After several years defined by Covid-19, the imaging landscape has certainly changed. Lingering market forces continue to disrupt established referral patterns and traditional care pathways. Meanwhile, emerging challenges are causing leaders to adopt new strategies to succeed in a changing environment.
Below are the top three trends driving shifts in imaging care delivery that leaders should keep top-of-mind across the next few years.
1. Imaging services continue an uneven shift to freestanding sites of care.
We've predicted that imaging services would move away from hospitals for a while. After all, consumers are pushing for lower cost, more convenient care and payers are seeking ways to reduce members' health care spend. Plus, there are few clinical barriers to moving these services to off-campus sites. Imaging should be a poster child for site-of-care shifts, but to date, these shifts have been slower than expected.
This is because these shifts are occurring unevenly across the U.S. In some markets, hospitals are deeply entrenched as the primary location for imaging services, while in others, market forces have aligned to shift care towards ambulatory sites. For example, in Baltimore, MD or Corpus Christi, TX, more than 80% of MRI claims come from freestanding centers. By contrast, fewer than 10% come from that setting in Pittsburgh, PA and Reno, NV.
Strong market-level variables drive such regional differences. These include factors like state certificate-of-need laws, whether there's a strong payer in the market that dictates where care takes place, or if major employers take active roles in reducing employee health care costs.
Importantly, these factors are not static. Market dynamics can change quickly and cause hospitals to lose business to lower-cost, more convenient freestanding sites. And even if a hospital has steady imaging volumes, that doesn't mean market share isn't shifting.
We anticipate rising volumes across most modalities over the next 5 years, so if one organization isn't seeing growth, another in the market probably is. Therefore, imaging leaders should continuously examine markets to identify if a shift could occur.
2. Private equity (PE) investments are reshaping radiology practices.
Radiology practice consolidation is not a new trend. Between 2014 and 2018 the percent of radiologists in "large groups" of 100 radiologists or more increased from 38% to 50%.
But consolidation looks different today than it did five years ago. What's new now is that private equity firms are playing a bigger role in fueling this trend. When looking at the value of the 15 largest radiology practice consolidation deals since 2020, 65% of the investment comes from PE firms or PE-backed radiology groups. Even those that remain independent are aligning with other like-minded practices to compete with larger, PE-backed groups.
The full impact of this corporate presence in imaging is still taking shape. But by looking at how they've influenced the goals and operations of practices to date, we can identify three potential changes:
- Practices will leverage PE firms' scale to reduce back-office costs and strengthen negotiating power with suppliers and payers.
- PE leadership will incentivize radiologist efficiency to grow volumes. Throughput and productivity will therefore become top metrics of success.
- Practices will use PE funding to invest in technology. These investments will aim to improve practice efficiency, employee satisfaction, patient experience, and cybersecurity.
However, physician practices aren't the only imaging sector seeing PE interest. PE firms have also increased investment in imaging technology. For example, Thoma Bravo partnering with Circle CV or even Francisco Partners buying some of IBM's imaging assets. These technologies are attractive opportunities for PE because health tech has a track record of being more profitable than other health care sectors, and many of these technologies are just now mature enough to be viable PE investments.
3. Workforce shortages compel imaging leaders to update staff recruitment and retention strategies.
Coming out of the pandemic, staff shortages have been a top priority for leaders across health care. Imaging is no exception. Burnout among radiologists has been an issue for years and is now more widespread than ever.
But burnout in the non-MD workforce is an often overlooked, but equally pressing, challenge. 81% of health systems report rad-tech shortages. Many manufacturers struggle to staff enough field service engineers. Other front- and back-office roles like scheduling, revenue cycle, or clerical workers are in short supply as well.
Shortages of these individuals can limit organizations' abilities to achieve strategic aims—like realizing growth, reducing costs, or rolling out innovation. What's worse, is that there likely will never be a staffing "return to normal," forcing imaging leaders to reinvent their recruitment and retention strategies altogether.
To succeed in this challenging staffing environment, we've listed our top imaging retention and recruitment strategies for the short, medium, and long-term:
- In the short-term, leaders should appeal to new workforce preferences and become an employer of choice for millennial and gen-z staff. Read our report, Supporting Imaging Hiring and Retention, to learn how to do this by:
- Offering flexibility in scheduling, sites, hybrid remote/in-person work
- Supporting employees' holistic wellbeing
- Communicating career development opportunities
- In the medium-term, organizations should invest in automation that makes work more efficient and manageable for existing staff. Our report, Maximizing the Value of Investments in Automation can help leaders build a wholistic automation strategy and avoid investing in point-solutions without a strategic aim or complementary process improvements.
- In the long-term, organizations should take a proactive approach to recruiting their future pipeline of staff, like by engaging middle and high school students. Such initiatives can take years to pay off. But organizations that invest in community relationships can improve their future recruitment efforts, cultivate a workforce that matches the demographics of their community, and develop future staff competencies to meet emerging needs. To develop an effective staff pipeline, read how Family Care Specialists in Los Angeles achieved these outcomes in their program.
3 key questions to guide imaging strategic planning decisions
Imaging has been a profitable service for decades. But it's now facing trends on multiple fronts that threaten success. We suggest that imaging leaders across the entire industry consider the following questions as they decide how to remain competitive in a changing environment:
- What is the likelihood of an imaging site-of-care shift in this market today? What factors do we need to watch that could alter the current trajectory?
- How will an increasing private equity firm presence disrupt relationships between imaging centers and radiology groups in this market?
- What changes should we implement that will make us an employer of choice in our market?