Beware predatory practices in teleradiology

With increased competition, the relationship between radiology groups and teleradiology providers is beginning to change. In the past, teleradiology companies offered a value-added service that allowed radiology groups to provide continuous coverage using a cost-effective business model. As the market matured, however, a handful of teleradiology providers sought new sources of funding and alternative modes of growth.

While these organizations were reaping the benefits from additional financing and new revenue streams, concerns over questionable business ethics began to emerge. Instead of forging deep partnerships with clients, certain providers were looking to supplant—instead of support—traditional radiology groups, thus creating an alarming trend of predatory competition in the industry.

Today, established teleradiology providers continue this trend by approaching radiology groups with the intention of seeking more profitable hospital contracts in the future. Initially, these providers seek partnerships with radiology groups to provide necessary services and generate immediate business. On the surface, it’s beneficial for everyone—until one looks a little deeper.

With a contract in place, these companies start looking to make contact with key decision makers at hospitals. Unfortunately, they’re looking to replace the radiology groups for whom they’re providing nighttime reads by offering full services directly to hospitals after enough time has passed. This predatory approach to generate business is reprehensible—and it does more than damage the relationship between radiology groups and teleradiology providers—it negatively affects patient care.

Understanding the trend toward predatory practices, however, starts with a look at the underlying circumstances that drive behavior in a particular direction. As a teleradiology company seeks funding from a venture capitalist, forms a merger that negatively affects service, or creates an offering that minimizes the role of a radiology group, there’s a concern that the organization is looking to shift the focus from client service and patient care towards maximizing shareholder wealth.

This is particularly problematic in the healthcare industry because all business decisions must be made with the patient in mind. In teleradiology, the deep relationships between radiology groups and providers impact the quality of care because there are interconnected dependencies that ultimately contribute to timely and successful care.

As large companies hit a competitive wall in the preliminary reads market, there’s a strong desire to seek new sources of revenue to satisfy shareholder interests—instead of looking for ways to improve services for radiology groups. Although most companies appear to compete ethically, organizations across multiple industries are driven to do whatever it takes to affect the bottom line to ensure favorable returns—and in teleradiology—this is particularly problematic because unethical business practices ultimately impacts patient care.

Today, teleradiology companies seek growth through (1) mergers and acquisitions, (2) extended service offerings, (3) niche-based offerings, and (4) predatory practices. It’s the trend toward predatory practices, however, that’s sending the largest shockwaves throughout the industry. As the threat of predatory practices becomes the topic of discussion at more and more forums, it’s essential for radiology groups to become aware of industry trends and make every effort to reject business models that damage relations between the provider and client.

By recognizing a teleradiology provider’s position in the marketplace along with its growth strategy and customer retention rate, radiology groups can recognize red flags that might signal problems down the road.

As supplemental service, the goal of the teleradiology company is to provide seamless coverage after-hours or on an as needed basis for subspecialty reads—not to supplant the radiology group entirely. As the marketplace continues to evolve, make sure to be on alert for providers looking to reduce the role of a radiology group by offering extended services or engaging in questionable practices.

While an organization maintains every right to operate profitably, teleradiology providers are specifically designed to support radiology groups and ensure the patient care is ultimately affected by a healthy and long-lasting relationship.

Joe Moock is a managing partner at StatRad, a San Diego-based provider of teleradiology solutions.