Corporatization in radiology is increasing, and whether it is a positive or negative trend remains to be seen, according to a white paper published August 16 in the Journal of the American College of Radiology.
Corporatization follows on the recent trend of consolidation in healthcare and is due to a variety of factors, wrote members of the American College of Radiology (ACR) Corporatization Task Force.
"Reasons for corporatization include socioeconomic, technological, demographic, financial, legislative, and regulatory issues," wrote a team led by Dr. Howard Fleishon of Emory University in Atlanta. "Although record valuations, scale, and access to capital are opportunities, there are valid concerns about productivity demands, commoditization, and profit influencing operational and cultural decisions."
With the increase in consolidation among healthcare providers in recent years, corporatization of medical practices also has increased. To study the trend, the ACR formed its Corporatization Task Force in January 2018. The task force includes representatives from the Radiology Business Management Association and the ACR Young and Early Career Physicians and Resident and Fellow sections, and it has consulted with other professional organizations affected by corporatization, including the American College of Emergency Physicians, College of American Pathologists, American Academy of Dermatology, and American Society of Anesthesiologists.
Consolidation in healthcare is due to a number of reasons, including insurer mergers, rising capital expenses, declines in reimbursements, health legislation, and the shift from fee-for-service to value-based care. As for corporatization, the most current estimate is that 6% of U.S. radiologists are practicing in a corporate structure, although this number could be higher, due to private equity deals that are not reported, the team noted.
Causes of corporatization in radiology include the following:
- Liquidity in capital markets and, thus, access to investment capital
- Investor perception that healthcare is an attractive investment
- Record high valuations for practices
- Fragmentation in radiology, which investors see as an opportunity
- Reimbursement uncertainty
- Contracting uncertainty for private practices
- The cost of implementing new technology, especially for small practices
The corporatization of radiology has its pros and cons, according to Fleishon and colleagues. For example, it could improve access to medical imaging as corporations expand imaging centers, or it could impede access if geographic consolidation of centers drives practices out of business. It could potentially raise medical imaging costs or reduce them; it could reduce quality by exerting productivity pressure on radiologists.
Corporatization's effect remains to be seen, but its impact must be understood, according to the authors.
"The real, recognized, and potential influences of capital investors in radiology need to be acknowledged as evolving and important considerations," the team concluded. "As physicians, it is our responsibility to represent not only our practices but to be advocates for quality, patient-centered care, and physician practice autonomy as these models develop."