Radiology’s new normal is an ongoing perfect storm of business pressures. Faced with the constant need to navigate swim-or-sink waters roiled by bundled payments, pay for performance and other models of financial risk-sharing—not to mention declining reimbursement, increased regulatory oversight and transparency on pricing and quality—forward-thinking practices are partnering with their competitors in new joint venture (JV) models.
Creating a larger footprint through a JV collaborative model is a viable way for radiology groups to band together to align with the mission of the hospital or hospital system they serve, said Curtis Kauffman-Pickelle, president and CEO of The Kauffman Group and publisher of ImagingBiz. In so doing, the practices can find “a new way to win in an increasingly complex environment. And by win I mean really more than just surviving. How do you thrive in this environment? How do you build a successful organization?”
With that Kauffman-Pickelle kicked off a Sept. 17 webinar, “A New Model for Radiology Collaboration.” Kauffman-Pickelle moderated the session and was joined by Bill Pickart, CEO of Integrated Radiology Partners, a Milwaukee-based firm that coordinates and facilitates JV formation, and Scott Luchs, MD, president of Ramapo Radiology Associates in New York State’s Hudson Valley and a co-founder of one such JV collaboration, Empire Health Support Services.
Pickart said the new JV model for radiology collaboration has been configured to set up radiology group practices for independent, long-term, sustainably profitable growth. He added that the model is radiologist-driven, enabling independent radiology practices that have traditionally vied for market share within a geographic territory to “bring forward innovative clinical, business and analytics solutions to their hospital system clients.”
“These practices will position themselves as a value-added strategic partner,” said Pickart, “deserving of a seat at the table when policy, reimbursement, clinical and practice-business decisions are made.”
Lower costs, higher performance
By collaborating on a non-competing basis, and utilizing a collaborative framework such as the one IRP has developed, independent radiology practices can gain the scale and resources necessary to fulfill the expectations of their hospital-system customers, said Pickart.
He said the JV collaboration model promotes “the ascendancy of the practice and JV partner practices to the highest stage of optimization: that of a completely integrated entity—JV group to group, JV to hospital system and JV to outside constituencies, whether they be payers, patients, the government or other intermediaries.”
Breaking down how the JV collaborative provides for the securing of revenue-cycle management (RCM) performance needed for survival and success, Pickart explained that the collaborative delivers technology solutions that promote high efficiencies, leverage cross-group radiology expertise and capacity, and, through shared analytics—a mandatory requirement in joining a JV—promotes care coordination and system integration and interconnectivity.
The cost of creating and forming such a JV is relatively low, Pickart noted. “Our experience has been that the cost of getting in run somewhere in the neighborhood of $2,000 to $5,000 per radiologist for most JVs on an annual basis,” he said. “Once it’s structured, it’s possible that those costs could be deferred or offset by revenues realized by the JV, as well as cost reductions brought to bear through the consolidated scale of purchasing power through a management service organization.”
Pickart said the JV often stands to receive benefits of scale, which come in the form of lower costs and higher performing services not only in mandatory analytics and informatics but also revenue-cycle management, distributed imaging, strategic positioning and consulting, clinical workflow consulting and GPO cost-savings opportunities.
In addition, he said, JV collaboration can position a pressured radiology practice to:
- thrive as an independent practice;
- present differentiating metrics and informatics;
- secure access to cutting-edge technologies and systems;
- deliver on hospitals’ desired value propositions;
- take control of the enterprise imaging ACO strategy;
- leverage scale to reduce costs and capital outlays;
- improve group efficiencies; and
- move ahead with new business development.
“This is a call to action to you and to other practices like yours,”