Specialist
Former executive at Radiology Partners Inc
Agenda
- Recent trends and developments within the radiologist staffing industry
- Consolidation trends across the board and associated downward reimbursement pressures
- Competitive landscape analysis between Radiology Partners and other key players
- Ability to reduce variable costs to preserve margins
- H2 2022 strategic outlook, management commentary and business risks
Questions
1.
What major trend and developments have you been following in the US radiology market over the past 9-12 months or so that might better inform our Interview on Radiology Partners?
2.
How are you viewing the recovery of radiology centre patient volumes post-COVID-19? Where are radiotherapy visits at now vs pre-COVID-19, perhaps in terms of visits per day?
3.
How would you assess the importance of a doctor’s role in attracting patients in the US market vs other countries? How much pull does a radiologist or longstanding radiologist with patient relationships have?
4.
How has the implementation of the No Surprises Act, which was ratified 1 January 2022, impacted radiology groups such as Rad Partners? How reliant has the company been on out-of-network claims historically, and what is this regulation’s top-line impact?
5.
Could you break down the pricing transparency in this space, thinking about potential levers to offset the No Surprises Act or reimbursement headwinds? What is the ability of a name such as Rad Partners to pass on increased costs to health system customers and other entities?
6.
How would you assess the relative bargaining power of payers vs radiology centres more generally, and how do payers set rates for treatment post-No Surprises Act?
7.
How are you gauging the risk of further haircuts from CMS [Centers for Medicare and Medicaid Services] in 2023?
8.
How stable is the commercial reimbursement outlook for Rad Partners? Is there any credence to the notion that when CMS makes a reimbursement haircut, commercial payers will use it as justification to follow suit? What are negotiations like between Rad Partners and commercial partners?
9.
How much more favourable is Rad Partners’ position given its size and scale relative to smaller entities? Is this a major factor in conversations with payers?
10.
How productive are Rad Partners’ typical radiologists, perhaps in terms of RVUs [relative value units] per day, and how do they compare to smaller groups or competitors in this metric?
11.
Why is there such a range in productivity? Are there any pros and cons to higher RVUs per day in terms of potential patient outcomes?
12.
How much of a differentiator is Rad Partners’ strategic partnership with Aidoc? What productivity gains could be realised by implementing AI and other automated technologies into the process?
13.
Could you outline the referral process from patient diagnosis to radiology centres and what drives selection of a particular radiology centre?
14.
How important are radiologists’ relationships with oncologists in driving the referral process? When you say the relationship with the hospitals, is that synonymous with the providers or is that more about the network? Could you expand on the importance of those local relationships?
15.
How critical is the age of Linac [linear accelerator] machines or imaging equipment in outcome efficacy and driving referrals?
16.
How familiar are you with the oncology landscape? Have you seen an increase in the range of cancer treatments provided by radiology, such as skin and other cancers?
17.
How much overlap does Rad Partners’ have with more oncology-focused players such as a GenesisCare or Advocate Radiation Oncology?
18.
How do you assess Rad Partners’ competitive dynamics against physician staffing groups such as Envision Healthcare for new bids and contract business coming up in the marketplace?
19.
What are the major impacts of the radiologist labour shortage on Rad Partners’ business? What’s the company doing to maintain an adequate supply of radiologists, and how costly are these initiatives?
20.
Could you quantify the wage hikes we’re seeing to retain staff?
21.
We touched on Rad Partners’ robust size and scale. How can a business of such massive scale continue to fuel growth? How do you assess the difficulty in growing market share, and how should the company approach these challenges?
22.
How much unconsolidated opportunity remains for Rad Partners on the inorganic side?
23.
To what extent is there some friction between corporate radiologist groups such as Rad Partners and independent practices? Would you say there’s material apprehension among some smaller practices around joining Rad Partners, or even physician churn post-acquisition? How common is this?
24.
What cost synergies could be realised by eliminating duplicative back-end operations such as billing, credentialing and labour when consolidating new practices? How efficiently has Rad Partners integrated new practice groups historically?
25.
Could you quantify the missed collection revenue? How material could that be in aggregate, perhaps as
a monetary figure or percentage of practice claims revenues?
26.
What do you expect EBITDA margins for US radiology centres to be in 2022 and why?
27.
How aggressive do you think Rad Partners will be with inorganic growth in the next 1-2 years? What do you think will be the net-net impact of macro headwinds from reimbursement haircuts and friendlier clinic multiples on the company’s acquisitive appetite?
28.
What management style has Rad Partners adopted for the clinics it consolidates? Is the company more laissez-faire, or does it have more autonomy over practice operations? What are the pros and cons of the different strategies?
29.
In terms of continued runway, which geographic areas do you think have the greatest market opportunity for Rad Partners?
30.
How do names such as Akumin compare to Rad Partners and factor into the competitive landscape? How are mobile, free-standing and hospital-based operators changing strategies to adjust to an evolving competitive and reimbursement environment?
31.
Rad Partners recently introduced a new chief medical officer, Dr Krishna Nallamshetty. What’s your opinion on this hire at the top clinical position, and how might it affect the company’s strategic outlook?
32.
How do you assess Rad Partners’ strategy to expand its subspeciality footprint? What’s the company’s ability to increase exposure to some higher-margin subspecialities?
33.
What are more lucrative subspecialities in terms of profitability?
34.
We’ve noted the trend of the macro procedural flow from inpatient to outpatient settings. How do the revenue dynamics and volume trends differ for Rad Partners in inpatient vs outpatient settings, and how might the company seek to capitalise on the shift to outpatient?
35.
How much room does Rad Partners have to grow its hospital network? I understand Envision Healthcare has a strategic partnership with HCA. Would exploring a strategic partnership with a large operator such as Tenet – with a robust inpatient and ASC [ambulatory surgery centre] footprint – be prudent to secure higher reimbursement and referral volumes and capture a larger swathe of the outpatient procedural flow?
36.
We talked about cost synergies from consolidation, but could you discuss the integration costs associated with Rad Partners’ acquisitions? What are the big buckets and could you quantify the integration costs in each area for the company?
37.
What is Rad Partners looking for in terms of the technology and cultural fit of these roll-up practices?
38.
How has AI impacted radiology capacity more broadly? Are there any drawbacks to AI in radiology?
39.
What variable cost levers can Rad Partners pull to reduce its leverage profile amid reimbursement haircuts, rising labour costs and other headwinds?
40.
Can you quantify the gains Rad Partners could realise with commercial payers from its greater size and scale?
41.
What revenue synergies are there on managed care contracts in general?
42.
What do you see as the 2-3 biggest risks to Rad Partners’ business over the next couple years, putting reimbursement aside?
43.
We’ve noted Rad Partners enjoys higher managed care contracting rates than an independent practice that it’s acquiring. Assuming the independent practice has lower reimbursement, where does the newly negotiated rate fall post-integration with the company?
44.
How do you expect Rad Partners’ pricing power to be impacted by the No Surprises Act as it’s implemented across the US? The company has a high in network mix, but how much pricing power erosion might we see from this bill?
