Since I started writing about private equity in radiology back in 2022 and more recently since featuring private practice jobs on the site followed by launching Independent Radiology, I often get questions that read something like this:
If private practice is so great, why are so many groups struggling?
Because it’s hard.
I believe that private practice is important. It provides an anchor for how doctors are paid and establishes standards for how a specialty chooses to practice. When employed positions are good, that is largely a direct result of the need to compete with private practice in a tight labor market.
However, it does not necessarily follow that all or even most practices are run well. It was relatively easy (I imagine) to run a business during the golden age of radiology; it isn’t easy now. And we should admit, without hesitation, that of course there are also poorly-run unsavvy groups just like we’ve all experienced poorly run hospitals and other businesses.
It’s also much easier to run an effective business when it’s a small democratic group where everyone has skin in the game and the desire to make it work. Increasing imaging volumes and increasing consolidation combined with increasing regulatory burdens and have resulted in overall fewer and overall larger groups. That increases the stakes and increases the complexity. The growing pains are real.
Instability is Everywhere
I do think the current shortage, shifting lifestyle demands, and the (probably temporary) sweetheart deals for mammo ultimately have destabilized radiology practice in general, not limited to but certainly including small democratic practices where radiologists wanted to be treated the same historically. (As in, a young breast imager’s desire for shorter workweeks of 100% breast without any evenings or call doesn’t easily jive with how many practices have historically practiced, and the need to play ball to recruit sometimes requires substantial chances to practice structure with negative downstream consequences). I think the shortage has absolutely shredded some democratic groups, especially those that are small with a lot of physical presence, call, or struggling to staff women’s imaging.
Everything is Local
The reality is that the success of any given model is in part predicated on regional dynamics. If the hospitals don’t have to play ball in tough group negotiations, it’s hard for groups to get what they need for retention and recruitment in the current climate. Stipends are increasingly table stakes to cover off-hours and on-site work in an era where direct reimbursement is falling and labor supply is insufficient. We aren’t a free market in medicine because we don’t control how much we charge. In a normal labor market, a labor shortage will drive up compensation. That needs to happen here too, but that money has to come from somewhere when it can’t happen organically from CMS or the commercial payors in our fee-for-service model.
Hospitals have the ability to supplement compensation with a fraction of technical fees and stipends, which means that–if they want to–they can (potentially temporarily) offer more money and potentially even a “better” job than a group relying on professional fees alone. They could give that support to a private practice so that the group is healthy, or if they are more daring, they can be aggressive and use that as leverage to bring the group in-house. In the short term, I imagine the downsides of employment for radiologists are probably pretty small right now. The market is so tight they can’t play too many games or risk the whole thing blowing up. Longer term, I am more skeptical.
The Tele Problem
One thing that gets lost in the generally increasing hospital stipend support trend and more remote work: some hospitals in less affluent areas will struggle to pay higher rates and may be hard-pressed to provide stipends needed to account for competitive compensation in the current market or high levels of bad debt from unfunded patients. Some areas are geographically undesirable, adding another wrinkle to any efforts at recruitment. If you can’t recruit to the area because no one wants to live there, then you need to pay for remote rads. But the market for remote rads is increasingly national, not local. Which means you need to be able to compete nationally.
The more people who want to do teleradiology, the more groups struggle to sustainably get the work done locally. So we can just say it: people’s individual desires are destabilizing the field. It may be reasonable for the individual and their family but no doubt it’s a growing problem for local high-touch practices. It also makes it easier for rads to quit their jobs for any reason and find work without having to make geographic changes. Lower friction means mobility, which means more volatility and churn.
But it’s essentially a tragedy of the commons situation. If everyone wants to work from home sometimes, no big deal. But if too many people want to work remotely too quickly, it’s hard for the industry to quickly accommodate and it destabilizes everyone’s work.
Note that instability here isn’t necessarily bad long term, it could even lead to long-lasting improvements in some domains. But, increased volatility and drama are inarguably close bedfellows with the current tele trend.
Could most radiologists give up contrast coverage, basically refuse to do the vast majority of fluoro of any kind, and be 100% remote? In some practice settings, probably. But the downstream long-term consequences of too much of the field going that way is to throw open the doors to replacement. The faster we consider practicing radiology only to mean interpreting imaging, the less real clout we have.
Consolidation is Real
One factor that does matter is size. Larger groups servicing a larger part of a large client are harder to replace, tend to be able to provide more remote work options, have dedicated nightfolks/less call, etc. A fragmented market with many small groups in the current era of big consolidated health networks, payer shenanigans, CMS cuts, and stupid MIPS compliance measures is less predictable than one with a few big groups that are busy enough that they really aren’t competing with each other so much as holding a line against the hospitals. These jobs aren’t always better. The groups may be culturally diluted and overall indistinguishable structurally from any other medium to large company. But, they may be more stable when faced with headwinds.
