Equity, Organized Medicine, and the Radiology Value Chain

It’s often said that large organizations are difficult to steer and slow to change course, but that’s only part of why they sometimes act in seemingly inexplicable ways. There’s another more insidious reason, and that is conflicts of interest, not just within leadership but also in the changing demographics of the membership.

A passage from “Value Chain: Where Radiologists Should Put Their Focus in Threats Against Income” by Seth Hardy MD MBA in Applied Radiology:

So, while private/public equity firms can use leverage to amplify profits to the upside, leverage has an opposite effect when gross income is in decline. Any cuts to reimbursement would be truly devastating to these firms’ employees; since the debt holders get paid before the radiologists, the impact on employed radiologists’ salaries may be significant. As equity-employed radiologists make up a greater share of dues-paying members within organized medical societies, it is easy to understand why the proposed CMS cuts were characterized as draconian by those societies. But a clear understanding of value chain by physicians is increasingly critical to evaluate the rhetoric of our medical society leadership.

I am now a partner in a physician-owned independent radiology practice. A CMS paycut would mean that we earn commensurately less money–not that we will become insolvent.

That should count for something when choosing where to work.

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