Consolidation in Radiology 2.0—Look Before You Leap

Where are US Diagnostics, Radiologix, InSight, CMI, etc., now? They don't exist. What assurance do you have that you're aligning with an entity that is going to survive more than 5 to 10 years, the typical private equity cycle between sales? 

Wayne K. Baldwin
CEO, Pueblo Radiology Medical Group
September 12, 2018

By Wayne K. Baldwin

In a prior life, I was General Counsel and Chief Development Officer for Comprehensive Medical Imaging, a Baldwinconsolidator of outpatient imaging centers across the country.  It is interesting to me that consolidation has again become in vogue.  

Names like US Diagnostics, Radiologix, InSight, and my old company CMI were actively consolidating imaging centers in the late 1990s early 2000s.  The current iteration of consolidation has different actors, but much the same approach—pay a multiple of earnings for practices under the assumption that, somehow, bigger means more efficiencies, better technology, smarter management (all arguments for prior rounds of consolidation). I'm not sure how all of that plays out in reality, but when you talk to any consolidator, it can sound pretty good.

Is consolidation a bad thing?  Not necessarily, but for those considering consolidation, I'd think about a few things pretty seriously first.

  • Know who you are. Understand who you are as a radiology group to be sure that everyone can live with what you are getting into.
  • Know what you want out of any consolidation.  Why do it?  Again, I submit that you can't really know what you want until you know who you are as a group.  Do you just want to cash out and retire? Is the short-term money enough to make a difference in your life if you are going to continue to work?  
  • Know the options.  There are a variety of consolidation options and alternatives.  If you really think you need to consolidate, consider all the options including mergers, acquisition, joint ventures, and divisional affiliations just to name a few.  Each of the options allow you to maintain varying degrees of autonomy and control.  Think it all through.
  • Thoroughly research your suitor.  What is their motivation for acquiring you?  What is their source of funding?  What do they bring to the table that you don't have?  Who do they answer to for their investment decisions?  What do they want out of you?  Typically, there comes a day of reckoning with all investments, and investments in radiology are no different.
  • Be realistic.  You will still be reading films at the end of the day.  Is this going to make your life better and for how long?  Or, is it actually not going to be any better and maybe even worse?
  • Learn from the past.  Where are US Diagnostics, Radiologix, InSight, CMI, etc., now?  They don't exist. What assurance do you have that you're aligning with an entity that is going to survive more than 5 to 10 years, the typical private equity cycle between sales?  All of this is contingent on who the suitor is and to whom they answer.


Spending adequate time to understand your group, its ethos, and market position should precede any decision to consolidate. These ten questions are a good place to begin:

1. How much does your group value independence?

2. Does your group have strong leadership?

3. Do you have a leading market position or are you struggling to keep up with the competition?

4. Do you have trouble recruiting and/or retaining radiologists?

5. If completely or partially hospital based, what is the status of your hospital relationship, and how would the hospital view a consolidation?

6. Do you have younger radiologists who exhibit leadership potential?

7. What are the financial metrics of the professional practice such as professional revenue per radiologist, RVUs per day, etc., compared to other similarly based practices?

8. If you have an outpatient practice, what are the financial metrics of your outpatient facilities such as EBITDA, collections, age of equipment, payroll costs, service costs, etc?

9. Are you good at billing and collection and what does it cost you?

10. Does your technology allow you to practice efficiently and keep up with regulatory requirements such as MACRA/MIPS reporting, clinical decision support (appropriate use criteria), registry reporting, etc.?

This is just a start, as the list of questions should be quite lengthy.

Thank you for indulging my pontification—recent conversations with colleagues suggest it is something on a lot of people's minds.  I hope it helps someone out there.

Wayne K. Baldwin is CEO, Pueblo Radiology Medical Group, an independent private radiology practice based in Santa Barbara CA. A version of this article first appeared as a post on an RBMA discussion board.


Subscribe to Hub
News from around the coalition and beyond

Hub is the monthly newsletter published for the membership of Strategic Radiology practices. It includes coalition and practice news as well as news and commentary of interest to radiology professionals.

If you want to know more about Strategic Radiology, you are invited to subscribe to our monthly newsletter. Your email will not be shared.