Sutter Health announced it is buying Radiological Associates of Sacramento (RAS), putting an end to a stormy relationship between the Northern California healthcare provider and the radiology group.
Effective February 1, 2014, Sutter Medical Foundation will own and operate Radiological Associates, and RAS shareholder physicians will join Sutter Medical Group (SMG). Sutter Health expects to employ current employees of RAS.
The deal ends a dispute that mirrored the fundamental changes currently reshaping radiology. RAS had provided Sutter Health with imaging services since 1923, but in March 2010 the hospital notified RAS that it was letting its existing contract expire. A short time later, Sutter contracted with Radisphere National Radiology Group for nighttime reads.
Observers of the dispute saw Sutter's move as a sign that hospitals were increasingly playing hardball with radiology groups, driving harder deals in contracts as power shifts away from private practices. Things didn't go entirely smoothly for Sutter, however; newspaper reports indicated that Sutter was replacing Radisphere with another firm, teleradiology services provider StatRead.
At the same time, RAS has encountered a challenging environment in finding steady business in a market dominated by Kaiser Permanente, Dignity Health, and the University of California, Davis Health System, according to an article by the Sacramento Business Journal. The new deal gives Sutter access again to RAS physician expertise, as well as a stake in a teleradiology business RAS grew after the contract between the two ended, the Journal said.
Sutter currently owns and operates five imaging centers in downtown Sacramento, Elk Grove, Roseville, Davis, and Solano County. Once the deal with RAS closes, Sutter will own 40 imaging centers, six radiation oncology centers, and one interventional radiology center, according to the Journal's report.
