Is Bigger Better for American Imaging?- Dr. Jay Bronner, RadPartners



Even for doctors, the future is less about individual performance and more about group performance

Technology like Artificial Intelligence will be a required tool to compete in the future

RadPartners believes in one group, locally led

Bigger doesn’t necessarily mean a loss of control for local physicians

RadPartners hopes to create value by building something different than the historical practice of radiology

(Several places in the interview I have added italics and bold. These were concepts I found particularly interesting and thought to highlight. These were not given with emphasis by Dr. Bronner)


AP: Today on Healthcare Pittstop I’d like to talk about “Is bigger better? The changing face of American imaging,” and I have as a guest Dr. Jay Bronner, the President and Chief Medical Officer of RadPartners, one of the largest imaging providers in America.



RadPartners ( most recently acquired many of the radiology practices where I live, here in Phoenix, Arizona. I thought it would be topical to talk about imaging in America and how that’s changing. Welcome, Jay. I’m glad you could join.


JB:Thanks, I really appreciate the opportunity to be here.


AP: You bet, thank you. RadPartners really is much different than most medical practices in that you’re practicing at scale. You have many more people rolled up in the organization, which I would think would offer some advantages in terms of technology and expertise. Could you talk a little bit about that?


JB: Sure. First, as a backdrop, the radiology market is still fragmented. The average practice is about nine to ten radiologists, and in the macro-environment, healthcare is changing dramatically. We are transitioning from fee-for-service to fee-for-value. So that means that payment reimbursement is going to be based not on how many cases we read, but on the impact of the procedure that we’re doing, and both hospitals and practices are going to have to make this transition. So we’re finding that hospital systems are looking to partner with radiology practices that can help them in that transition.

AP: Well, that’s a really interesting point. I have this saying that “All care is local,” and I would think that there would be a debate between how hospitals view their local radiologist relationship and partnering with RadPartners, a larger corporate entity, that may not be as responsive to their individual needs. Do you have any thoughts about that?



I know there was one hospital system in Texas. Friends of mine who are radiologists there told me that the hospital stopped the acquisition of the radiology group because they wanted their local relationship to be sustained.


JB: Yes, so it’s really interesting. I have the opportunity to go to a lot of hospitals and to visit a lot of them up before practices join RP. I just did this a few days ago. And the first two questions universally asked by the hospital leaders when we meet is: “Will the same physicians we have always known continue to be there?” and “Will the physician leadership and governance change?” When my practice joined RP and we met with the CEO of one of our hospitals, they asked, “Is recruiting going to be done locally, or is it going to be done by some national companies centrally?” And in our practice, the decisions in governance in operating the practice are all made locally. So they were very relieved to hear that. And we recognize that that is critical and foundational in hospital practices.


AP: So you have kind of a hybrid model, you have a centralized corporate infrastructure, but you have local folks there that interface with your customers?


JB: We are one practice, locally led.


AP: “One practice, locally led”—that’s an interesting way to put it. I would think that one practice would have some advantages in terms of technology and expertise. There’s a lot of talk about artificial intelligence in radiology, and of subspecialization. How does that look with RadPartners?


JB: There are a lot of “extras” that are brought to the table when we partner with a practice, and I think a lot of hospitals are recognizing that. So specifically with artificial intelligence, there’s a lot of hype about it, and we believe that artificial intelligence is going to be important in the future, but that it’s by no means going to replace radiologists. We think that radiologists that use artificial intelligence are going to replace radiologists that don’t.


AP: So it’ll be a tool that you have to have, really, to compete.


JB: Yeah, and so we’re spending a lot of time—and this is one of the advantages that a practice of scale brings to the table—we’re spending a lot of time trying to invest in deciding what makes sense in the artificial intelligence world. There’s a lot of hype about it, and a lot of companies and software companies present themselves as being ready. But we find that it’s probably a little early to be making that statement.


So as a scale practice, we look at the continuum of care, and we look from the beginning of working with management and working with some companies that claim to be able to identify critical findings, and move them to the top of the worklist, and then all the way down to the end of care. And in radiology, there’s the idea of following up on patients that have critical findings, so we find this is an advantage that we bring. But it takes resources and scale to spend time in doing that.


AP: So I’m going to assume that you can bring to bear a lot of technology. You can probably afford a much higher quality-control system where you’re able to check and cross-check everything. I’m going to also assume that you’re able to direct the right case to the right radiologist. So, for instance, a person specializing in orthopedic radiology can read a case where, in a lot of groups, that doesn’t actually happen.


