Why in the world would two radiology practices competing for business in the same market consider sharing market information, revealing operational and performance data and—most counterintuitively of all—combining forces and resources in a joint venture (JV)?
The short answer is because they need to. Healthcare providers are living through a time of unprecedented, and irreversible, belt tightening. From bundled payments to pay-for-performance to endlessly ebbing reimbursement rates, the economic squeeze is on.
And radiologists are not exempt.
Some of the most forward-looking practices are choosing the “JV” option as a proven way to unite, conquer and arrive at a place of sustainable independence. Independence, of course, goes hand in hand with nimbleness, a must in times of such sweeping change. And the JV strategy gives its member groups the larger footprint they need to not only matter in their market but also influence its direction.
Add to that the fact that the radiologist groups’ resilience is often so much better for the hospitals and integrated delivery networks (IDNs) with whose missions the groups must align. It’s better for the referring doctors they serve, too. And—perhaps most crucially in a world where healthcare consumers increasingly shop around—it’s better for patients.
Should your radiology practice collaborate closely with a group of like-minded radiologists to secure your independence? Quite possibly. But before you charge ahead into the brave new world of the radiology joint venture, you would do well to consider a few observations I’ve made as a JV facilitator.
Strength in numbers
First, a bit of background. The business of which I am CEO, Integrated Medical Partners (IMP), began gauging interest in JVs among radiology practices with whom we had a commercial or professional relationship around three years ago. From those discussions, we developed a JV model unique to the industry and comprehensive in scope. Then we made it one of the linchpins of Integrated Radiology Partners when we launched IRP in May 2014.
Since then, the response to our joint venture (JV) model has been overwhelmingly positive. We are now guiding and advising numerous radiology practices, in markets spanning both coasts, that are talking strategy with their hospital and IDN customers. The hospitals want to know how the radiologists will step up their levels of service as consolidation continues and dollars dive. The radiologists with full JV strength behind them are able to promise, and deliver on, not only better clinical coverage but also business analytics and leadership.
The groups most interested in adopting IRP’s JV model typically range in size from 10 to 30 radiologists. Some larger groups have been inquiring as well, but the response within the small and midsize range has been especially enthusiastic. Within that cohort, it’s not an overstatement to say that interest in our JV model is snowballing.
Another sign of the gathering momentum is the growing number of calls we’re getting from specialties other than radiology. Many hospital-based medical professions are seeing the win-win benefits of a well-thought-through JV model. They like having a viable alternative to selling their practice to a hospital or being acquired by a commercially run management entity.
At IMP, we think this is a very good development for U.S. healthcare. The big data that could be made available to the hospital system via multispecialty JVs can only help as our system moves toward accountable care, population health and patient-centered care.
Survive, thrive and play to win
The cost to get in on the JV action varies by practice size but generally runs around $5,000 per radiologist per year. What’s the return? A shared opportunity for the JV members to come together and provide a rich trove of information that, when crunched for informatics and analytics, allows them to report on patient care with an emphasis on outcomes.
Prior to entering into a JV, most of the groups with whom we’ve worked were using business systems that only tracked operations and finances. Typically these groups don’t have the size, scale or wherewithal to invest in systems that allow them to really play in outcomes-based reporting. And now, given the scale the JV move has brought to bear on their behalf, they are providing their hospital customers with analytics and informatics capabilities that dramatically differentiate the hospitals from any others in their respective