Envision Healthcare purchases Sunshine Radiology, continues consolidation

Envision Healthcare has purchased radiology practice group Sunshine Radiology, which provides radiology services to nine hospitals in the Tampa Bay, Florida, area. Consolidation in radiology is picking up steam due to the increasing demands of quality-based reimbursement and the value provided by economies of scale.

In fact, Envision Healthcare is the product of consolidation through a December merger with fellow provider AmSurg, illustrating how healthcare companies are can look like Russian nesting dolls.

Sunshine Radiology will add 35 diagnostic and interventional radiologists to Envision’s Florida operations, which provide radiology services to 80 healthcare facilities across the state.  

“Our group is excited about joining one of the nation's top hospital-based radiology providers, bringing enhanced strength for growth and excellence in service to our health system partner and its highly regarded facilities,” said David Rippe, MD, a founding partner of Sunshine Radiology.

Consolidation is a growing possibility for many independent radiology groups, as a steady decline in Medicare reimbursement has made it harder to turn a profit. The specialty is starting to resemble the airline industry in its first century; a vast pool of independent service providers coalescing into a few relatively standardized options. While radiology hasn’t quite reached the concentration that major U.S. airlines have—the top three airlines account for 80 percent of passengers—radiologists still in private practice should brace themselves for mergers and acquisitions, according to Howard Chrisman, MD, professor of radiology and surgery at Northwestern University's Feinberg School of Medicine.

“From a system perspective, alignment is necessary to create a continuum of care, and on the diagnostic imaging side, you don’t want disparate quality and protocols,” Chrisman told Radiology. “Cost is increasingly important and needs to be standardized. The best way to do that is to have a single group of diagnostic radiologists.”

In addition, offering subspecialty expertise has become an increasingly large selling point for radiology groups clamoring to set themselves apart. Hospital clients prefer the simplicity of in-house sub-specialty reads and it can motivate larger physician groups to absorb smaller ones.