There’s kind of a little bit, from a radiologist’s perspective, a little bit of a kind of dark side, if you will, or at least a little bit of a concern when you talk to radiologists. They look at folks like RadPartners as the dark side coming—that there’s going to be a sense of loss of control. What do you tell the local practitioner about RadPartners and the corporatization of what has been their business, if you will?


JB: So, I mean, as I mentioned before, we see ourselves and we are one practice locally led. There’s clearly consolidation of healthcare in every space in hospitals, health systems, insurance carriers. But consolidation doesn’t mean that physicians will lose control. The healthcare needs of patients are different in every community, and we think this is a sound, fundamental principle in hospital-based radiology, and it’s really important to make sure that any practice continues that local governance.


So we find that even the ability to clinically innovate has to be managed locally. It wouldn’t make any sense for us to change that, so we have local practice boards that are basically acting just like the boards of the practices that joined us, and they make all the decisions about what their schedule is like, how to bonus people, who they hire, who’s going to sit on hospital committees. So, if anything, they’re now empowered with the resources that make them more valuable to the hospital systems and gain and control those advantages. We find this being very empowering, as opposed to a loss of control.


AP: I know that you spent some time with them another large corporate entity, TeamHealth, where you helped them with their imaging. Was there a difference between RadPartners and TeamHealth in their approach to the market?


JB: That was so long ago and it was just at the time that telemedicine was in its infancy. So what I took away is that radiologists are culturally different than other subspecialists. We’re different than emergency medicine physicians, who tend to work for many practices and tend to move from practice to practice.


And that’s why we think it’s really important that we invest in things that will do transformational things in radiology, and who better to do that than a radiology practice? And that’s really that we understand radiology. We understand what drives radiology and the whole idea of reducing variability is what we say is so important. Only radiology practices are going to invest in that kind of stuff, right?


AP: I get that. My radiology group considered selling to another entity. And there was a lot of discussion as to whether the senior partners who own the practice were selling the future of people as yet to join the group—the junior people. And generally, my understanding of how this works is that people who own a practice, radiologists, get some form of buyout from RadPartners or others; some amount of money, and then they’re asked to come to work but they’re typically earning less than they earned before—substantially less.


So, the question is, if the people—frankly, my generation—were incentivized to take the buyout, are they selling the future of the next generation of radiologists? And do you believe it will be hard to recruit, to find those next people, to join these practices?


JB: I think recruiting for a large practice is similar to recruiting for a smaller private practice: If you offer what people want, they come. We have recruited over 80 physicians in 14 states in the past year, and that’s been driven by our growth, that’s not been driven by turnover. And our average lead time to fill a position is 90 days or less. So we are not finding any difficulty in recruiting. The reason I think that we’re able to do this and we’re differentiated from other large practices or companies is that we have a path to partnership. We call it PIP.


And how it works is that local practice boards decide which one to make a partner, or make somebody a partner in RP, just like they did before when they were an independent practice. And then, when their associates become partners, they receive equity in RP with no buy-in. So they become significant owners of the practice. And when the practice joins RP, the partners who are there—it’s true, they do get some cash—but they also get equity ownership in the practice, and all the partners have the ability to co-invest at future times in more equity and to get a larger ownership stake in the practice, and we think that is really important in radiology practice.


That drives the cohesion to clinically innovative. There is drive, a cohesion, to do the right thing. We think we’re pretty uniquely positioned in our model that we offer that benefit and that we think this is really important. We’re seeing that resonates with future generation leaders. We also find that, given our practice model being physician-led, and the fact that it’s locally led, we’ve developed a university that’s intrinsic to RP that teaches physician leadership.


There are all the kinds of things that radiology residents learn in radiology residency, but then I still think there’s a wide variability in how it’s presented in graduate medical education right now. We’re finding that’s a real opportunity and is recognized by the next-generation leaders as a real plus. And we not only do it, we invest in this, because we know we need local leadership everywhere around our practice if it’s going to be locally led.


AP: I guess the proof is in the pudding, if you’ve been able to recruit 80 people over the last year, you must have something there.


