Radiology Practice Integration: Is it the Right Step for You?
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1 Radiology Practice Integration: Is it the Right Step for You? Lawrence R. Muroff, M.D., FACR CEO & President Imaging Consultants, Inc.
2 Disclosures Lawrence R. Muroff, M.D., FACR is the CEO & President of Imaging Consultants, Inc. This will not impact the scientific validity of the presentation.
3 Learning Objectives Discuss the spectrum of affiliations available to a radiology practice Assess the pros and cons of entering into an integrated practice Describe how the component practices will be governed, retain their local presence, and provide the scope of radiology subspecialty services required
4 As numbers go up linearly, problems go up exponentially
5 Before embarking on any merger discussions make sure that there is a compelling reason for the merger AND make sure that all group members are aware of that reason.
6 Reasons That Practices Affiliate 1) Protection a) from entrepreneurs b) corporate entities c) hospital systems 2) Geographic reach
7 Reasons That Practices Affiliate 3) Increased negotiating clout a) managed care entities b) hospitals c) purchased services i) night call/specialty reads ii) billing/collection entities iii) equipment; supplies
8 Reasons That Practices Affiliate 4) Economies of scale a) support staff i) business office personnel ii) marketing iii) licensing/credentialing b) purchasing (see 3c)
9 4) Economies of scale Reasons That Practices Affiliate c) consolidation of offices-business and clinical 5) Cross-coverage a) call b) vacations c) sub-specialists
10 Reasons That Practices Affiliate 6) Business opportunities a) MSO (billing & collecting; practice management, etc.) b) teleradiology i) call coverage/preliminary reads c) specialty reads d) final reads
11 Reasons That Practices Affiliate 6) Business opportunities e) medical-legal f) J.V. g) locums h) purchasing consortium 7) Forced mergers imposed by a hospital system
12 Affiliations can include many possible structures
13 The Spectrum of Affiliations 1) Purchase of services- one group from the other 2) Jointly owned separate company (JV) 3) Merged business operations; separate cost and revenue centers 4) Phased-in merger with an out clause 5) Immediate merger 6) Absorption of one group into another
14
15 Potential/Actual Problems 1) Self-interest or practice interest over joint interests 2) Failure to meet financial expectations 3) Quality 4) Service 5) Work ethic
16 Potential/Actual Problems 6) Time-off/vacation 7) Unwillingness to commit resources 8) Cultural barriers 9) Ineptness/lack of inertia 10) Unwillingness to cede power 11) Trust
17 Moving Forward ACR-RBMA Practice Leaders Forum
18 1) Procedural a) Legal b) Financial c) Operational Two Aspects of Any Affiliation 2) Cultural a) Perceptions and expectations b) Inter-relationships of the participants
19 Before you try to solve #1 (procedural issues), make sure that you can work through #2 (cultural issues). Consider facilitation. For both aspects, USE EXPERIENCED PROFESSIONALS!
20
21 Mergers: The Dream An efficient melding of two or more practices utilizing the strengths of each for the benefit of all, while further saving money through the elimination of redundant services and personnel
22
23 Mergers: The Nightmare A disruptive melding of distinct practices paralyzed by an inability to blend diverse practice cultures and crippled by mutual mistrust.
24 Alignment: Opportunities and Perils
25 Alignment mergers can be driven by both internal and external factors. If you have an opportunity to take the lead, do so.
26
27 A Checklist for Moving Forward 1) Have a compelling reason to merge 2) Make sure that your practice members understand the reason and are in agreement to move forward 3) Understand the benefits and the consequences of merging
28 A Checklist for Moving Forward 4) Understand the strengths and weaknesses of your merger partner 5) Have the leadership of both/all groups discuss (facilitated) the possible cultural barriers 6) Consider a social opportunity for the members of both/all entities to meet
29 A Checklist for Moving Forward 7) Engage experienced professionals (lawyers, accountants, facilitators) 8) Phase in the process and have an exit opportunity before the merger is final 9) Be prepared to put aside self-interest and/or practice interest for the benefit of the new entity
30 A Checklist for Moving Forward 10) If merging/affiliating/joining a non-traditional entity, make sure of the following: a) what are the benefits b) what are the obligations c) what are the restrictions d) how can you opt out
31 A Checklist for Moving Forward 11) Remember the new game in town - ALIGNMENT a) If there is an internal opportunity, take the lead b) If the driving force is an external relationship, understand your options c) Scenario plan before you have to act
32 Good Luck! ACR-RBMA Practice Leaders Forum
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