Radiology-practice alignment with hospitals and health systems has never been a simple proposition, and recent years have seen the severance of long-standing ties between hospitals and the practices that served them. Simultaneously, however, conditions in the US health-care market have made alignment between the two parties a more promising proposition than ever before—if certain conditions can be met.
“There is a level of alignment where radiology groups have a seat at the hospital’s leadership table. There are notable groups across the country that have achieved that status—and there are notable groups that have not.”
Douglas Smith, managing partner for the Strategic Positioning & Consulting business group of Integrated Medical Partners (IMP), notes that commoditization has long been a fear in the imaging industry. As the market for radiology services matures, more competition drives prices downward, and (the reasoning goes) customers are unable to distinguish between providers on any basis other than price. With the growing trend toward health-care–delivery integration, however, radiology practices have an opportunity to sidestep the commoditization risk entirely.
“If we talk about radiology-group alignment with hospitals and health systems, and the mechanization of that alignment to meet the strategic and tactical imperatives of the health system, that’s where we’re seeing radiology avoid the label of being commoditized,” Douglas Smith says. “There is a level of alignment where radiology groups have a seat at the hospital’s leadership table. There are notable groups across the country that have achieved that status—and there are notable groups that have not, and are, therefore, left on the sidelines of the emerging health-care space.”
Characteristics of Aligned Practices
No two aligned relationships are exactly alike, of course, but there are some common characteristics that Smith and his colleagues Bill Pickart, Bob Kebbekus, David Smith, Tim Dyer, and Steve Goodman highlighted in a roundtable discussion on how radiology practices can successfully achieve tenable alignment with their hospital and health-system partners.
“The groups that successfully gain a seat at the leadership table are the ones that understand what the strategic plan of the hospital or health system is, as well as where they fit—they wrote the imaging portion of the strategic plan,” David Smith, IMP's senior vice president of client services, says. “These groups have approached the hospital and have endeavored to understand where it’s going, and they are the groups that are achieving alignment, while very successfully maintaining private-practice status.”
Pickart, who is CEO of IMP, notes that recent pressures on group practices, including improved hospital/health-system alignment, have resulted in consolidation of radiology practices. These consolidations were perceived as being limited to financial relationships: mergers, limited mergers, and acquisitions. These limits no longer apply, in today’s market.
“Alignment, supported by collaboration with other regional groups, brings results that are beneficial and provides an alternative to the three traditional financial strategies,” he says. “Hospital systems around the country are now making a concerted effort to organize their multiple radiology groups around shared protocols and shared coverage.” Collaboration between these groups can facilitate meeting the hospital’s objectives, while supporting the desired independence of the respective groups.
Kebbekus, who is COO of IMP, connects a radiology group’s ability to collaborate with a health system with its ability to collaborate with other groups in regional networks or other affiliated models; both types of relationship, he says, require a cultural focus that is not traditionally inculcated in physician-owned practices. “Too many radiology groups today, for understandable reasons, tend to be inwardly focused, and are likely to be more combative or competitive with these partners than they are collaborative,” he says.
David Smith adds, “A big part of that is group culture—you see a lot of groups where the only thing valued is getting the work done. If you don’t value someone taking the time to attend hospital committee meetings or to meet with hospital leaders, you won’t be