Let’s flip the lens a little bit and, you know, when I look at practices being purchased in radiology and in other specialties, I see huge multiples being paid out by private equity to grow the business. The multiples can be, in terms of revenue, can be 8, up to even 16, which means that if you’re earning x today, I’m going to pay you 16 times that amount to join. I have a lot of trouble understanding what the exit is for private equity. My personal belief is that there’s not a lot of fat in radiology. We’re pretty efficient; we have relatively few employees. Do you have any thoughts around what the exit is and how growth is going to continue from the equity markets with these high multiples?


JB: Well, I think that what we focus on as a practice and what our partners focus on.  NEA is our principal capital partner—we focus on transformational opportunities. When you transform a space and you actually start adding clinical value through programs that change the way radiology is practiced, you develop the ability to start influencing value metrics within a specialty, you start creating a lot of enterprise value. It’s not just about getting bigger. It’s really about doing transformational things and making it easier to practice better. And we think that that is a real driver of the value that we create. And we’ve seen that in the marketplace already.


We have contracts, for example, that pay us premiums on the basis of the best practices that we’ve developed internally, and we apply them across the practice. So we’re no longer measuring, and I think one of the things that MIPS and MACRA (the new scoring system within Value based care delivery) brings to the table. We no longer measure how an individual radiologist performs; now, it becomes how a practice performs. Translate that to, you know, 5, 10, 15 clinical initiatives for common findings and you start getting best practice, evidence-based uniform recommendations, uniform follow-up opportunities; you start creating a lot of value. Markets recognize value when they see it, and we think that’s going to be a big driver in the future.


AP: So you really are doing something different than what the standard radiologist is, because I gotta ask, as it just occurred to me: Have you ever considered selling your process and software to radiology groups that don’t want to join you? You come in and say, “Look, we’ll take care of all of this stuff for you. Don’t join us, just pay us a subscription fee for all this other good stuff we have, and you can stay local.” Have you done that anywhere?


JB: We haven’t. We’ve talked about it. It’s something our leadership team has discussed. No decision has been made on that yet. We’ve been asked by hospital systems too. Where this is going to take us over the next couple of years, I don’t know. What we want to do is scale and increase the infrastructure of our clinical innovation team. We currently have six physicians who spend half their time trying to drive clinical value on a database of around 10 million exams a year, which we data-mine, and we’ve got several best practices. We want to scale that; we’ve been investing in technology to make that efficient so that we could take on other hospital systems or practices, so we by no means rule that out.


We’re learning. We’re so early in the stage of clinical implications that we see lots of opportunities for it and hence the opportunity to create a lot of value.


AP: I spend a lot of my time in the telemedicine world. I see huge overlap between telemedicine and teleradiology. The process that you’re bringing to bear on the market would seem to have implications for things outside of radiology. A lot of hospital-based physician practices could certainly use this to improve standards, and with data analytics, all those other things, and certainly telemedicine has an opportunity to bring them to the point of care as well.


What do you think the implications are for other clinical services to what you’re doing in the imaging space?


JB: I think they’re really similar. We are not a telemedicine company but we use telemedicine. We are a hospital-based practice. (Teleradiology allows) us to brings some specialists to places that may not have access to them, or if you get slammed in one emergency room, we can bring other radiologists help us on an as-needed basis.


So I’m imagining a scenario in an emergency room where the waiting room is packed and you’ve got patients starting to get agitated and you’ve got to do triage, and you’re limited based on how many physicians [are available]. Given the right equipment and given the right monitoring opportunity, I can see an emergency physician somewhere else helping to triage your patient through telemedicine; connecting them, deciding where they need to go and what specialist they need to see.


I could clearly see this with stroke management. Time is of the essence. In acute stroke management, you can be in a facility that might decide they really need to transfer somebody. A remote neurologist [for example]; a neurologist may not be available in a more rural location, or may not be available because they can’t reach one. I could see an opportunity there for a neurologist to be available by telemedicine. Time saves brain cells, so every moment you save really can make a difference. My wife’s a dermatologist. She’s starting to tell me now about artificial intelligence companies that are evaluating the change in size of skin lesions, and the ability to bring dermatologists to communities that don’t have enough—teledermatology. It has a lot of applications.


AP: I think it makes business sense. I think you’re going to see what you’re doing extended to other clinical services for sure. Jay, I really want to thank you for the time today. I think this has been very informative. I hope we’ve answered some questions patients would think about in terms of getting higher-quality care and some of the concerns I’ve heard from radiologists and hospitals. I very much appreciate the time. Thank you very much.


JB: Thanks Alan.


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