How Two Radiology Groups Survived a Merger

Pressure from the government to comply is fueling mergers and acquisitions in radiology, Rick Padelford, executive vice president, San Diego Imaging Medical Group, said at RBMA 2016.

PQRS, MIPS, MACRA, and interoperability are just a few of the mandates that have radiology practices feeling the pressure to grow or combine in order to keep up, he said.

Padelford leads a group that merged with a neighboring group in San Diego county.

“Many of us had been friends with each other for quite a while and we got together and said we think we can do something good here,” Padelford said. “We think we can do something that would help improve our service to our hospitals that would improve the coordination of care to our community and do it on a larger geographic scale.”

The groups weren’t natural competitors with one another, which helped drive a friendly merge.

“We looked at the world of radiology the same way, so it was a natural marriage to come together,” he said.

There were still challenges, though. Discrepancies in income level and work schedules were an initial concern. The groups approached this by creating a divisional structure in which each group could operate independently internally, but still promote as one brand and one group when it came to negotiating hospital contracts and external relationships.

Originally, separate internal divisions was considered a temporary structure but after three years, most of the group seems to like this type of governance, Padelford said.

Ultimately, being part of a larger group gives them resources to invest capital in IT and interoperability in response to increasing external pressure. What’s mitigated is the pressure to compete with each other, Padelford said.