A report on the first annual list of the 20 largest radiology-services companies
Buffeted by many of the same high winds whipping health care at large, the radiology segment known as teleradiology is undergoing significant change, according to research conducted for Radiology Business Journal’s first annual report on the 20 largest radiology-services companies. In response to downward pressure on price, to regulatory change, and to market opportunity, many of the largest providers of remote radiology interpretations are working to reformulate themselves as full-service providers of professional radiology services.
Smaller companies, instead, are targeting specific regions, subspecialties, and delivery sites. Companies on both the upper and lower ends of the size range are providing a significant number of final interpretations, compared with the number of preliminary interpretations on which teleradiologists cut their teeth.
Initially, Radiology Business Journal intended to rank the companies by number of FTEs. Because we encountered a good deal of reluctance from the companies that we sought as participants (and only half of the companies on our list self-reported their data), we decided to present the list in alphabetical order. We also observed widespread sensitivity to the term teleradiology; therefore, we opted to use the broader term, radiology-services companies, which better reflects the breadth of this segment as providers of professional services evolve.
In fact, this evolution is so marked that the term teleradiology might be facing extinction. “That might be nomenclature that is no longer applicable,” according to Nick McClure, a health-care consultant recruited by Alliance Imaging (Newport Beach, California) to oversee the divestiture of a teleradiology company that it purchased in 2010 (Radiology 24/7).
The Web-based survey was made available to readers of Radiology Business Journal and ImagingBiz.com. It also was promoted to an internal list of teleradiology and radiology-services companies gathered through Internet and telephone research. We defined radiology-services companies as providers of remote and on-site interpretations, excluding private practices (which are included in our annual ranking of the 100 largest private radiology practices).
Our intention, with the first annual list, is to initiate an annual report on this segment of the radiology marketplace; therefore, we chose to include each company that reported its data and met the definition of a radiology-services company. We did not include several large companies with websites that report neither the number of their professional staff members nor their names. Many private (and several academic) practices submitted data, but were not included in this report because they did not fit the definition of a radiology-services company.
The Patient Protection and Affordable Care Act, reimbursement cuts, and new place-of-service regulations from CMS are all causing hospitals, radiology private practices, IDTFs, and other customer groups to reassess how they are accessing professional radiology services, according to two observers of the teleradiology marketplace. “It’s not clear whether radiology will continue to be a revenue center or will become a cost center, depending on what happens to the health-care system,” McClure says. If accountable-care organizations proliferate and choose to bid out services, then radiology could be considered a cost center—which would favor low-priced providers, McClure observes.
In the hospital setting, radiology services fall somewhere between a cost center and a revenue center. While hospitals see the technical portion of radiology as a revenue center, there is a growing sentiment that professional services are a cost center.
“Hospitals have increasingly tried to get out of the professional side,” he reports, “separating out the billing and sometimes billing globally, but wanting to push that off to someone else. There’s a squeeze there as to who is going to take the haircut, I think.”
Increasingly, hospital executives are unwilling to pay the subsidies that radiology practices have earned to cover preliminary night interpretations by teleradiology companies, the trade’s traditional business. As a result, practices are rethinking how they are handling night interpretations.
“Hospitals are decreasing or eliminating the subsidies they were