Ultimately, radiology is still a human enterprise. Relationships matter. Hospital leadership, radiologist leadership, other clinicians, the patients–they matter. So I do think it’s critical that no one should take an overall trend facing our field with a prediction for any specific group. There are thriving small groups that are killing it.
Macro trends are easy to opine about as a random person on the internet. But real life is lived in the details.
Risks & Opportunities
A staffing shortage climate nationwide is only an opportunity because it’s also a risk. The increasing complexity of regulation coupled with needing to work with increasingly consolidated revenue- and growth-focused mega health systems and fight large payors increases the stakes and bureaucracy of running a practice. And that can be especially hard when recruitment and retention are intrinsically unstable as everyone starts working harder than they want to.
There is a zero-sum recruiting component to the whole radiology enterprise where some companies with better contracts are able to at least temporarily offer better jobs on paper with more flexibility in order to handle their overflow or fuel their growth in remote coverage. Look no further than the recent United and Aetna lawsuits against Radiology Partners to see how one really great contract can provide the temptation to double down on arbitrage as the core business model (even in cases where it might be…illegal).
Dominoes are falling–and that means opportunity for others–but all that opportunity only exists because some practices are failing or falling behind or dropping contracts–and hospitals are desperate. For every group that comes in and sweeps up by landing some great contract, it means that someone else has downsized, failed, and/or some hospital was recalcitrant in how they approached an important negotiation. Even when everything works out well, it means there’s a lot of stress and conflict in the process.
In summary, I think a large part of the instability really has less to do with the practice model itself and much more to do with staffing shortages more broadly.
The reality:
I don’t think this is a simple time to be a radiologist or to run a practice, but I think the real existential difference between private practice and other models is that the hospital can get locums or pay extra for a different group if they are forced to, but an independent practice fails when it fails. There is no alternative: it either works or it doesn’t.
10 Comments
It has to do with staffing shortages because the model has extracted much of the revenues/profits from the older generations that got paid VERY well and are still hanging on, with less to worry about overall, but now with increasing demands to boot. That can’t work for younger rads who have to pay more in literally every way. The hospitals took a ton of the payment FROM PP and now are having to face up to the fact that their golden run of the last 15 years finally is blowing up in their face. It’s funny how they act like they haven’t been making $ hand over fist while stealing the technical via lobbying, etc.
The debate over private practice (PP) versus hospital employment often gets bogged down in minutiae, especially when discussing RVUs (Relative Value Units). The reality is, RVU-based comparisons are flawed because they don’t reflect a true market value, being heavily influenced by government-set rates.
The real measure of a radiologist’s market value is what it costs to fill a vacancy with a locum tenens radiologist. In the Midwest, I’ve observed rates around $4,000 for a busy 8am-5pm shift as of two years ago. This gives us a clearer picture of demand and supply dynamics, not distorted by artificially set RVU values. Consider how much more one would pay for evening, night, or weekend shifts?
Moreover, the attractiveness of non-profit hospitals for new graduates due to public service loan forgiveness significantly skews market dynamics, pulling talent away from private practices.
This brings us to an interesting question: What would be the radiology equivalent of “Direct Primary Care,” where insurance or government intermediaries are removed? For hospital-based practices, this seems challenging, but for outpatient imaging, it could be feasible if facilities offer transparent, cash-listed prices for every service. This could streamline costs and services directly to patients or referring physicians.
Looking forward, the trend towards employment might push the profession towards unionization. However, the true goal should be ownership, which aligns better with long-term incentives and professional autonomy. To make ownership appealing again, perhaps we need to rethink how we structure compensation, benefits, and practice models to realign incentives with quality care and professional fulfillment.
I remain hopeful for the future of medicine, but we must find ways to encourage entrepreneurship and ownership in radiology to maintain innovation and personal investment in our practices.
It’s interesting you mentioned DPC; it’s something I’ve thought about a fair bit over the years. My wife is in solo private practice, utilizing a direct pay model without insurance, which is very common in psychiatry (which is probably the only field that predates primary care in the utilization of concierge or other direct pay models).
While I suspect most people intuitively think that radiology has no room in that world, I’m actually of the mind that we’ll see that model come to fruition in the coming years, especially in the context of many high-deductible health plans. The amount of out-of-pocket money being spent by patients is already quite high such that paying a set predictable amount in cash for services, especially for high-touch or perceived better quality care, may be compelling (for better or worse). I’d guess we’ll see this first with local efforts at the wellness market aligned with concierge doctors pursuing their own versions of whole-body screening, cardiac risk, etc.
Look at Exza, PPl with cash are willing to pay for whole body MRIs. Same goes for cosmetic dentistry. When there is a value prop ppl are willing to pay.
The distinction with Ezra and Prenuvo is that they are offering a cash-based service that is outside of the offerings of regular healthcare, like when 3D fetal ultrasounds for momentos were pretty new like a decade ago. I think you’re correct, but the whole body screening primarily for the worried well is a somewhat different market and different value prop than most imaging. But I do agree with you.
