Radiology Bears and Bulls

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 - Curtis Kaufman-Pickelle
Curtis Kaufman-Pickelle

It is an article of faith for those who are active in the stock market that both bears and bulls can and do succeed and make money, as long as each approach is a decision based on a strategy. Bears are skeptical, cautious, hedging their bets against a rising tide that they see as illusory or unsustainable. Their mantra: “What goes up, must come down, and I will plan on how to win when it does eventually come down.” Bulls, of course, are optimistic, risk takers, certain that the same rising tide is going to continue its ascent. They expect to win all along the way and plan for how best to manage the growth. 

The conundrum is that both are absolutely correct. The art is in understanding when and how to be one or the other. Both strategies are valid at certain inflection points in the market. In order to succeed, however, neither will tell you that it is acceptable to simply do nothing. I think the same can be said for those trying to “bet” which way the radiology profession will change. An “educated” and circumspect caution is a reasonable strategy in an era of uncertainty, as is the overtly riskier strategy of accelerating the pace of internal change before any real or visible benefit has accrued to the organization. Both can win if the path chosen is a real strategy and not simply a “wait and see” non-strategy.  

As the very foundation and structure of the radiology profession continues to undergo tectonic shifts, the notion of floating along as if nothing is different—nothing has changed nor will likely change, just keeping one’s head down in the hope that these gale force winds will simply pass by without rocking our cozy reading room—is simply a formula for getting absolutely decimated. That said, if today’s radiology groups are cautious, skeptical about which way these changes are likely to break, then they should actively develop a strategy that will deploy their conservatism in ways that can take advantage of the changes. That is precisely how bears make money in a fluctuating market. Hedge bets, “shorting” certain investments, and other active strategies do well when those creating these strategies understand how to balance the risks within a well-thought-out strategy.

The essential difference between deploying an active strategy whose central premise is how best to take a practice’s natural cautionary ethos and, in a well-thought-out and methodical manner, take full advantage of the dynamic and fast-changing radiology market; contrasted with a head-in-the-sand apathy that is not a strategy at all, is going to be the difference between success and failure in radiology’s new world order. And make no mistake: This new order is here, and it is here to stay.

Positioning for success

Given this new order of things, how, then, does one define a winning strategy, and how does one know when it is working as envisioned? The point is that almost any strategy will position you for success. It is the pointed lack of a strategy that will result in failure.

Hoping that something will change for the better is not a strategy. Worrying on the sidelines and fretting in front of colleagues and staff is not a strategy. Complaining that referral sources, payors, legislators, regulators and other assorted stakeholders don’t understand or appreciate your value is not a strategy. Paying scant attention to the fundamentals of the business side of the practice and expecting it to just coast along is not a strategy. Taking your partners, your “product”, your market position and your customers for granted is definitely not a strategy.

A realistic strategy for today’s radiology practice can be based on either a bearish or a bullish viewpoint. Both will rely on aligning each of the practice’s shareholders around a vision of how to leverage reputation, quality, service and value proposition in a way that differentiates the group from the mediocre and ordinary. Both will have alternative action plans ready to deploy based on emerging opportunities. 

One might think that the worst is yet to come and that extreme caution is in order, precious resources are to be carefully managed and that certain alliances might be explored for potential synergies. The other might think that only by actively embracing the risks inherent in market consolidation and commoditization can one emerge at the top when things settle into the new reality. These, too, might look at how new alliances and business combinations can offer not only protection, but a larger

Curtis Kauffman is the founding publisher of Radiology Business Journal and president/CEO, the Kauffman Group, Inc, Tustin, Calif., which offers consultative services to the imaging community, including group practices, hospitals, imaging centers and industry.