When Radiology Partners (RP) completes its acquisition of Mednax's radiology services division, it will put hundreds more U.S. radiologists under the RP banner. And RP executives see that scale as a major benefit, from raising new investment funds to rolling out new technology across its growing network.
Radiology Partners on September 10 announced its plans to buy Mednax Radiology Solutions for $885 million. On completion of the deal, Radiology Partners will have some 2,400 radiologists participating in its network, a number that includes about 500 teleradiologists that Mednax inherited through its acquisition of teleradiology provider vRad in 2015.
The acquisition makes sense for Radiology Partners as the company seeks to add value to healthcare through the provision of radiology services, according to Rich Whitney, chairman and CEO of RP. In fact, many of the Mednax radiology practices that will be coming under its corporate banner are ones that RP had discussions with previously.
"This is a really great collection of practices. We know them well, they are strong practices with good franchises," Whitney said in an interview with AuntMinnie.com. "We tried to partner with them in the past, and for whatever reason they ended up going with Mednax, so for us this was a second chance."
When the deal is completed, Radiology Partners will extend its lead as the largest provider of radiology services in the U.S. In fact, some 7% of U.S. radiologists will fall under the Radiology Partners banner.
RP executives see that scale as key to achieving a number of the company's goals, ranging from helping radiology transition to a value-based payment system to helping radiology groups add teleradiology to rolling out new artificial intelligence (AI) capabilities.
RP had begun building its own teleradiology capability in 2014, a service that now includes over 100 radiologists in the company's Matrix division, according to Dr. Nina Kottler, vice president of clinical operations at RP.
The potential of the deal in AI is particularly interesting, according to Whitney. While both Radiology Partners and Mednax have begun implementing AI at their practices, the new deal allows them to rapidly scale up these plans.
And RP's new scale could also be an advantage if the company chooses to begin developing its own algorithms, as vRad has a database of 50 million imaging exams that could be used for training and validation.
"We have the data, the data is one of the most important parts in creating a generalizable algorithm that will work across a large patient population," Kottler told AuntMinnie.com.
In most other industries, a 7% market share might not be that impressive. But in the highly fragmented imaging services business, traditionally based on private-practice groups owned by individual radiologists, it's a massive number. And Radiology Partners plans to leverage that position for future growth and to push transformative changes to the specialty.
"This is continuing on the same strategy, building up increasing scale, which will open up the opportunity for larger and larger investments across all areas," Whitney said. "It is a level of scale that we haven't seen before in radiology, which holds a lot of promise in making aggressive investments to advance our field in terms of the value we add to the system."