It’s always been hard to run a private practice. Because of the human element. There is never true democracy. It’s more like animal farm. Everyone’s equal but some more equal than others and that splits groups apart.
One big downside of enterprise medicine and employment model you skip over is the same general thing. Many are based around academic centers which take over regional hospitals and practices. Then much of the complex interesting work flows downtown to the academics who will complain that the community rads aren’t qualified. Even though they trained said rads.
So not only is the autonomy and income at risk in such a model, but so is the intellectual challenge, the growth, and ultimately satisfaction of practice. It’s not all about the income.
The math doesn’t add up. Private practice used to pay substantially higher which made the enhanced effort financially worth it. Those days are probably gone. And unless one is willing to live in the middle of nowhere, has a sweet joint contract with a hospital, or practice at a rate that is at the margins of safety, the math doesn’t add up in the current marketplace. Anyone who thinks otherwise hasn’t looked at all the options. Why put in hundreds of hours of more time without being paid for it to end up at the same place (ie non clinical work running a private practice)? Or even worse— churn through cases so fast you’re missing stuff all over the place.
Not falling for the line about people’s self interests destabilizing the field. I paid $75 a day in interest to go through 6 years of graduate medical education. I think I’ve earned the right to put myself first. You sound like an academic.
If there were a surplus of radiologists, I’m fully confident that all of the private practices would underpay associates, avoid making lots of them partner, and do all sorts of unfair things.
Your language suggests that private practice radiology is a benevolent industry. It’s not lol. It’s ruthless! I’ve been a partner at a private practice before. I’ve been in the closed door meetings.
I’ve seen/heard this article has generated a lot of interesting discussion on and offline but has also touched a lot of nerves. For anyone in the market or trainees, I’ll address this comment at length because of the distortions:
1) I’ve argued in this post and elsewhere that thriving private practice is generally important, not that private practice jobs are always *better* from a financial perspective. They still actually usually are, but the point is that current “math” reflects the current reality that meaningful private practice exists. Competition is a good thing. The idea that PP = hard & crank and employee = chill & quality is a straw man. There are groups optimized across a spectrum of labor and compensation. You could be right the halcyon days of PP are “probably gone” but that is an unsupported assertion that differs from the “math doesn’t add up” in the “current marketplace.” A couple of snapshots in time usually aren’t a story; we have to make that.
2) Anyone is entitled to do whatever they want within the law. If my job were to go up in smoke, I wouldn’t move my family either. There is a distinction between my point (“actions have consequences”) and your interpretation (“you shouldn’t make choices”) — the tele trend has increased volatility in radiology staffing. That’s just the reality. As I said in the post, it’s not necessarily bad in the long term, but the impact is undeniable.
3) I don’t believe I’ve suggested PP is benevolent; I’ve suggested on the whole that it’s *important* for the field. I haven’t even suggested most are well run, and they certainly aren’t charities. They are much like other for-profit entrepreneurial endeavors and reflect a broad spectrum of operational approaches. I didn’t benefit in my longer 3-year workup from the current market, but the reality is that associate pay reflects supply and demand just like the currently improved employee offers reflect supply and demand. The solution, insofar as bad behavior goes, is transparency. I think every part of healthcare could use some more. The implication that doctors on the whole treat themselves worse than various hospitals or stripes of administrator I’m not sure is an accurate statement, but regardless this post attempts to outline some issues that make PP challenging, not to suggest everyone in practice sits around a campfire singing kumbaya.
1. Imagine a private practice that pays partners 550k with a 500k buy in over 10 years. Thats basically being paid 460-470k over 10 years to own a concentrated asset. Imagine an employed radiologist making 500k a year over the same 10 years and moonlighting with the extra time not spent doing administrative BS running a private practice. Pretty easy to come up with the other 50k in income. Instead of investing in a single asset, the employed radiologist could invest in a diversified index fund instead. Over a decade they’d be in the same spot. The employed radiologist would most likely be taking significantly lower risks than the partnership rad, probably have more free time. Over 2 decades the partner rad **might** come out ahead financially— key word might. Add in the potential for a few hundred thousand in PSLF, and it’s really a draw.
2. The impact is undeniable because everyone needs the work done somehow. But now instead of treating people who do the work in a room alone offsite differently than people who do the work alone onsite for contractual purposes (ie trying to profit off of the remote rads), the remote people have to be treated with respect. And if they aren’t well it’s pretty easy to change practices. Therein lies the challenge for private practices— they can’t profit off of remote rads because they’re desperate to get the work done too.
3. Transparency. Good luck. That’s kind of a pipe dream.
So many narrow assumptions used to paint with that very wide brush. Buy-ins, returns, workload, extra admin effort, long-term outlook, etc–all highly variable. How remote readers are treated? Highly variable, and all employers of all stripes need to adjust to reality as it shifts. It’s a practice model. It’s not destiny.