Every radiology practice model has its own characteristics, benefits, and disadvantages. And each provides radiologists with a range of practice experiences. A radiologist working in a small practice in rural Wyoming, for example, is going to experience a much different kind of environment than a radiologist working in a medical center in Boston or New York.
Through interviews with representatives of various practice sizes and models, Radiology Business Journal offers a window into radiology practice in 2016. Practice leaders provide a sense of how different models operate—and succeed—in today’s challenging healthcare environment.
The large private practice
Advanced Radiology is a large practice headquartered in Baltimore. As of July 1 of this year, the practice will have 98 radiologists serving 31 imaging centers and seven hospitals in five contiguous counties in Maryland. It appears at number seven on RBJ’s 2015 ranking of the 100 largest private radiology practices.
Advanced Radiology has a rather unique business model. In addition to providing consultative services to seven hospitals, it partners with RadNet, a national operator of freestanding medical diagnostic imaging centers, to operate 31 freestanding imaging centers, previously wholly owned by the practice. So, while Advanced Radiology provides the medical services, RadNet owns the technical piece. “We provide the service at these imaging centers with long-term service agreements,” says David Safferman, M.D., practice president and CEO. “It’s a hybrid model. We don’t have the technical piece, but we’re also not employees. We have our own governance and make our own decisions about how the practice is run. So we have our independence.”
Why the decision to follow this model and remove the technical piece from the practice? “It takes a lot of capital to make these kinds of technical investments,” Safferman says. “When you are part of a large group, not everyone is comfortable or has the same willingness to make those investments.”
Safferman points out that if a practice the size of Advanced Radiology owned its technology, it could be prohibitively expensive for new radiologists to buy into the practice. And by foregoing the technical piece, Advanced Radiology doesn’t have to manage the employees working at the various imaging centers, or set their salaries. In fact, the practice has zero full-time equivalent employees.
“Doctors aren’t the best at operating the business structure of a practice,” Safferman notes. “It can be hard to run a business and be a group of physicians. If you have to raise capital how are you going to do it? Go to the physicians? Go to a third party or a bank? How are you going to stay on the leading edge of technology? How are you going to stay competitive? You have to have a group of like-minded, entrepreneurial physicians, and the bigger the group gets, the harder that may be.”
“We don’t have that burden,” he points out. “We have a very competent business partner who does this as a business in our market.”
The major disadvantage of such a model is a loss of autonomy, Safferman acknowledges. While the practice’s physician leadership and RadNet work hard to be on the same page strategically on issues like purchasing new technology, “we don’t have the final say, and sometimes we may not get exactly what we want.”
Yet, “we’ve been fortunate that we often do well in getting state-of-the art equipment and the newest technology,” Safferman notes. For example, Advanced Radiology was the first in its market to bring in digital mammography and is moving forward with 3D mammography.
“There are few practices that do more women’s imaging than we do in a year based on volume,” he said. “And we’ve been able to stay on the leading edge.”
The sheer size of the practice also has advantages and disadvantages. One obvious advantage is the practice’s ability to subspecialize. There are other advantages as well, Safferman says. For example, Advanced Radiology is able to leverage its size to go with a self-insured health plan, get institutional pricing on disability and long-term disability insurance and negotiate group discounts on long-term health care.
One disadvantage is that the size of the group makes it difficult for physicians to see each other on a regular basis. Whether it’s through e-mail, or quarterly group meetings, dinners and other events, Safferman said the practice tries to establish a sense of collegiality across a practice that covers a pretty broad geographic area.
At the same time the ability of the practice to subspecialize means that it is able to break down into small cohorts such as a women’s imaging group, a musculoskeletal group and a nuclear medicine group. “We start to be structured a little bit like how an academic group would be structured,” Safferman says. “Those cohorts form smaller groups within the bigger group and often interact with each other on a daily basis. So you have a small-group feel in a larger group.”
The medium academic hybrid
University Radiology was founded in 1984 as a an academic radiology practice in the sense that it practiced at the University of Tennessee Medical Center and derived 100% of its revenue from the medical center.
Beginning in the first years of the 21St century, the practice, according to Michael Langeberg, executive director, has followed a strategic plan allowing for growth and expansion beyond the medical center. A practice that in 2004 consisted of 11 radiologists and restricted itself to its base of operations at the university, now has 27 radiologists and covers four other rural hospitals and two imaging centers.
“We have expanded from something that was purely an academic practice to one that is clearly a hybrid practice with a number of practice sites,” Langeberg says. “However, the UT Medical Center is still the mother ship of the practice. Our name is still University Radiology and we haven’t divorced ourselves from those roots.”
The shift from a purely academic practice was the result of some severe competitive pressures University Radiology faced in the early 2000s. According to Langeberg, at that time the practice was subject to some significant turf losses. Specifically, he says, the practice began to lose peripheral angiography business to vascular surgeons and nuclear cardiology business to cardiologists.
