Why Radiology Operations are Consolidating

Consolidation may be the name of the game in medical imaging today, but what’s really behind all the mergers and acquisitions? 

Brian Baker, president of Regents Health Resources, offered up a few explanations, including the price disparity between how much outpatient providers and hospital providers get paid for the same services.

“MedPAC has realized this, and so they’re recommending that those two rates be brought in line with each other,” Baker said, referring to the Medicare Payment Advisory Commission which advises Congress on Medicare issues. “And I would guess you can bank on the fact that they’re not going to raise outpatient medical imaging rates to match hospital rates. They’re going to bring hospital rates down.”

So now there’s this short window where hospitals can take advantage of this rate disparity by buying outpatient centers, he said, speaking in a video interview at the recent AHRA 2013 meeting.

What’s more, Baker said, it’s not just about the buyer making a profit – the businesses being sold can benefit from the acquisition as well. In this video, Baker explains why, and whether that’s always the way to go.