One would think a metropolitan radiology practice that is 100% dependant on the outpatient market for all income would be at a competitive disadvantage in this post-DRA marketplace. But, if the practice in question were Nassau Radiologic Group, one would be dead wrong. The 40-person practice, founded in 1927 and based in western/northern Nassau County, is currently considering multiple acquisitions and has embarked on a new wave of investment in bolstering its infrastructure and digitizing technology. ImagingBiz.com discussed this and other topics with practice chief executive Annette Marinaccio, CPA, who has directed business operations for Nassau since 1988. Nassau County is a suburban county in the New York Metropolitan Area east of New York City on what is referred to as Long Island.
ImagingBiz.com: When and how did you land at Nassau Radiologic Group?
Marinaccio: I’m a CPA, so I was a business component during an era when it really helped for physicians to have a business component. I started with the practice in 1988. I was in public accounting before that, not even health care. It was a great mix. It was at a time when managed care was sweeping from West to East, and they were looking at capitated contracts and programs managed care was producing that were very foreign to the health care profession. I was able to help them evaluate those. So I was a bit of a pickle in a cookie jar, because they were all medical people—doctors, receptionists, technologists—there were 75 employees at the time and 12 physicians.
If I fast forward to today, we have 40 physicians and about 400 employees. Basically, my role was the central businessperson back then, and I am the central businessperson now. My role has not changed too dramatically, the scope of my role has, but my role has not. I like to say the company grew up underneath me, and I grew up with it, because obviously it is the bulk of my professional life I spent here.
What I’ve done over the course of the last 18 or so years is spearhead several financing opportunities for them, so that they could grow in an environment where doctor’s offices weren’t able to. I helped shepherd several mergers and acquisitions. In the late ‘90s there was a big Wall Street flirtation with physicians offices, so we went through a series of acquisitions at that point, and organic growth. One of the biggest, most important things was the development of a very, very formalized management infrastructure, accounting-like, very organized, which included lots of after-hours meetings with specific agendas. Our organizational chart is very specific.
ImagingBiz.com: Nassau Radiologic has been in practice since 1927, longer than any other practice in metropolitan NY. What is its niche, and what is the secret to its longevity?
Marinaccio: Back then, I don’t know that radiology was as prevalent as it is now. It was flat films and—from what they describe to me—almost torture chamber methods to get the study—spinning tables and spinning bodies. But they were basically the team of doctors that operated out of the main hospital, Nassau Hospital, at the time, and they had one small office up the block. That’s how they started in this community.
There were a couple of pivotal changes. One of them was that we entirely left the hospital setting in 1992. We are on the staff of many of the hospitals around here but we glean no income directly from hospitals. More unique than the fact that we have achieved the marriage of radiation oncology and radiation oncology all of these years is the fact that we are as successful as we are and we do not see any hospital income. Because, typically, larger practices are involved with hospital contracts, and, also typically, that is 70% of their work for 20% of their income. Yet the doctors that are inside the hospital—referrers—typically have outpatient offices of their own. And the efficiency with which we can get their patients done—a report is faxed to them within 4 hours of seeing their patients—particularly in the 80s and 90s as we were doing it then, you couldn’t match that anywhere else. That was one of the pivotal decisions made by the practice at the beginning of 92 and 93, and it was wonderful. If we wanted to get a piece of equipment, all we had to do was get the financing and negotiate. There was no administration to go through. So we were able to just grow in our marketplace.
The other big thing is that the computer industry has taken radiology and radiation