outside the Phoenix, Arizona, area (where it began) into California, Florida, and Nebraska. Had the imaging-center count been taken today, however, CDI—through its merger with the ninth-largest imaging-center chain, Insight Imaging—would easily have claimed the number-two spot. Black Diamond Capital Management, which owns a controlling interest in Insight Imaging, facilitated the merger by leading an investment in Insight Imaging that will make possible the buyout of CDI’s owner, Onex Corp. The top 20 welcomed three chains into the ranking this year: