Jannette Collins, MD, MEd, FACR, director of medical content, MRI Online and editor of Seminars in Roentgenology, contributed this post.
In radiology, corporatization refers to the corporate radiology groups that provide hospitals with specialty radiology services and 24/7/365 radiology interpretation via on-site services and teleradiology. The radiologists are employees and receive salaries and benefits determined by the corporations, which, in aggregate, employ thousands of radiologists and operate hundreds of imaging centers across the country.
What can a large corporate entity offer to private practice owners and managing partners?
Let’s start with the good:
- Access to centralized resources (such as access to capital, administration, recruiting, contracting, nighttime support, advanced technology, lower malpractice insurance rates, and sharing best practices)
- Better positioning to participate in population-based care, alternative practice models, and federal and private payer value-based payment programs
- Ability to subspecialize
- Greater market power and leverage when negotiating payer contracts
And the bad:
- With acquisition comes relinquishment of control and decision-making to a remote group of owners/investors whose primary allegiance may emphasize profitability over patient care
What can it mean for partners of private practice groups that are bought by a corporate entity?
The group can still offer partnership, which may mean owning a share of the group’s assets if they own equipment, and/or it may mean owning equity in the larger corporation. Partners can be eligible for elected and appointed leadership positions locally and nationally at the corporate level. However, although salaries for those on the partnership track may not change, full partners generally see a drop in salary, which could be substantial after a buy-out/partnership with a corporation.
Large groups are attractive to some radiologists, especially those more recently finishing their training who value flexibility, stable salary and other lifestyle considerations over practice ownership. However, younger radiologists may be more apprehensive of corporations.
A recent survey of over 600 early career radiologists found that 86% believe that corporate entities harm radiology as a specialty. And another 83% said they’d prefer to work for an independent practice, rather than one owned by a corporation. Many are worried about a national chain “gobbling up their workplace, driving down salaries and prioritizing profit over patient care.” They don’t want to work in any system in which “executives, non-physician administrators and public stockholders are reaping the financial rewards of radiologists’ work output.” They’re also frustrated that when they interviewed with a provider, they were not informed about merger and acquisition talks occurring behind the scenes. Some say that when asking interviewers about plans for acquisition, these plans were hidden, often because of nondisclosure agreements during negotiations of an acquisition.
Shifting payment models, hospital consolidation, new technological and data analytic expectations, and heightened competition have altered the longstanding status quo for many independent groups around the country, and in response, the opportunity for physician shareholders to align with a partner through mergers, acquisitions, or private investment has become more compelling.
Many private practice groups are in trouble, and corporations are offering a solution. Is there a better solution? Can radiology groups work in partnership to come up with alternative solutions? Or — as the prevailing sentiment of my social media feed might suggest — will corporatization of radiology be the downfall of the specialty? Will corporate groups survive? Only time will tell if corporatization in radiology is here to stay.
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