Merger in southeast creates one of 10 largest practices

March 5, 2010

Two radiology practices have merged in North Carolina. That may seem like a flash in the pan, but is actually indicative of a growing trend.

Two radiology practices have merged in North Carolina. That may seem like a flash in the pan, but is actually indicative of a growing trend. Practices across the country are coming together to improve service and stay afloat in this difficult economy.

Charlotte Radiology and Cabarrus Radiologists joined together as of Jan. 1 to provide subspecialty radiology services to several hospitals in the state including Carolinas Healthcare System hospitals in Mecklenburg, Cabarrus, Union, Lincoln, and Anson counties, as well as Scotland Memorial Hospital, Davis Regional Medical Center, and First Health Richmond Memorial Hospital.

The groups will keep the name Charlotte Radiology and employ more than 80 radiologists in 10 subspecialty areas ranging from pediatric imaging and breast imaging to neuroradiology and musculoskeletal radiology. The merger makes Charlotte Radiology one of the top 10 largest practices in the country.

“It's not too often you get this opportunity for two larger groups to come together,” said Fred Gaschen, executive vide president of Radiological Associates of Sacramento, another of the top 10 largest practices. “And when you do, you get management synergies, billing synergies-you get economies of scale.”

There are financial implications for joining with other groups because more people means the practice can afford to have someone oversee quality, which, in turn, enhances the group's reputation, he said.

In the past 10 years a lot of mom-and-pop radiology groups have merged together, he said.

“As an organization, over the last 15 years we've merged [with] or bought four or five other practices,” Gaschen said. “I think there are advantages to that.”

Advantages include expanded subspecialty capability. It's unlikely a three-person group would be able to cover all of the subspecialties a larger group can, he said.

Larger groups are also better equipped to respond to the market pressures radiology faces, according to Tom Greeson, a healthcare attorney with Reed Smith.

“What it's all about is providing the appropriate 24/7/365 coverage with the right radiologist to read each particular study,” he said. “There's still a value for the general radiologist, but there's also a value for radiology groups to have as much subspecialty expertise as available.”

The larger the radiology group, the better the care and the more coverage they can offer, Greeson said.

It's also incumbent upon the radiology group to see that hospital administration views the group as a benefit rather than as a threat.

Radiology practices stay the same size relative to hospitals, so as more hospital systems consolidate, so too will radiology practices, said Dr. Arl Van Moore, president of Charlotte Radiology. It doesn't make sense to have two radiology groups practicing side by side if they're covering the same turf, he said.

“With respect to call coverage and in terms of trying to get various subspecialty areas covered, it's much more inefficient to have more groups trying to do the same thing than just one group that's much larger trying to do it all but do it at a higher level of expertise and integration,” he said.

Smaller groups have a much harder time when it comes to things like night call, what they spend on billing, malpractice, and other items, Gaschen said.

“In all those things you can find benefits by integrating practices,” he said.