Pitfalls of Private Equity Takeovers

You may have heard about this absurd story in the NYTimes a few months ago: An academic journal pulled a legitimate article comparing practice characteristics of groups that take on private-equity funding and those that do not. Why? Because a PE firm put the squeeze on their editor, that’s why:

In an interview, Dr. Hruza [the incoming president of the American Academy of Dermatology and board-member of United Skin Specialists, the largest PE-backed derm practice in the country] said he did not ask that the paper be taken down. He did, however, confirm that he expressed his concerns to Dr. Elston, the editor, after it was posted. Two days later, Dr. Elston removed the paper.

From the reporting in the times, this situation is absurd. If people have quibbles with the conclusions of a peer-reviewed article, then they should write a commentary. You don’t get to line-edit someone else’s manuscript.

Dermatologists account for one percent of physicians in the United States, but 15 percent of recent private equity acquisitions of medical practices have involved dermatology practices. Other specialties that have attracted private equity investment include orthopedics, radiology, cardiology, urgent care, anesthesiology and ophthalmology.

PE firms are following the money. However, their primary objective of extracting profit doesn’t necessarily equate with an understanding of how to actually run a successful, responsible, and sustainable medical practice.

Dr. Konda, [the paper’s lead author], said he first grew interested in the topic when several of his trainees went to work for private equity-backed practices and told him of clinical environments that emphasized profits at the expense of patient care.

 

With that preamble, check out this interview with radiologist and former PE analyst, Kurt Schoppe, MD on Radiology’s Nearest Threat, Commoditization, and the Misguided Notion That You Will Be Paid for Everything You Do.

 

Lots of excellent responses, but these three quotes give you a nice flavor of private-equity takeovers in broad strokes:

One of their favorite marketing lines is “physician-owned or physician-operated.” That’s really a misdirection because, frequently, they set up a holding company under which the physician group is a wholly owned subsidiary. Yes, the physician group is owned and operated by physicians, but it is not controlled by physicians because, as a wholly owned subsidiary, the parent corporation, or the holding company, is going to have absolute control. That holding company is not majority-owned by the physicians. The wording on the contracts is going to be such that the PE firm or the corporate entity is going to have control over the parent entity when it needs it.

What I’m getting at is no matter what the marketing says, no matter what they are telling people when they are selling services, these entities must make money for their owners/investor as their primary objective. Changing the economics of radiology group ownership is not fundamentally about the patients or saving money for the payers. They do these things to make money for their investors. This is not a negative judgement, it’s just a fact. If physicians want to sell their practice, if someone is only 4 or 5 years from retirement, and they only have a 4- or 5-year hold on their contract after they sell their group, well, that is just logical. From a purely personal economic point of view, it makes sense for them to sell, because they are not looking at a 15- to 20-year timeline.

The people who need to look out for this are the people in training, the people coming out of training, and the younger physicians in the group who have a 15-, 20-, 30-year timeline. If your goal when you came out of medical school was caring for patients, positively affecting the health care environment, or doing things for the greater good, I think you are better able to do that as a physician group in which you decide, as a group, how much money you need to make, what sacrifices you choose to make, and for whom you will charge less. If you cede control of your decision-making to a group that will only be motivated by its ability to make returns for its investors, you’ve put someone else in that conversation who does not necessarily share your values and ethics as a physician.

Anyone joining a hot-bed field like dermatology or radiology needs to understand the business model of your chosen profession and evaluate the health of both the practice and local market you consider joining.

While partners may get short-term windfalls in some buyout scenarios, non-partner employees are the primary profit source. Spending time in a partnership-track without eventually being a partner is a waste if the position becomes untenable and you need to start fresh somewhere else.

Review: Proscan’s MRI Online

MRI Online is an advanced (MRI focused) online radiology video platform offered by Dr. Stephen J Pomeranz, who is primarily a musculoskeletal radiologist. Just one dude. This in contrast to most online offerings in radiology, which are typically recorded board reviews or CME lectures from the big popular courses at places Stanford, Hopkins, Duke etc. Multiple folks talking about multiple topics. Those production values tend to be relatively low because they’re typically recorded from normal in-person talks with the best of intentions (but without the best of audio engineering).

I was recently offered the chance to check out MRI online. I had the intention of spending time with it to help with studying for the certifying exam, but then I ended up not studying. That’s a separate story.

Anyway.

Content

There are several different kinds of content: “Mastery series” lectures are divided into digestible 5-10 minute chunks. “Lecture series” are more typical hour-long lectures (some of these are a bit older). “Courses on Demand,” which are recordings of in-person case reviews (my least favorite). And lastly, “Power Packs,” which are interactive PACS-integrated cases with questions and explanations (but no video).

