October 06, 2020

ACR RFS Virtual Economics Journal Club Synopsis: Effects of COVID-19 on Academic and Private Radiology Practices

Synopsis prepared by Madison Kocher, MD, a radiology resident at Medical University of South Carolina, and Ben F. Comora, DO, a radiology resident at Einstein Healthcare Network.

Moderator: Mohan Narayanan, MD

Panelists: Mahmud Mossa-Basha, MD, and Kim Asher

Mahmud Mossa-Basha, MD

Dr. Mossa-Basha is a neuroradiologist and chief of radiology at University of Washington NWH Medical Centers. He is an associate professor of radiology at the University of Washington School of Medicine.

Ms. Kim Asher

Ms. Kim Asher is a former radiologic technologist, and now chief operating officer of Memphis Radiological PC, a multispecialty practice of more than 50 radiologists. She is also president of the Tennessee chapter of RBMA.

Combatting Losses From COVID-19

Private Practice Perspective

Ms. Asher’s practice leadership met in January to discuss possible scenarios and strategies and immediately reduced partner salaries. They discussed possible options if someone were to get sick and the immediate installment of home workstations. They found that the key was to reduce or eliminate small expenses quickly and modeled hypotheticals to plan accordingly.

Academic Perspective

Dr. Mossa-Basha’s institution implemented a multi-tiered approach, including elimination of graduation/holiday parties and eliminating funding for food/drinks at events. The hospital implemented incentive freezes, in addition to freezing of capital expenses. The radiology department eliminated locums shifts for attendings and consolidated the extra hours of coverage into normal and extended clinic coverage. Like the private practice model, they also modeled out estimates of financial losses and tried to cut accordingly. The hospital system itself expected all of the departments’ budgets to be cut by a certain amount and expected departments to adjust accordingly.

Making Contingency Plans

Private Practice Perspective

Private practices always have the option of increasing line of credit, but it would be at the detriment of partners’ paychecks. Keeping salaries low maintains capital throughout the year as a contingency plan, and at the end of the year the unused capital is divided up throughout the practice.

Academic Perspective

In academia, the hospital itself maintains reserves and manages them as needed. It differs from private practice in that faculty salaries cannot be changed and all of the staff are hospital employees. Each crisis is different and going forward each will have to have a unique approach, hence one contingency plan will not suffice. It will always be difficult to anticipate another crisis like this and how it will affect each practice setting or revenue source.

Navigating the Job Market

The financial losses incurred by many practices may make a private equity firm buyout more appealing to partners. However, private equity firms approach private practices with large, leveraged buyouts, and place the leveraged debt on the practice to sell later for profit. Although the private equity firms can bring benefits to the struggling practice, there is concern for long-term viability. When searching for a job, understanding the corporate model is important but making sure the community is being protected should be the priority. Patient care shouldn’t be sacrificed for the sake of numbers. Radiology will continue to be a pillar of the medical community and even if the job market is affected in the short-term, it will be followed by an equivalent resurgence afterwards.

Planning a Recovery

Overall, the recovery of study volumes is specific to each institution and study modality. For example, while August was above 100% baseline in certain modalities for some private practices, other study modalities are still struggling. Mammography, one of the larger producers of RVUs, was hit the hardest.

Future E&M cuts will be a major factor moving forward with 11% reductions, and while many financial mitigation strategies will be permanent, the job market is still promising. Residents and fellows should not be discouraged and although many changes will be long-term, radiology is still a strong, resilient field.

If you are interested in learning more, please listen to the entire webinar found on the ACR RFS Journal Club page.