17 Nov Talking Teleradiology in Imaging Economics

Imaging Economics | Marianne Matthews| November – A new teleradiology group is about to be born. Here’s the point-counterpoint from two industry professionals.

I was surprised when I searched the RSNA Web site and did not find a single session on the topic of “teleradiology.” I looked under the category “professionalism” and I searched new categories like “controversies sessions,” “special interest sessions,” and “hot topic sessions.” I even looked under “general” and “other.” But I came up empty-handed. (Now, perhaps the subject is covered in one or more broader sessions, but if so, I could not find it.)

Even so, the radiologists I’ve been talking with recently say teleradiology will be a topic of conversation at RSNA—if not in the sessions, then in the exhibit halls, in the corridors, and over cocktails. Many in the industry are already abuzz about the recent announcement of a merger between Virtual Radiologic (vRad) and Nighthawk Radiology. By joining forces, the new entity will have 325 radiologists serving nearly 2,700 health care facilities across all 50 states and will read approximately 6 million studies each year.

The new merger comes on the heels of Franklin & Seidelmann’s launch of Radisphere National Radiology Group in April. Radisphere has been criticized for directly competing with local radiology groups for lucrative hospital contracts.

So what can we expect from the vRad-Nighthawk marriage? I spoke with vRad President and Chief Executive Officer Rob Kill, who said the goal of the merger is all about delivering high-quality patient care and excellent service. I asked if the new entity would seek contracts directly with hospitals and, in so doing, perhaps be seen as a threat to local radiology practices. “Our philosophy [at vRad] has always been to serve local radiologists. We don’t compete with them; we collaborate with them,” he responded. I asked about Nighthawk’s very public commitment to the radiology community and if the new organization might emulate it by putting something similar into effect. “There is no need to put out a code of conduct because we’re partnering with local radiology groups, not competing with them,” said Kill.

But I’m sure Mr Kill is not so naïve as to think that everyone will accept his “just-trust-me” attitude—least of all, his competitors.

When I asked Vishal Verma, MD, medical director and partner at StatRad, if the radiology community should be concerned about the new organization, he said, “Definitely. Predatory practices could take over radiology by displacing local groups from their established contracts at local hospitals and imaging groups.”

StatRad naturally has their own agenda: After all, they are a competitor. The San Diego-based team of approximately 20 radiologists is a “mid-sized teleradiology group” that is focused on night reads, high-level care, and partnering with local radiology groups, according to Verma. StatRad, he said, is “primarily owned by radiologists,” with two minority partners who are not physicians. And that, suggested Verma, makes all the difference.

Verma’s concern is that, when the deal is completed, vRad will be a “mega corp.” (Meanwhile, Kill implies that there is plenty of business to go around, noting that the professional services component of radiology is “a $20 billion market. We’ll be slightly more than 1% of that market.”)

Still, Verma had a point when he said that the teleradiology market is already saturated and concluded with “…so where do they [vRad] see new revenue opportunities? The natural, easy way to grow is through acquisition. But the private equity group that owns them will expect them to make money. …The natural tendency is to go after hospital contracts. Can they resist that?”

But Kill sees things differently. He said, “The definition of teleradiology has evolved … it’s a tool used by local radiology practices and hospitals to improve costs and quality.” Then he goes in for the, well, kill: “Every time there is a market change, there are those who lead it, those who get dragged along, and those who put their head in the sand.”

Kill’s sand imagery is appropriate. As I’m talking teleradiology, I want to say, “Let’s play nice, boys. Let’s share the sandbox.” Let me know what you think about the new merger and the teleradiology evolution.

Read more on ImagingEconomics.com.