Platform

MRI Online uses the Teachable platform, which is basically what every new course you’ve seen advertised on Facebook uses. Teachable is simple to use, especially well-suited for video courses, and produces a clean product, so there’s no secret why.

There are pre- and post-tests available, but these tend to be short little multiple choice deals (often text-only). Nothing special there. This is definitely not aiming to be a q-bank.

More importantly, Teachable videos have the ability to be sped up, so you can pick your pace accordingly.

What separates MRI Online from just about every other product out there is that the case review components are integrated with an online PACS. You can review the cases (scroll through stacks, multiple sequences, window/level, etc.), read them cold, and then essentially go through them with Pomeranz or with a written explanation. It’s interactive. It’s practical. It’s reflective of real practice. It’s basically like being a resident or fellow, except that you’re on your own pace, the cases are carefully curated, and your teacher isn’t too busy to teach. It’s pretty neat.

Pricing

Pricing is a bit of a mixed bag.

The in-training price is actually pretty reasonable ($50/month or $500/year). In particular, if you have plans to do an MSK mini- or real fellowship, going through MRI Online would be a great introduction and much less painful than Requisites. For cost reasons, I think any trainee is probably going to buy on a month by month basis when they have time and not to fork out for the year.

(Talk about responsive, the price for fellows used to be $100/month. When I pointed out that fellows don’t really make significantly more than residents, they dropped the price a week later.)

While there’s also a lot of content for neuro (and some prostate), I think most people probably wouldn’t need to buy more than a month if your focus is non-MSK. Proscan tells me they’re adding tons more non-MSK content this year, so I imagine that’s likely to change.

The price for folks out in practice gave me a bit more sticker shock at first: $150/month or $1500/year. That said, you do need CME, lots of practices do provide CME funds, and course reviews and conferences are generally even more expensive and not amenable to pajamas. MRI Online provides real ACCME CME credits, which for the price are actually a bargain depending on how hard you pound your subscription.

I wouldn’t pretend to have the ability to compare and contrast any of the huge number of course reviews that exist in radiology, but MRI Online is definitely better than a lot of conference talks I’ve gone to at RSNA, ASNR, WNRS, ABCD, and WXYZ.

Here’s where the usual negotiated discount/affiliate stuff comes in:

Code BW_ATTENDING gets you 10% off ($135/month or $1,350/year). Residents and fellows, please email mrionlineresident.bw@gmail.com for an extra 10% off.

The annual subscription also includes a free MRI anatomy atlas as well as free attendance at a 3-day MSK MRI course held annually in Cincinnati. They tell me the vast majority of subscribers are annual, not monthly.

Free Samples

There’s a free online MSK mini-course with a sample of cases (that you would need to sign up to take).

There are also sample videos for each course (e.g. shoulder, hip) that you can watch without logging in, as well as sample cases for basically every course. You’ll get a history, review the cases in the diagnostic viewer, then answer a multiple choice question about them. The explanations have annotated lesions and a relatively concise readable description.

They also provide a full free 7-day trial, which is a real steal for trainees or for focused test-prep.

Bottom line is that there are plenty of no-risk opportunities to check it out. There’s lots of totally free content and no bait-and-switch in sight. I wish more companies were this transparent.

Conclusion

MRI Online is actually an impressive and pretty expansive product, particularly for MSK, but also with hours of content for neuro and body. In addition to solid review, I’d definitely consider signing up again if I changed practices and needed to expand my toolset.

Journey to the ABR Certifying Exam

If there is little information online about the ABR Core Exam, there is essentially none about the Certifying Exam. After several years, the only nuggets on the grapevine were that it was easy, nobody has ever failed, and you might as well do all your selected modules in the field of your fellowship.

All of that is probably true. But just as diagnostic imaging for pulmonary embolism in the ER is always indicated, more information is always better, right? Continue reading

Q&A: Pros/Cons of Choosing Radiology

Answers to some frequently asked questions about being a radiologist:

 

How bad is the grind?

Depends.

Is there a race to the bottom?

Yes.

Do procedures add or detract from the grind?

Depends.

Do you begin to feel comfortable with radiology material during residency?

Yes.

How much studying do you need to do? Does that need follow you home every day?

Depends.

How exhausting is the work?

Mentally, quite. Physically, depends on your posture.

How easy is it to have a life outside of radiology/medicine?

Easy.

 

Hope that clears things up!