Potential Implications of Current Corporate Strategy for the US Radiology Industry

As consolidation within physician practices continues, not just in radiology, but many other specialties such as dermatology and emergency medicine, my coauthors and I offer some thoughts on these mergers.

The creation of value in horizontal mergers is dependent on abundant resources and “during times of labor shortages, acquisitions that do not provide a labor advantage, or worse have vacancies, will be value detractors.”

We believe that academic medical centers with their training pipelines have a strategic advantage over shareholder groups currently operating in medicine today.  As academic medical centers expand into the community they have the ability to compete aggressively with shareholder corporations, many of which are highly leveraged when compared to the typical academic medical center.

3 thoughts on “Potential Implications of Current Corporate Strategy for the US Radiology Industry

    1. I have many thoughts that are probably beyond the bandwidth of this blog, but fundamentally there seems to be two lines of thought in our industry. One group believes this the current consolidation is an “evolution” the other sees it as cyclical or a fad. While the truth is undoubtedly in the middle, I see cyclical tendencies especially in light of recent credit market volatility and physician group downgrades, and even default in the case of US Dermatology.

      Physicians need to be paying increasing attention to the creditworthiness of their employer and terms of their noncompete clauses so that if their employer fails, hopefully they can shelter in place and continue to serve their hospital and community.

      Of course, none of this is taught in medical school or residency.

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