Mednax Out, Virtual In

“The window to act is now . . .”

McKinsey’s Oleg Bestsennyy encouraging healthcare providers to take advantage of the COVID crisis and make their telehealth move, now.

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The Imaging Wire

Mednax Out

Faced with significant volume declines and underlying financial challenges, Mednax announced plans to sell MEDNAX Radiology Solutions (including vRAD and the Mednax radiology groups), as it transitions to a pediatrics & obstetrics-focused organization that will soon be called Pediatrix Medical Group.

  • MEDNAX Radiology Solutions – This move makes a sizable radiology business available to the right COVID-era buyer. Mednax has over 825 rads on staff, holds contracts with some attractive healthcare systems, and boasts a massive telerad presence through vRAD. It’s hard to say what the market will be for the MEDNAX radiology group (or its parts) right now, but it was on track to make $550m in 2020 revenue before the COVID emergency hit and it’s surely being eyed by a number of players.
  • Significant Progress – Mednax leadership called this move “significant progress in strategic transformation” that was already in the works before the COVID-19 emergency. That’s one way to position it, but the pre-COVID part is actually believable given Mednax’s ongoing financial struggles and its 2019 pause in radiology practice M&A. However, COVID’s impact on procedure volumes directly led to the sale of Mednax’s Anesthesia division in May and almost certainly influenced whether (and when) its radiology divestiture would take place.
  • Significance – The COVID-19 emergency has highlighted the shaky financial standing of some of radiology’s largest practices, many of which used debt to build their empires and/or have shareholders to appease (including Mednax). Up until now, the COVID-19 emergency forced these highly leveraged practices to make major payroll cuts and get creative with their liability structures, but Mednax is the first major player to actually exit the radiology business (even if they were already planning this).

Healthcare Goes Home

A new McKinsey report forecast that $250b of all U.S. healthcare spending could be digitized through a greater adoption of virtual care (up from just $3b), potentially representing 20% of all healthcare services.

  • Virtual Shift – The report suggests that virtual care could eliminate 20% of all emergency visits, 24% of all office and outpatient visits (plus another 9% with “near-virtual” visits), and up to 35% of home health service visits. That might sound like a lot, but the CV19 pandemic already increased the share of Americans participating in telehealth from 11% in 2019 to 46% today and healthcare systems already reported a 50 to 175-fold increase in telehealth volume versus pre-pandemic levels.
  • The COVID Opportunity – McKinsey positions this as more than a “could” forecast, as ongoing COVID-19 concerns / measures normalize virtual care over the next 12-18 months. In fact, the firm is encouraging healthcare companies and providers with telehealth aspirations to take advantage of the crisis and make their move as soon as possible.
  • Imaging Impact – This may not seem like an imaging story, but this forecast would mean that a lot fewer patients will be in the same buildings where imaging usually takes place. It’s forecasts like this that make Butterfly’s at-home ultrasound platform seem more realistic.

