The pandemic is having several short- and long-term impacts that could change the face of private radiology practice.
Private radiology practices have taken the brunt of the financial hit during the COVID-19 pandemic, new research has revealed. It is an impact that has pushed practices to make drastic changes in a variety of areas.
In an article published recently in Radiology, members of the Radiological Society of North America COVID-19 Task Force pointed out that not only have radiologists experienced a roughly 40-percent cut in compensation this year, but the private practices for which they work are feeling the sharp pinch of drops in volume.
“Patients have shunned hospitals and medical services,” said the team led by Rich Sharpe, Jr., M.D., MBA, senior associate consultant at Mayo Clinic in Scottsdale, Ariz., noting that many high reimbursement services plummeted while low reimbursement services increased. “Examination volumes in radiology practices have decreased by 40 percent-to-90 percent, which some anticipate could persist for a few months to a few years.”
Overall, these changes could have many short- and longer-term financial implications for these practices, the team said. Given the wide variation in how the outbreak is affecting all geographic regions nationwide, it has been difficult to identify any best practices for handling these financial blows. Consequently, practices have tried several things that could have lasting impacts. For example, for the future, the individual radiologist could see their base pay become a much smaller component of their whole compensation with greater emphasis being placed on productivity and performance.
In the here-and-now, however, the RSNA team said, private practices have turned to several tactics in an effort to stay afloat financially. In many instances, groups have reduced provider hours to roughly three days a week or shifted some of their salaries in order to still provide paychecks for nurses and technologists. Other practices have pushed radiologists to take unpaid leave or forego bonuses.
But, the strategies do not stop there. According to the team, several practices have eliminated their contracts with temporary and locum tenes radiologists, while others have released radiologists who had not yet made partner, and many have chosen to rescind offers of employment. Providers have also seen their administrative and education time truncated and their payments for after-hours work disappear.
From a brick-and-mortar perspective, a number of practices have also postponed any improvements to their building or equipment. And, some have also looked to control how much money their paying out every month by either re-negotiating their equipment or rent payments, as well as re-financing their interest rates.
During the early days of the pandemic, many in the industry predicted that consolidation would be the likely safety net for these smaller practices. As the outbreak has dragged on, however, even the larger groups are feeling the financial woes, making them less attractive options.
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“The COVID-19 pandemic exposed some of these firms as being more fragile than initially anticipated,” said Sharpe and his colleagues. “Like a slingshot already retracted to its breaking point, some of these firms were excessively leveraged at the outset of the pandemic. This was the result of a trend of leveraged buyouts that depended on growth to succeed and left little room for increased financial backing during the pandemic.”
Still, there will be some movement toward greater consolidation as some groups continue to struggle for survival, said Brian Kuszyk, M.D., president of Eastern Radiologists in Greenville, N.C.
“We anticipate that small radiology practices may be at greatest risk for consolidation with larger radiology groups that have a more diversified practice model regarding inpatient-outpatient mix, subspecialty serviced lines, and geography,” he said.
Ultimately, the team called for private practices to play a greater leadership role in the larger conversation of how radiology should be responding to this lingering pandemic, the team said.
“Variations in how academic and private practices, particularly those in more rural communities, have experiences the burden of disease has led to differing views on important issues including the timing of starting and stopping routine screening mammography and non-urgent outpatient imaging,” the team wrote. “This phenomenon highlights the need for private practice community-based physicians to participate in the development of national trends and standards, and for those national trends and standards to incorporate appropriate flexibility for local healthcare environments.”