When Spectrum Medical Group, Portland, Maine, was formed in 1996—living up to its name by bringing together radiologists, pathologists, anesthesiologists, and radiation oncologists—the multispecialty group was already preparing for the difficult market conditions on the horizon: increases in managed care and capitated physician payments. David Landry, CEO, says, “At that time, we were looking at diversifying our practice to be prepared for what we saw coming down the pike in terms of financing reform. We feel very fortunate that we had that earlier experience; where we sit now is very reminiscent of where we were 15 years ago.”
Today, Spectrum Medical Group has 150 physicians spread across its four specialties, and it plans to bring on 50 or more additional physicians in the next two to five years; 60 of its current physicians are radiologists sharing the workload from 17 hospitals. Spectrum Medical Group is preparing for the changes to come, Landry says, by nurturing and emphasizing its physicians’ ability to subspecialize, positioning the group to provide its services to an increasing number of clients.
“We’ve created large subspecialty practices in each of our core specialties, and in the case of radiology, we’re working to use that to support radiology groups and hospitals in need of subspecialized radiology,” he says.
Like many radiology groups today, Spectrum Medical Group aims to reduce its costs through expansion—both through improved resource optimization and through a new initiative to partner with other physician practices to create an independent practice association. “We’d like to contract directly with payors and employers,” Landry says. “We’d like to move from traditional fee-for-service reimbursement to some form of bundled payments in which we’d provide a range of medical services to our market.”
This strategy—strengthening the group’s position in its market and reducing its overall cost to clients by expanding and by subspecializing further—is one that Landry expects to see more groups employing over the next few years. “What we believe is that for the next several years, a combination of health-care economics and an aging physician population will lead to the demise of the small practice,” he says.
To that end, Spectrum Medical Group is working not only to expand its core specialties, but to bring on other specialties as well. “We’ve targeted specialties that are similarly hospital based or that do work in the hospital environment—emergency-department physicians, cardiologists, surgeons who operate out of a hospital (as opposed to an ambulatory setting), and physicians such as gastroenterologists,” Landry says.
Increasing its hospital volume will enable Spectrum Medical Group to maintain the critical mass necessary to support even more subspecialization in radiology, Landry says. “We’ve been able to hire multiple subspecialty physicians in all the disciplines of radiology,” he notes. “It provided a benefit to Maine Medical Center (Portland), our flagship hospital, by offering it academic-level subspecialty depth, but the other benefit is to small community hospitals. They can’t afford or access the level of care we can bring to the table.”
To bolster its subspecialty offerings, Spectrum Medical Group has worked with NightHawk Radiology Services, now part of vRad, for eight years; the relationship began with NightHawk Radiology Services providing the group’s after-hours coverage for hospitals, but has evolved into a tighter business arrangement, Landry says. “We have a load-balancing relationship. We partner together.”
Landry also sees potential for further enhancement of the relationship as radiology groups continue to merge and expand. “Our vision of what’s going to happen to radiology is to be one of several large, regionally based practices (such as Spectrum Medical Group) with an organization like NightHawk [now vRad] supporting them, so they can all work together,” he says.
In the meantime, Spectrum Medical Group continues to build the foundation for future growth by providing radiology services of unprecedented subspecialization to its hospital clients. “We’re involved now in a number of growth initiatives to expand our core services throughout Northern New England,” Landry says. “For the large tertiary hospitals, we can guarantee subspecialty coverage they wouldn’t be able to get from a dedicated group. The small community hospitals get the same high-end, subspecialty radiology