The Wire

  • CAC AI Exclusion: Dutch researchers developed a deep learning algorithm able to exclude 62% to 86% of cardiac CT scans for coronary artery calcium (CAC), potentially reducing radiologists’ CAC scoring workload by 34% and allowing them to prioritize higher-risk patients. The algorithm (trained on 60 CTs) classified 62% of the CAC-negative scans in an internal validation set and 86% of scans in an external set (both included 50 CTs w/ CAC, 50 w/o CAC), without any false negatives.
  • ABR Gets Held Back: The American Board of Radiology postponed many of its in-person exams until 2021 due to COVID-19 concerns. Although cancelling events due to COVID seems like a normal thing these days, it was met with backlash among radiologists who have been studying and already paid for their tests, particularly because it has also become normal for cancelled events to provide virtual alternatives (and the ABR isn’t doing that).
  • CTA + ECG for CAD: A new study published in JAMA Cardiology found that adding coronary CT angiography to exercise ECG exams improves the accuracy of coronary artery disease (CAD) risk predictions. The researchers analyzed data from 3,283 patients with stable angina (18-75yrs) who underwent exercise ECG alone or in combination with coronary CT angiography. The study found that abnormal exercise ECG results were associated with a 14.47-fold increase in coronary revascularization after 1 year and a 2.57-fold increase in nonfatal heart attack or CAD-related mortality after 5 years. The addition of CTA significantly improved prediction accuracy, as patients with abnormal ECG and CTA results were associated with a 10.63-fold increase in heart attack or mortality at 5 years.
  • Nanox’s $20m: Nanox landed another $20m from South Korea’s SK Telecom, adding to SK Telecom’s $5m investment last year and increasing Nanox’s fundraising total to $80m. The new investment comes with a joint collaboration to deploy 2,500 Nanox Systems in South Korea and Vietnam and the creation of Nanox’s new Korean subsidiary to produce X-ray source semiconductors, leveraging SK Telecom’s expertise.
  • Spotlight on Mobile MRI: The role of mobile brain MRI in the COVID-19 fight just reached a much broader audience after KHN and CNN detailed how the mobile systems help physicians evaluate and manage CV19-related brain injuries in the ICU. The story recapped how COVID-19 can impact the brain (stroke, coma, hallucinations, etc.), how care and contamination concerns are keeping many CV19 patients from undergoing standard brain MRI scans, and how a select group of hospitals have adopted mobile MRI systems to address this problem.
  • Radres Rounds Benefits: Amid all the momentum towards at-home reading, a new study in Current Problems in Radiology just provided an important reminder of the value of face-to-face radiology resident rounds. Following a year of radres-led weekly rounds, a survey of 34 internal medicine residents found that the rounds led to: At least one change in patient management (31% of respondents), an increase in medical knowledge (94%), improved evidence-based support for imaging orders (61%), a better understanding of available imaging resources (64%), suggestions to an attending/senior physician (49%), a cancelled or ordered study (42%), a change in perception of radiologists (39%), and made them want more daily interactions with radiologists (75%).
  • UTE-MRI for CV19: New research out of China found that ultrashort echo time MRI (UTE-MRI) can serve as an alternative to CT for CV19 pulmonary evaluations, producing similar indications without harmful radiation. The study performed UTE-MRI and CT on 23 patients hospitalized with COVID-19, finding no significant difference in image quality and achieving “excellent” patient‐ and lesion‐based interobserver agreement.
  • Varex’s Capital Move: Varex Imaging made $175m in convertible senior notes available (4%, due 2025, option for $25m in additional notes), revealing plans to use the capital to repay liabilities and for general corporate purposes. Varex began April with $383m in debt and only $24m in cash and surely felt COVID-19’s impact since then, making its move to raise more capital understandable.
  • First Line CT Colonography: A new study out of the UK found that CT Colonography could be a first line test for patients with low to intermediate risk of colorectal cancer, reducing healthcare costs and preserving optical colonoscopy (OC) for patients with higher risk. A non-randomized, prospective single-center study (n = 180, 68 used CTC) found that after 6 months CTC had a lower average cost (£607 vs. £316), reduced time between referral and care (3.6 day reduction), had an equal level of patient satisfaction, and opened up 46 OC scans for higher-risk patients.
  • Akumin Reopens: Akumin announced that it is starting to transition its COVID-only imaging centers to support all patients and is also opening the 17 centers that it temporarily closed during the CV19 emergency due to low volumes. Akumin operates 135 imaging centers and was among the first providers to designate COVID-only imaging centers, but is now seeing a return to more typical imaging as volumes rebounded from 55% below normal in mid-April to 25% below normal in late May.
  • AI Gender Imbalance: A new study out of Argentina revealed gender imbalances in AI datasets (NIH Chest-XRay14 is 56.5% male, CheXpert database is ~60% male) and highlighted the importance of gender balance for algorithm accuracy. The researchers performed AI tests with different gender balances in each training set (0%/100%, 25%/75%, and 50%/50%), finding that with imbalanced datasets (25%/75%) performance across all diseases was significantly lower for the less-represented gender. Meanwhile the performance with the more-represented gender in imbalanced datasets was just as accurate as both genders in balanced datasets (50%/50%).
  • PE Perspective: A Healthcare Growth Partners survey found that private equity funds expect that the COVID-19 disruption will drive slight declines in health IT valuations, but it will still outperform other sectors. The survey also found that solutions targeted at healthcare systems are seeing the largest drop in business, with the exception of virtual care and telemedicine (makes sense).
  • ER Down: CDC data reveals that U.S. emergency room visits were 42% lower in mid-April versus the same time in 2019, largely driven by declines among younger patients, female patients, and patients in the Northeast region. ER visits rebounded by late-May, but were still down 26% from last year, suggesting that patients are returning to their delayed procedures faster than they are returning to the ER.

The Resource Wire

– This is sponsored content.

  • With orthopedic care growing with the aging population, orthopedic imaging is growing along with it. This Hitachi blog details how more orthopedic practices are bringing imaging in-house and what factors they should take into account as they decide how/whether to add imaging to their suite of services.
  • This Nuance white paper shares insights from radiologists across nine U.S. healthcare systems on how AI is supporting their evolving roles and changing needs.
  • This Riverain Technologies case study details how Duke University Medical Center integrated ClearRead CT into its chest CT workflows, reducing read times by 26% and improving nodule detection by 29%.
  • Severe sepsis strikes more than a million Americans every year at an annual cost of more than $20 billion. Learn how point of care ultrasound can help improve sepsis outcomes in this GE Healthcare paper.

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