Sounds like an interesting title for a terminator movie. The radiology professional services market is undergoing tectonic shifts in outpatient and hospital based radiology departments. The rise of large telerad providers such as vRad and RadNet serve to commoditize the actual service of professional interpretation of films.
The obvious scales of economy and 24-7 coverage and lack of geographic constraints have created a power struggle between independent groups and the national providers. vRad has concentrated its efforts on taking market-share at the hospital provider level and changing from a nighthawk only model to daytime and nighttime reads. Ultimately vRad will take its place but not be able to sustain a relatively good growth rate to reward shareholders. It should be a private company.
RadNet however has over a 100 outpatient imaging centers in its footprint as well as a strong hospital professional business. Their strategy will be superior. RadNet in certain places such as Maryland now has the lion's share of outpatient imaging. Since insurance contracts are generally a state-level negotiation. RadNet will be able to leverage their market size and negotiate better rates. This sounds like possible anti-trust litigation potential, but does create the more viable revenue stream and a better business model than vRad.
The rise of large corporations only serves to divert professional revenues from the doctors to private parties and shareholders. It may be time that independent groups retain their sovereignty but invest in back office/shared infrastructure type agreeements to achieve the same economies afforded by the big players..... or just join them.
The obvious scales of economy and 24-7 coverage and lack of geographic constraints have created a power struggle between independent groups and the national providers. vRad has concentrated its efforts on taking market-share at the hospital provider level and changing from a nighthawk only model to daytime and nighttime reads. Ultimately vRad will take its place but not be able to sustain a relatively good growth rate to reward shareholders. It should be a private company.
RadNet however has over a 100 outpatient imaging centers in its footprint as well as a strong hospital professional business. Their strategy will be superior. RadNet in certain places such as Maryland now has the lion's share of outpatient imaging. Since insurance contracts are generally a state-level negotiation. RadNet will be able to leverage their market size and negotiate better rates. This sounds like possible anti-trust litigation potential, but does create the more viable revenue stream and a better business model than vRad.
The rise of large corporations only serves to divert professional revenues from the doctors to private parties and shareholders. It may be time that independent groups retain their sovereignty but invest in back office/shared infrastructure type agreeements to achieve the same economies afforded by the big players..... or just join them.
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