Bought and Sold – Again

Word was out last week: MEDNAX is selling its radiology entity (including the teleradiology component vRad) to Radiology Partners. An awful lot of radiologists took to the virtual streets to share their thoughts on the matter – many founded more on feelings than facts.

I certainly have no juicy tidbits on the matter, having bailed out of vRad for a much better gig at the end of 2018. Heck, even if I were still reading cases for them, I’d surely have gotten the info just like any other member of the general public: The company can probably be forgiven for not sharing sensitive information on pending acquisitions with its literally hundreds of physicians.

Related Content:​ Radiology Partners Acquires MEDNAX Radiology Solutions

It’s nevertheless an interesting series of events—and reactions to them—for me to behold. My perspective harks back to 2011, when long-term readers might recall I took the teleradiology plunge and joined vRad. The job market was pretty grim at the time, partially because a lot of rad groups were folding. I saw vRad as the field’s juggernaut, having formed from the merger of the two biggest players in the preceding year. If anybody could weather the storm, they should have a good chance…and, it might just grow and thrive even better while competitors were going under.

Funny, then, that during my time with vRad there was a lather-rinse-repeat routine of them being bought and sold. Here I was, thinking of vRad as a big fish, and I had a front-row seat as they were swallowed and disgorged by a series of larger entities. MEDNAX was simply the last purchaser in the chain while I was there. The telerad entity progressively seemed less of a big fish and more like a hot potato.

Each time, the medical leadership would hype the change of ownership as a great thing, just what vRad needed. The new owners had strong faith in the telerad entity, wonderful visions and plans, and would be bringing it to new heights.

As years went by, I’m sure the leadership at vRad had notions as to whether these various owners delivered on such promises. They managed to keep contracts active, cases flowing, and direct deposits happening, so that’s something. But from the perspective of one of the rads doing the clinical work, I can’t say things felt substantially better in my seventh year there than they did during my first. Rather the contrary – my first few years had seen a series of pay cuts to the rads that never got restored while I was there.

One of the things that seemed to stand in the way of any real improvement was that most of the entities which owned vRad weren’t, well, doctorly. This venture-capital company, that private-equity firm…I’m sure they all had experts to advise them about the healthcare sphere, and/or were willing to pay consultants to do the job. Heck, they always kept a few docs in “Medical Director” and CMO positions at vRad to run the show. But, at the end of the day all those MDs could do was advise/plead/beg for what they felt vRad needed, and the owner-suits could summarily – and endlessly --- turn them down like a parent denying a kid a raise in allowance or change of bedtime.

So maybe the owners really didn’t give a darn about providing good diagnostic radiology service. Maybe they only wanted to fluff up the balance sheets in the name of turning a decent profit (or minimizing a loss) when they planned to sell the company in a quarter or three.

Or, let’s say they really did care about doing something good in healthcare. Let’s say the CEO considered it a holy personal mission. All of the good intentions in the world don’t make up for lacking a first-hand knowledge of the field you’re trying to navigate. Your advisors and experts are around to help, but they can’t be there 24/7/365. Sometimes you’re not going to be able—or willing—to ask them a bunch of questions whose answers would be second nature to a physician. Sometimes you might not even realize that there are certain questions you should be asking. Their information is only available to you at arm’s length – intellectual leverage is working against you.

I think a lot of the folks in our field instinctively know this, even if they wouldn’t consciously think it or put it into words. There was a general sense of greater hope and expectation when MEDNAX was revealed to be vRad’s new owner. Hey, this was an actual healthcare company…run by physicians, no less! They’d “get it.” And, from their track record, it was described as a known thing that they weren’t about buying and selling companies for a quick profit—if they bought something, they intended to keep and grow it.

Again, only someone with insider info would know, but one way or another it seems that they didn’t “get it,” at least not well enough. Maybe even physicians of other specialties are at too much of an intellectual arm’s length when trying to ride herd on a radiology group. Maybe you need actual rads at the helm—not serving as Medical Directors or even Chief Medical Officers. Maybe they should be positioned all the way to the top of the chain of command, complete with the master set of keys and control over the purse strings.

Will Radiology Partners bring to the table what these various other owners have lacked? Or, one day, will they, too, turn around and sell vRad to another big fish? Get swallowed by a kraken themselves? Or might it ultimately be the case that bigger is not always better in our biz, and even the most massive leviathan of them all goes belly up, its remains, ironically, to be picked over by a gazillion little baitfish-sized radiology groups?

It’ll be interesting to watch and find out.