SRC: A Classic Independent Practice Success Story

Initially, we knew that SR had a relationship with Intelerad and could help us get a discount on the product. The more we investigated it, the more we knew that there were a lot of other benefits that we could take advantage of just by being associated with a large group of physicians, all of which have the mentality that we do. We want to maintain our independence and remain a private radiology group, and try to stop the commoditization of radiology.

John Sparks, MD
President, Southern Radiology Associates
March 22, 2023

Southern Radiology Consultants (SRC)—a 25-radiologist practice based in Baton Rouge, LA—is a classic story of a well-run private practice that has succeeded by meeting every challenge and opportunity that crossed its path with excellent service and savvy business decisions. The group is one of Strategic Radiology’s newest members, electing to join in August 2022.

Incorporated in the late 1960s, the group was formed by three radiologists who had contracted with Baton Rouge General Hospital (BRGH) to provide radiology services. Shortly thereafter, the group inherited coverage of a 20-30 physician multidisciplinary practice where it inch hit for a radiologist who wanted time off and eventually retired.

SRC continues to serve BRGH and the clinic—now 150 physicians—but its business has multiplied exponentially since those early days. Said John Sparks, MD, who joined the group in 2000 and has served as SRC president for a decade: “This is the first time in my 25 years in the business that we are in a position to think about our contracts and pick and choose what we want to do.”

Organic growth in the Baton Rouge community provided some of the growth via the local hospital market. SRC also contracted with Ochsner to cover its Baton Rouge hospital, and that business has grown to four campuses. “We are doing more and more work for them all the time,” said Dr. Sparks. “We showed up, were nice, and did a good job, so we grew.”

The group also opened an outpatient imaging center in the ‘90s and a second location in Baton Rouge in the mid-aughts. “That resulted in a significant expansion of resources required to support the group—employees, equipment, buildings—and we were still doing everything on film,” Dr. Sparks recalled. “Our ability to expand was limited by our ability to go to locations. We couldn’t take anything too far away because we had to be on site to read films. That was a huge limitation.”

PACS Revolution Underway

In 2003, with the PACS revolution in full swing, SRC purchased its own PACS license and radiology information system to predominantly support its imaging centers. “We had contracted for some outside IT support, mainly to support our billing office, but once we got our own PACS and RIS, we started figuring out how to leverage that as a teleradiology platform.”

SRC’s growth exploded—by offering PACS services to hospital clients, the group expanded its footprint. “Now, instead of driving to a small rural hospital and working there for an hour then driving to another one and working there for an hour, we could read their exams in a relatively real-time fashion. They got better service, and we didn’t have to drive there.” 

The practice added physician offices, outpatient centers, and urgent care centers to its client base and continued to add radiologists: currently, the practice numbers 25 radiologists and about a half a million studies a year with locations as far as northern Mississippi and northern Louisiana.

“Without technology, none of that would be possible,” said Dr. Sparks, who began his career in the waning days of the film era and developed an early interest in PACS.  “It improved our efficiency, but it also greatly improved patient care. Our turnaround times have gone from type-it-up-tomorrow, to outpatient studies within an hour or two and stats in about 30 minutes.”

Challenge: Outpatient Imaging Downturn 

Like many other groups with outpatient imaging assets, the next decade was full of familiar challenges. Mergers created large specialty groups in the Baton Rouge area in orthopedics, gastroenterology, ENT, and urology and they started purchasing their own equipment. “We contracted with them to do the professional interpretations, but obviously they were doing the technical work, and we started losing a portion of our business just based on the fact that they had their own equipment,” Dr. Sparks noted. “And we weren’t getting those referrals.”

Combined CPT codes and same day-procedure policy changes coupled with the trend of hospitals purchasing internal medicine practices created a perfect storm of declining reimbursement and a shrinking patient base. SRC initially sold half its imaging center business to BRGH, its very first client.

“That arrangement went on for two or three years, and then we negotiated to sell them the entire portfolio of outpatient imaging centers, including real estate and equipment,” he reported. “Since we also got out of the billing business, we are now 100% in the radiology services providing business. We were never so glad of that as when we went through Covid, because we would have owned two imaging centers with no patients. The overhead would have been unsupportable.”

Opportunity: Market Transition

As he looks at the region, Dr. Sparks senses opportunity. “I think there is starting to be a lot of opportunity for us to provide coverage for other facilities because of the private equity situation,” he said. “The contracts of some of the private equity players are maturing, and I think they are having retention problems with the radiologists. In the next five years, I think there are going to be many more opportunities for us to expand our business if that is what we choose to do.”

While Dr. Sparks sees unprecedented opportunity in a previously competitive market, there is a limiting factor. “The biggest problem, and this will be no surprise to anyone in radiology, is that there will be no radiologists to hire,” he said. “Recruiting is extremely difficult, particularly to recruit people to staff facilities on site. Obviously, we still need to be in hospitals to do procedures and interact with patients and physicians to keep those relationships going.

“Though we have been moderately successful in hiring teleradiology people to help us off-site, we are finding that a lot of recruits, particularly people coming out of training, are more interested in off-site jobs. We are working towards modeling our practice to be able to support that more efficiently.”

Tech to the Rescue

Once again, BRC will look to technology to enable growth. The practice currently hosts its own PACS and RIS in a data center in Baton Rouge, but as a result of its Strategic Radiology affiliation, will switch to the coalition’s cloud-based Intelerad environment, enabling the group to shed the responsibility of maintenance/support and improve workflow with a system better suited to teleradiology.

“We wanted to move to a product that would give us more efficiency so that we can expand our practice,” said Dr. Sparks. “We had the idea that if we can’t get more people, maybe we can do more work. If you do the work more efficiently and keep it from becoming a grind—without degrading workday quality—then that is a way to expand our practice.”

Strategic Radiology’s Intelerad solution was the reason that SRC first became interested in membership, but the practice quickly discovered other benefits and commonalities.  

“The more we investigated SR, the more we knew that there were a lot of other benefits that we could take advantage of just by being associated with a large group of physicians, all of which have the mentality that we do," he said. "We want to maintain our independence and remain a private radiology group and try to stop the commoditization of radiology.”

In practice, Dr. Sparks acknowledged that SRC has realized many benefits since joining, including the ability to access like-minded people around the country who have already solved issues that SRC encounters.  “The combination of the philosophical, and the ability to save money on IT-related products drew us in, which we have done,” he said. “Actually, membership has been hugely beneficial to us from the savings standpoint, resource standpoint, and just being able to talk with other physicians about products and services.”

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