Radiologist–Hospital Alignment: Destabilization, Discord, and Accord

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In March 2010, Sutter Health announced plans to sever a contract, in place for nearly a century, with Radiological Associates of Sacramento in California. Under its terms, the group had served five Sutter Health hospitals in the region. The previous year, Mercy Health Partners suddenly let lapse an equally established handshake agreement that it had maintained with Consulting Radiologists Corp to cover four hospitals in the Toledo, Ohio, area; a corporate provider of imaging services was brought in as a replacement. In 2008, Florida Hospital in Orlando announced that it would not renew its contract with a radiology group that had served it for 40 years. The group’s radiologists were instead offered employment at the hospital; two-thirds of these physicians subsequently joined the institution’s ranks, and the group disbanded.

These incidents represent just a few examples of meltdowns in long-standing relationships between radiologists and hospitals. The emergence of national teleradiology companies and the movement toward an accountable-care organization (ACO) model have brought to bear new options for hospitals, in outsourcing radiology coverage and in employing radiologists alike. Many radiology groups are grappling with how to remain independent while simultaneously meeting the needs of their clients.

Richard Townley is president and CEO of AGI Healthcare Group, a consulting organization that assists health systems, hospitals, ancillary-service providers, and radiology groups in executing initiatives for cost reduction, productivity improvement, and revenue enhancement. He says, “The industry, as a whole, is struggling mightily with physician–hospital alignment as never before. Radiologists have one set of priorities, and hospitals—the big hammers looking for nails—have another. It is not an entirely pretty picture. ”

Issues Spark Destabilization

Several general issues appear to be sparking a destabilization of radiologist–hospital relationships. Cynthia Sherry, MD, FACR, chair of the department of radiology at Texas Health Presbyterian Hospital Dallas, believes that a lack of understanding about expectations and priorities heads this roster. She says that some radiologists do not fully comprehend the increasing importance of going the extra mile to satisfy the service expectations set by hospitals, administrators, and referring physicians.

Rather, these radiologists continue to operate under the mindset that they are the only game in town—and, therefore, secure in their relationships with the hospitals that they serve. Similarly, younger practitioners, in particular, place great emphasis on the work–family balance and assign it a higher priority than fulfilling hospitals’ requirements—sparking tension that only widens the chasm.

Sherry headed the 10-member ACR® task force on relationships between radiologists and hospitals (and other health-care organizations), which published its recommendations¹ for strengthening radiologist–hospital alliances in 2010. She says, “Replacing radiologists for hospital imaging services has, until fairly recently, been a challenge. Today, however, hospitals have so many sources for imaging services from which to choose that if one group is not up to par—for any reason—removing it and bringing in another is not a big deal.”

Sherry adds that inadequate radiology-department leadership is a factor as well, with radiology departments, in many cases, being unable able to cultivate leaders who can effectively communicate with hospital administrators. Some are willing to make few, if any, concessions to hospitals and would rather dig in their heels than adopt a cooperative stance. Others have members who refuse to follow their leaders in allying themselves with the hospital on a given issue.

The Flip Side

There is a perception among radiologists that certain hospitals fail to respect the quality of the interpretation services they provide, viewing them, instead, as a commodity. Hospitals’ inability or refusal to subsidize radiologists’ salaries comes into play here as well.

Timothy Stampp, MBA, serves as chief of corporate development at Medical Imaging Specialists (MIS), a consulting company for which radiology groups are half (or more) of the client base. “A considerable push behind the breakdown comes when hospitals want radiologists to work in their facilities and subsist on what they have collected from payors and patients—despite the added value of their services. Radiologists