Achieving Competitive Scale in Radiology While Maintaining Independence

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Bill Pickart, CEOAs consolidation in the hospital market continues apace—driven by the increasing prevalence of integrated delivery networks (IDNs), accountable-care organizations, and other new payment/delivery models—many radiology groups find themselves at a crossroads. How can they gain the scale necessary to meet the mounting demands of today’s care continuum, given the continued downward pressure on reimbursement? RadAnalytics spoke with Bill Pickart, CEO of Integrated Medical Partners, about an emerging option that strikes a compromise between independence and scale, enabling groups to take a proactive approach to meeting hospitals’ evolving quality and service directives and needs.

RadAnalytics: Given the fact that hospitals are consolidating in record numbers, can independent radiology groups maintain their viability by using a similar strategy?

Pickart: Absolutely: Independent practices can protect their franchises by following a similar strategy within the appropriate model.

RadAnalytics: What is the appropriate model? What are the advantages of one model or approach over another?

Pickart: Traditionally, consolidation involved practices in a merger or an acquisition. Having worked in the merger/acquisition-financing sector, I know that there are numerous challenges associated with those models—none of which is more important than successfully joining the disparate cultures of the merged practices. It’s very difficult, and it requires much skill and many resources. Without the proper merging of cultures, the merger will not be successful. As an alternative to a merger or acquisition, an affiliation is a more feasible way to collaborate beneficially and work together.

RadAnalytics: Alignment of interests between competing practices has proved elusive in the past. How would an affiliation model help groups overcome this reluctance and find common ground?

Pickart: Practices need to understand that significant, permanent changes (both to the way that they engage in the delivery of care and to the manner in which they are reimbursed) necessitate change in the way they compete. In addition, there has to be a desire, among groups, to promote affiliation and collaboration, on a noncompetitive basis, as a model that enables them to feel comfortable sharing data, developing clinical protocol metric, and quality-outcome measures—all for the benefit of their primary customers, their hospitals, their referring physicians, and their patients.

RadAnalytics: Is this a way of ensuring consistency for a customer who otherwise might have reason to be wary (because the groups aren’t financially aligned)?

Pickart: Yes: Financial alignment is typically achieved through merger or acquisition. It is assumed that the practices, once merged, will provide one consistent level of diagnostic quality.

The affiliation model does not involve a financial merger or acquisition, yet its purpose, its governance structure, and its ability to provide evidence of performance are designed to promote best practices in support of network directives. As hospitals are consolidating under IDNs or systems within a given marketplace (with the intent of delivering consistent, high-quality care across all of their facilities), it’s imperative for radiology groups to enhance their positions within those networks by promoting consistency among themselves in support of network goals.

RadAnalytics: What will it take for the affiliated groups to demonstrate that they are meeting the hospital’s needs?

Pickart: In the absence of strong evidence of affiliated groups’ promotion and accomplishment of the hospital’s objectives, the hospital will not assign value to the affiliation. Through use of the correct measurements and analytics, the affiliate can demonstrate that it is committed to the quality-of-care objectives being promoted by the hospital (for the hospital’s benefit). It is imperative for the affiliate to demonstrate its contribution to the hospital’s objectives continuously, through its reporting capabilities.

RadAnalytics: Have you seen any real-world examples in which groups collaborated while maintaining their independence?

Pickart: Collaboration models are in the process of being brought to market. For instance, at the Fifth Annual ACR–RBMA Forum (held in Boston, Massachusetts, on September 7-8, 2013), an affiliation model was introduced and discussed. Although I’m not privy to all of the details, its intent sounds consistent with what I