private equity radiology Archives

In a stunning consolidation of the imaging services segment, Radiology Partners has agreed to take over radiology contracts currently held by debt-laden national medical group Envision Healthcare. The agreement could bring up to 100 imaging sites and hundreds of radiologists into the RadPartners fold.

The takeover is a remarkable comedown for Envision, which was once one of the largest national medical practices in the U.S. and employed some 25k physicians when it was acquired in 2018 by private equity giant KKR.

Envision’s business crossed multiple medical specialties, with its radiology operation at one point employing 800 radiologists who performed over 10 million reads per year.

But Envision struggled under a $5.3B debt load imposed by the KKR buyout, and eventually filed for Chapter 11 bankruptcy protection in 2023 in a move that also included spinning off its ambulatory surgery business.

Many industry observers have viewed Envision’s rise and fall as a cautionary tale illustrating the perils of private-equity investment in American medicine.

Radiology Partners itself has evolved into the giant of the imaging services segment as it rolls up local radiology practices into a massive national network. Under the agreement with Envision, RP will …

Take over Envision’s contracts with some 95 client sites, including teleradiology.
Potentially bring some 400 Envision radiologists onboard (assuming they want to join RP).

The question is, how many Envision radiologists will choose to go with the contracts and join Radiology Partners?

Speculation on industry bulletin board RadHQ.net proposes that Envision radiologists will be offered new contracts with RP – contracts that they can take or leave.

The Takeaway

Radiology Partners’ takeover of Envision’s radiology contracts will only enhance RP’s dominance of the imaging services market, which is already significant. While that may be good news to RP’s investors, it probably won’t be encouraging to those worried about the inexorable corporatization of radiology.

Private equity acquisitions of radiology practices ticked up in 2024 after two years of declines. A new paper in JACR sheds light on PE purchases in radiology, which have raised concerns about the corporatization of medical imaging in the U.S.

Private-sector radiology historically consisted of independent imaging practices run largely by radiologist-owners who contracted with hospitals to read imaging exams.

That model has begun to break down as radiology attracts investment from private equity investors eager to roll up what they see as a fragmented industry into larger companies that can leverage market power.

But what’s good for PE investors may not be good for radiologists – or for healthcare.

Private equity investment in healthcare providers has raised concerns that investors may be putting profits before patients.

The new study documents the rate of private equity investment in radiology from 2013 to 2024, based on queries of the Pitchbook and CB Insights databases, finding …

There were 113 PE-led radiology acquisitions over the full study period (out of a total of 4.3k radiology practices in the U.S. in 2023).
PE radiology acquisitions peaked at 18 in 2021, fell for the next two years, and ticked back up to 10 in 2024.
Most of the radiology practices being acquired employed 50-99 radiologists.
PE-led acquisitions were most common in the South.

So what’s to make of the numbers? A total of 113 acquisitions over 10 years isn’t that many (although the authors caution that acquisitions of multi-state or national practices and imaging chains would be counted as a single deal).

And the researchers acknowledge that there’s little data on the impact of corporatization on healthcare quality, at least in radiology (although they do cite a study showing that PE ownership was associated with an 8.2% increase in radiology prices).

The Takeaway

Private equity investment in radiology practices may still be in the early stages relative to other medical specialties, but radiologists will watch PE acquisitions closely for signs of how the trend may impact them. The new study serves as an important baseline for tracking future activity.

Tag: private equity radiology

RadPartners + Envision Consolidate Imaging Services

PE Practice Purchases Tick Up

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