A Take on the Radiology Community

Howard B. Kessler, MD

The structure and governance of radiology practices continue to evolve for an industry in flux. Indisputable evidence points toward a future under siege from external forces (turf battles, cuts in per-unit reimbursement, rising costs) and internal pressures to become more efficient, business savvy, and technologically proficient.

Radiologists are beginning to look at alternative opportunities. Generally speaking, these revolve around autonomy, lifestyle changes, and a desire to work as an independent entity contracting to perform work outside the confines of the traditional group practice. Trends and new options are converging to create alternatives previously unheard of.

Is the traditional partnership-oriented model under siege? First and foremost, physicians coming out of training and established radiologists interested in new job opportunities tend to focus on compensation and time off. To a lesser degree, various surveys and recruiters cite as key components in selecting practice opportunities group governance, group stability, decision-making, and the terms and conditions of partnership.

With new options, the recruitment and retention of younger radiologists are in a state of disarray. With alternatives available to practicing physicians, the present model is vulnerable to the technology-savvy new generation of radiologists, desirous of change, looking for greater autonomy and opportunity. As with other industries, the next generation of radiologists and entrepreneurs are poised to restructure the industry through enabling technology. The innovations at hand include high-speed transmission of data and the software capabilities to permit seamless functionality outside the workplace. State and federal requirements to interpret virtually and hospital privileging concessions, including telemedicine categories for medical staff privileges, represent hard-fought concessions to the new paradigm.

In preparing this article, I used a common search engine to query PACS-Teleradiology-Nighthawk and came up with 941 separate companies in the United States and abroad offering remote reading services. No doubt countless others exist. Among the largest and most successful are Nighthawk Radiology Services and Virtual Radiologic led by Paul Berger, MD, and Sean Casey, MD, respectively. Within the past 5 years, these companies identified the need, and created the solution and the methodology to move images after hours. With revenues approaching $200 million and market capitalization in excess of $1 billion, these successful companies have demonstrated the interpretation of radiology services in a remote or virtual model as a viable business with tremendous upside potential.

Despite the rapid growth of these virtual entities, this remains a large, fragmented, and essentially untapped market with professional fees exceeding $20 billion in 2007 and growing at an annualized rate of 8% to 10%.

The only uncertainty is the trajectory with which this growth occurs. There are basic trends in all sectors of the economy, in both the public and private sectors, resulting in the migration toward working off site, frequently at home. In a recent article published in The New York Times, "... by 2006, according to data collected by the Dieringer Research Group, a marketing research company in Brookfield, Wis, more than 28 million Americans were working from home at least part time—an increase of 10% from just the year before, and 40% from 2002."

In my opinion, the future of virtual radiology seems certain. The traditional model of commuting to work, under rigid constraints of geography, in partnership models that appear inflexible and outdated will not prevail. Contrast the existing model with the concept of providing virtual radiology services in venues as exotic as Hawaii, the ski slopes of Aspen, the magic of Manhattan, or perhaps the comfort of your home.

History has a way of repeating itself. Ten years ago, the concept of sending cases over the Internet to be read in Sydney, Australia, was anathema. Five years ago, most practices were entrenched in a long-standing and successful model of providing radiology services in hospital settings without the resources to explore or the acquiescence from hospitals for remote reads. There was, and in many instances continues to be, an expectation that work performed at an acute care facility will for the most part be interpreted at that location. Times and circumstances suggest that we are moving away from that model. What will practices and the delivery of service look like 5 years hence? I suspect that we are on the precipice of change, poised to redefine how we practice radiology.

This is a quiet revolution. The traditional practice model is likely to survive for the foreseeable future. It is inevitable that newer models armed with the latest technology, software, and innovation will gain market share as physicians, practices, and facilities seek to fulfill disparate needs and expectations. Physicians will seek out alternative circumstances to practice, models that reflect their desires and expectations.

Howard B. Kessler, MD, is a radiologist and member of the Imaging Economics editorial advisory board. For more information, contact .