Cleveland Clinic: Thriving in Today’s Consolidating Radiology Market

Cleveland Clinic entered the rapidly consolidating world of radiology in 2016, developing strategic partnerships and mergers with independent radiology groups, and hasn’t looked back since. The health system reported revenues of $8 billion in 2016, a jump of almost 12 percent, and 11 percent of that revenue came from its radiology arm, the Imaging Institute.

Some within the imaging industry were shocked at first by Cleveland Clinic’s move into radiology, but Gregory P. Borkowski, MD, chairman of the Imaging Institute, explains that the system is simply living up to its belief that every life deserves world-class care. Imaging affects almost every other aspect of healthcare, he says; to improve the overall quality of care, one has to get involved at the ground floor. By partnering with Cleveland Clinic, Borkowski adds, independent groups have the opportunity to provide the best care possible while remaining relevant in today’s increasingly competitive radiology marketplace. “As consolidation in radiology accelerates, Cleveland Clinic continues to find ways for a physician-led culture to proliferate that benefits patients, health systems, referring physicians and the radiologists themselves,” he says.

There are a number of differences between Cleveland Clinic and other organizations actively rolling up radiology groups. For instance, Borkowski says, their model of care has provided stable growth for more than 90 years. What started in 1921 as a four-person group practice is now home to more than 3,200 physicians, including more than 200 radiologists, and they provide service for more than 110 facilities throughout the United States. Instead of wanting to simply absorb smaller companies and move on, Cleveland Clinic wants to make a significant impact on all of its practice partners, setting them up not for short-term financial gain but for long-term sustainable growth. And with its ability to provide academic level care at scale, they have the resources—and the know-how—to help practice partners transform, innovate and continue to provide high quality care without worrying about running out of funding or getting overwhelmed by the demanding market.

Interestingly, as consolidation proceeds and radiology groups continue to be absorbed by publicly traded, private equity- or venture capital-backed radiology groups, there seems to be little appetite for simultaneously digesting imaging center operations on behalf of these firms. Independent groups that serve hospitals and also have an ownership interest in outpatient imaging centers have thus far had limited options. Cleveland Clinic, however, remains very interested in the technical side of the business and has entered into creative structures with both radiology groups and entrepreneurial-owned imaging centers through various transaction forms, including outright acquisitions, affiliations, mergers and joint ventures.

The system’s leaders know that it may be relatively harder to compete in today’s radiology market than in years past, but it can still be very profitable if you have the capital, experience and discipline to do it well. “Running technical operations in today’s environment, whether it is acute care or freestanding outpatient imaging centers, can still be very profitable particularly when it is physician led,” says Joe Parker, administrator of the Cleveland Clinic Imaging Institute. “Through focus on the cost per exam, delivery of subspecialty reads and patient experience, there is still tremendous room for growth.”

As radiology and healthcare continues to evolve there still are many groups that prefer to remain independent and yet still desire an element of transformation. In such an instance, the radiology group and Cleveland Clinic can create an affiliation which allows the group to retain a separate identity but work collaboratively together. The Imaging Institute can provide subspecialty nighttime coverage, help to implement regulatory and quality programs, assist with structured reporting, provide on-demand remote consults, etc. In turn, this type of partnership can eventually lead to discussions with the group’s hospital about ways to increase revenue and profit through Cleveland Clinic’s technical management programs. By implementing advanced technologies, streamlining management infrastructure, optimizing workflow and asset allocation, working with providers to reduce costs or providing medical physics services Cleveland Clinic is eager to share its experience to help solidify a radiology group’s contract and simultaneously improve a hospital’s operations and financial performance.

Carl R. Martino, MD, Cleveland Clinic Regional Radiology, has experienced the benefits of partnering with the health system firsthand. Martino served as the chairman of Radiology Imaging Services Inc. (RISI), a 19-radiologist group that had provided reads to Ohio’s Akron General Health System for more than four decades. RISI had a sterling reputation, but around 2014, declining reimbursements and increasing demands for 24 x 7 x 365 subspecialized coverage started to take a toll on the group. Martino and his colleagues needed change before the situation became more challenging—and that’s where Cleveland Clinic came in.

RISI merged with Cleveland Clinic in January 2015, drawn to the system’s stability and patient-centered business model. RISI’s radiologists received improved compensation, in addition to other generous benefits, while Cleveland Clinic’s deep bench and high operation standards helped reassure referring physicians that their coverage would not suffer as a result of the change. By Q1 2016, RISI’s procedure volume had increased 16 percent, the hospital’s imaging margins were up by more than 25 percent and operating revenue had increased more than 30 percent compared to Q1 2014. “After joining Cleveland Clinic, we are a much stronger group,” Martino says. “We are now very well positioned for the future and can focus exclusively on delivering world class care.”

For Cleveland Clinic, it all comes back around to that central belief that every life deserves world-class care. It’s why they first went into business back more than 90 years ago, it’s why they entered the radiology market in 2016 and it’s why they continue to push forward in 2017 and beyond.

For further information contact Jeff Davies, Director of Growth and Outreach at Cleveland Clinic Imaging Institute, or visit