Radisphere targets community hospital radiology contracts

November 11, 2010

Teleradiology provider Radisphere is targeting community hospitals unhappy with small radiology group practices.

A one-time ally to local radiology groups is now trying to dislodge them, and its executives are making no bones about their newfound appetite.

Radisphere, formerly a teleradiology provider known as Franklin & Seidelmann, is  targeting community hospitals that are, for one reason or another, unhappy with small radiology group practices and, therefore, open to its pitch as a national radiology group.

The Cleveland-based company puts one or even several generalists onsite, depending on the volume of procedures, then uses its national network of subspecialists to handle difficult cases. More than half the cases are read offsite, but Clayton T. Larsen, senior vice president of client and network development at Radisphere, balks at the suggestion that Radisphere is a teleradiology firm.

“To do what we do, you have to be a full-service radiology practice,” Larsen said in an exclusive interview with Diagnostic Imaging. “That includes daytime onsite reads and full final subspecialty reads; it is doing nighttime final reads and providing the actual dictation infrastructure so (clients) can eliminate all of their transcription. It is providing the critical findings process and doing the billing.”

Radisphere does all this and more. The company has established credentialing, licensing, and privileging practices nationally for its radiologists.

“This allows us to cast our expertise broadly and bring our services into a community where we have never been before and, within 60 or 90 days, have our radiologists privileged and credentialed with the local payers.

Larsen notes that a teleradiology company just bills its clients, either the radiology group with whom it contracts or the hospital where its services are provided. That’s because teleradiology firms typically perform only preliminary reads, which are not reimbursable by insurance companies.

Radisphere entered the radiology community nine years ago as Franklin & Seidelmann, a kind of teleradiology provider. Its business model was to provide subspecialty interpretations to radiology groups.

In this role, the company was a friend to radiology groups. Today its raison d'être is to take business away from those groups, specifically ones serving hospitals of 50 to 400 beds. Radisphere pitches its services directly to the CEOs and CFOs of these hospitals, the same as local and regional radiology groups.

The company has been compared with Walmart, but this predatory model, with its emphasis on discount pricing, doesn’t apply, Larsen said. Quality is a guiding principle of the Radisphere business model.

“It starts with quality, supported by technology infrastructure and support personnel and based on our deployment model,” he said. “It just so happens that this delivers cost savings.”

Radisphere, according to Larsen, is akin to a national grocery chain whose stores offer better quality and a broader variety than could be found at the corner store.

But even this model may fall short as a predictor of what lies ahead, according to Larsen. Traditional radiology practices need not go the route of corner grocery stores, at least not the practices with adequate resources.

“As we up the ante in terms of quality, other large radiology practices and regional radiology groups will have to continue to improve,” Larsen said. “So, if anything, we will, by proxy, help improve the level of service in radiology across the country, but not necessarily as the predominant model for delivery of radiology.”