Spokane-based Inland Imaging LLC, the Inland Northwest's largest radiology practice, and 14 other major U.S. radiology groups have formed a consortium to search for ways to reduce costs, to take advantage of opportunities, to improve patient care, and to profit in other ways from working together.
The consortium, Strategic Radiology LLC, doesn't have an office yet, but is close to announcing the hiring of a non-physician administrator after the contract of its first employee expired, says Steve Duvoisin, Inland Imaging's CEO. The 15 groups, which own Strategic Radiology through holding companies they have formed, include more than 890 physicians. Inland Imaging has 63 radiologists and six surgeons on staff.
'For those of us in radiology, as for others in health care, things are evolving,' says Duvoisin.
'For a long time, groups have been relatively small and geographically limited,' he says. Now, he says, 'You're starting to see the consolidation of health care,' with organizations that have both a hospital and a physician component, such as Group Health, the Mayo Clinic, Geisinger Health System, and the Cleveland Clinic, coming to the fore. Also, Duvoisin says, hospital chains, including Providence Health Services and Community Health Systems Inc., which own the major hospitals here, want to have more services either in their medical centers or tightly aligned with them, Duvoisin says.
'From a health-delivery standpoint, it's what needs to happen,' he says of the trend toward consolidation. 'I've been doing a lot of thinking about how patients access the health-delivery system. It should be easier to access than it is.'
It's too early to say whether the radiology practices that own Strategic Radiology might end up as a single group someday, Duvoisin says.
'Part of the reason our organization came about was to address the publicly financed models' efforts,' he says. Those companies, such as Nighthawk Radiology Holdings Inc., which was launched in Coeur d'Alene but now has its offices in Scottsdale, Ariz., provide physician readings of radiology studies on an around-the-clock basis, filling in gaps when the staff members of radiology practices aren't available, such as at night.
Duvoisin claims that the public companies have gone after local radiology groups' contracts.
'Some of the smaller to medium-size groups have had trouble with that,' he says. 'Putting physician services on the stock market is a slippery slope.' Wall Street and the shareholders of publicly traded companies demand returns that come out of local physicians' pockets, and publicly traded companies don't reduce costs, he says.
Strategic Radiology has no plans to go public or to become another Nighthawk, although its members have discussed the issue of whether and how to provide o& hours physician readings of radiology studies that could be sent via telecommunications systems to its members' physicians.
'A question that Strategic Radiology members will have to answers soon is when (and how) to roll out any collective teleradiology or image-sharing capacity between the groups,' the publication Radiology Business Journal reported in a recent article on the consortium. 'Do they want a teleradiology presence only between Strategic Radiology members, or do they want to offer a broader service to nonmembers, too?'
Duvoisin says that Inland Imaging has its own internal night-readings system, with two physicians available to do off-hours readings every night. Outside of its own group, it provides that service mostly in the Northwest and to a small physicians group in Phoenix, he says.
In addition to Inland Imaging, the groups that formed Strategic Radiology include two practices from California, two from Arizona, and one each from Colorado, Connecticut, Georgia, Indiana, Michigan, North Carolina, Ohio, Tennessee, Texas, and Utah. The largest, Advanced Radiology Services, of Grand Rapids, Mich., has 114 radiologists, and Duvoisin says it's the biggest radiologists' group in the U.S.
The radiology groups demanded from the beginning that the consortium be owned and operated by radiologists, as those groups are, Duvoisin says.
Radiology Business Journal reported, 'Indeed, there is no doubt that the consortium's fundamental reason for being is to retain a radiologist's hand on the tiller as the industry is reshaped by health reform, pay for performance, sophisticated utilization management, and the increasing shifting of private physician practices into hospital ownership.'
Thus far, Strategic Radiology has concentrated on expense reduction, group-purchasing agreements for equipment and supplies, and data sharing on malpractice insurance rates, billing practices, and other subjects, Duvoisin says.
He says that when its members compared notes on malpractice insurance, one group decided that the premiums it had been paying for coverage levels of $5 million per occurrence and $9 million per year were excessive. That group followed the lead of Inland Imaging and other members and cut its coverage to $3 million per occurrence and $5 million per year, saving $140,000 a year in premium costs, Duvoisin says.
Meanwhile, Inland Imaging saved $75,000 a year through group purchases of intravenous dyes that provide contrasts in radiological studies, Duvoisin says.
