Private equity acquisition is on the rise in radiology, according to an analysis published March 5 in the American Journal of Roentgenology.
Private equity firms acquired more than 150 radiology practices involving nearly 3,500 locations between 2013 and 2023, according to research performed by Mihir Khunte and Yashaswini Singh, PhD, from Brown University in Providence, RI.
“High private equity penetration may allow … firms to negotiate higher reimbursements and increase imaging utilization,” the duo wrote. “Although poorly studied, private equity firms may also facilitate investments in IT infrastructure and technology.”
While healthcare as a whole has attracted private equity companies, radiology has become an area of focus. Khunte and Singh suggested that this is due in part to radiology’s reliance on advanced technology and IT infrastructure, growing demand, and favorable reimbursement rates for diagnostic imaging services.
The researchers evaluated imaging practice acquisitions in the U.S. by these firms, focusing on the resulting geographic concentration of private equity-employed radiologists. Final analysis included data collected between 2013 and 2023 from various financial and medical databases such as PitchBook, ad hoc web searches, and Medicare.
The researchers identified 151 private equity acquisitions during the study timeframe. This included a minimum of five acquisitions in 2014 and a maximum of 26 in 2019. The researchers reported that at least one acquisition occurred in 34 states and in Washington D.C. Acquisitions most occurred in Texas (n = 27), Louisiana (n = 17), and Florida (n = 13).
Compared with 2013, where 0.88% of all radiologists in the study were under private equity employment, the research duo reported that 11.7% of all radiologists nationally in 2023 were private equity-employed. The latter includes 12% of all diagnostic radiologists and 6.7% of all interventional radiologists who were under this employment.
Also, the states with the highest percentage of radiologists being private equity-employed in December 2023 (the study’s end date) included Nevada (46.5%), Arizona (44.2%), Alaska (29.1%), Texas (26.9%), and Florida (23.9%).
Radiology Partners (70.4%) made up the largest proportion of private equity-employed radiologists nationally, followed by LucidHealth (8.2%) and U.S. Radiology Specialists (6.7%).
Finally, in December 2023, private equity-acquired radiology practices were associated with 3,463 practice locations. That's 16% of 21,556 national practice locations, the researchers wrote.
Khunte and Singh called for future studies to evaluate the impacts of private equity involvement in several aspects of radiology. These include healthcare delivery, patient outcomes, imaging access, and the workforce, as well as the potential effects of secondary buyouts and factors making certain geographic regions attractive to private equity.
“Private equity acquisitions often shift physician ownership to external investors, transforming radiologists from owner-stakeholders to employees,” the study authors wrote. “This shift can result in cultural changes, leadership challenges, and increased productivity demands, potentially exacerbating clinician burnout, and turnover.”
The full analysis can be accessed here.