“The group was starting to feel very vulnerable just having its one center of operation,” Langeberg explains. “And while we haven’t sustained other major turf losses, at the time—having just lost seven figures of revenue from those two sources alone—we felt the need to grow and diversify. We’ve continued to look at expansion opportunities in terms of providing a bigger, more desirable practice and one that is able to invest in more robust IT or more robust customer service initiatives and to keep the radiologists we already have—and attract others.
The biggest challenge facing a practice like University Radiology “is simply the multiplicity of missions, which holds true for academic medical practices in general,” Langeberg believes. “There is the clinical mission, a research mission, and an education mission to teach residents and future physicians. So we have to be strong and accountable in those areas, and when we grow the practice outside of the academic medical center, we have to be sensitive to those needs of the practice as well.”
So, while the practice continues to look for growth opportunities, they must make sense. “We try to be strategic about our growth,” he says, which means avoiding opportunities for growth that compete with its primary missions, but pursuing opportunities that, for example, add the infrastructure needed to recruit a radiologist with a certain research interest, or provide patients within the practice’s geographical area with access to higher-end imaging or interventional services they otherwise wouldn’t have.
The changing healthcare environment and the shift from volume- to value-based reimbursement models is also affecting University Radiology’s
growth strategy, Langeberg says. “We’re trying to reach that critical mass where we can afford a lot of infrastructure and systems investment, things that are going to be necessary to comply with quality standards going forward.”
In fact, Langeberg says, the practice has a contract in place with one hospital that brings in a very small percentage of group revenue based on meeting certain quality performance metrics. “So we’re inching in that direction and getting ourselves as prepared as possible for a jump from volume to value,” he shares.
As for the physicians who work for University Radiology, Langeberg points out that “while it’s not for everybody,” it does offer physicians the opportunity to work in an academic, teaching environment if they are so inclined, or to work exclusively in a private setting or as community radiologists.
“I think the opportunity to practice in both academic and private settings can be appealing to radiologists,” he says. “You get the best of both worlds.”
The small private practice
Northeast Missouri Imaging Associates is a small hospital-based practice located in Hannibal, Mo. Founded in 1991, the practice has four radiologists who provide services for four hospitals, two physicians’ practices, and one mobile X-ray company.
The advantage of having such a small practice?
According to Brandon Selle, practice administrator, it enables the practice and its radiologists to establish personal relationships with each of the facilities it services.
“We’re small and they’re small,” he says. “They would be a small fish in a big ocean if they were dealing with a large radiology group, so they mean a lot more to us as far as portion of volume is concerned. If you’re dealing with a larger group, you might have to credential 50 or 100 radiologists—we only have to credential our four and about six teleradiologists to cover night reads.”
A small practice also is more nimble, Selle says, pointing out that problems are dealt with immediately, whether they involve IT, hospital administrators or even the group’s physicians. The need to be nimble, however, means radiologists must travel to the practice’s different sites on a regular basis, which is somewhat disadvantageous when it comes to lifestyle.
“Each of our radiologists need to handle whatever comes up, whether it’s a picc (peripherally inserted central catheter) line after hours, or a neuro study that needs to be read,” Selle says. “Our radiologists need to be interchangeable. We need to be the kind of old-fashioned generalists, and not all training programs produce those kind of radiologists any more.”
Recruitment, therefore, can be a challenge, Selle says. At the same time, he has found that many radiologists like the kind of interpersonal relationships that develop between them and their fellow radiologists, referring physicians and patients in a small practice like Northeast Missouri Imaging.
“They’re not just sitting in a room somewhere every day reading studies,” Selle says. “They’re seeing referring physicians who are rotating through the department, or are out doing procedures or interacting with the technologists and the patients.”
When it comes to recruiting for the practice, Selle reports that some radiologists simply are ready for a different lifestyle. “We’re starting to find that those radiologists who have been in practices where they are just reading nonstop to the keep the volume up are looking to get away from that,” he notes. “They want a slower-paced, more well-rounded practice.”
That includes subspecialists, Selle says, pointing out that the practice has fellowship-trained radiologists who have gotten to the point where they just don’t want to read the same image (a breast image, for instance) all day, but instead welcome the diversity of a general practice.
Like most radiology practices, Northeast Missouri Imaging has been adapting to challenges such as reimbursement cuts and what Selle refers to as “teleradiology firms with their million dollar marketing budgets.” “It really has pushed us into our niche,” Selle says. “We have adapted to be more like the Imaging 3.0 practice in that we want to be the doctor’s doctor.”
For example, the door is always open to Northeast Missouri Imaging Associates’ reading rooms for those rotating physicians coming through the department. It’s also highly likely that if the physician has a question, the radiologist who read the study is going to be sitting there or immediately accessible by phone.
“The physicians know us and know they can always get a hold of the radiologists who read a study or was highly involved with a patient’s care in some way,” Selle says. “And this really helps our relationships with the medical staff.”