The Big Get Bigger, Primarily at the Summit

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 - Radiology 100 2013

Welcome to the results of the sixth annual radiology-group survey. Recently, I had lunch (at a conference on health care’s future) with the former CEO of a large teleradiology company, and he asked how radiology groups were responding to changes in the marketplace. Over the years, we had discussed that we both felt that radiology groups would get larger and that we would see national radiology groups, in the future. The question was never whether this would happen—but rather, when. I think that the answer is either soon or now.

Many leaders of great companies feel that one of the key reasons that they were successful is that they were in the right place at the right time. Now appears to be that right time, for radiology groups. You can see, in the survey’s results, that many groups are greatly increasing in size. How are they doing this? Mergers are the main method, because many groups are not replacing radiologists as partners retire. Productivity increases are allowing the same groups to read more exams with fewer radiologists. The number of radiologists might not be the best measurement for the size of a practice, but it is a starting point.

Download the Results

In 2012, the 100 largest groups represented 4,602 radiologists, and the 20 largest groups represented 1,504 radiologists. In 2013, the 101 largest groups represent more than 5,000 radiologists (a 9% increase), and the 20 largest groups represent more than 1,700 radiologists (a 13% increase). The average group in the top 20 has more than 85 radiologists.

It appears that the drive for size is real. We hear groups talk about the need to reach a size of about 250 radiologists in order to provide 24/7 subspecialty interpretations. These groups see the advantages of size, allowing them to focus time and resources on the service and quality measurements that are being promoted in the marketplace. There is little doubt that the bar has been raised. The great groups will step up to the table.

We also are seeing many mergers of groups of 10 to 50 radiologists that will be completed in 2014. As these groups walk through the process, it is apparent that there are many synergies and cost savings available.

We continue to be very optimistic about the future for private radiology groups. Leadership will be one of the keys to success. Consider looking into the ACR Radiology Leadership Institute, if you have not done so already. Thank you for your participation in the survey.

Joseph P. White, CPA, MBA, CliftonLarsonAllen, CPA Consultants and Advisors

The consolidation trend gathered steam in the radiology private-practice sector in 2013, a year in which the average and median sizes of the nation’s largest private practices increased from 46 (in 2012) to 50 and from 40.5 to 42, respectively. Administered by CliftonLarsonAllen and Radiology Business Journal, the sixth annual survey also reveals that the growth was fueled by the very largest practices (those with more than 65 FTE radiologists), with relatively insignificant median growth seen in the smaller-practice cohorts.

Financial information submitted by the practices is confidential, so the criteria used to rank them were number of FTE radiologists and (if two practices had the same number of radiologists) FTE employees. We included 101 practices this year because the three smallest practices all had 29 FTE radiologists.

The Web-based survey was made available to readers of Radiology Business Journal and, and an effort was made to rank all practices in the United States by gathering data from practice websites and soliciting input (via telephone) from practice representatives. The names of those practices that did not confirm their information are printed in light blue (see table), and their rankings are likely to be undeservedly high because they are ranked by total (not FTE) radiologists.

We welcome your assistance in getting us closer to a complete, accurate list. Our smallest practice had 23 FTE radiologists in 2012. This year, the smallest practice had 29 FTE radiologists.

In 2013, there was continued attrition in the number of employees in all practice cohorts (except those with 50 to 65 radiologists); this is likely to be a response to persistent reimbursement cuts. We also saw revenue per FTE employee increase in practices with fewer than 49 radiologists, but decline in the larger practices, which employ three to five times as many people as the smaller practices.

With imaging-center ownership