Facing radiology coverage challenges?
Discover how we helped a regional not-for-profit health system modernize and realign its relationship with an independent radiology group!
Radiology is at a pivotal moment as many organizations are grappling with a growing shortage of specialists. This challenge has been intensified by an aging workforce, rapid advancements in technology, and rising demand for patient care services. In response, health care systems are pursuing a range of approaches –one of which is restructuring relationships with independent radiology groups.
In this case study, explore how we partnered with a health system to renegotiate its Professional Services Agreement with an independent radiology group.
Through a data-driven, collaborative approach, the organization addressed longstanding operational and financial challenges—ultimately establishing a more stable foundation for growth, improving physician engagement, and enhancing access to radiology services across the communities it serves.
What were this system’s challenges, how did we approach them, and what were the outcomes?
CHALLENGES
- Independent radiology group (Group) found it difficult to recruit and retain physicians due to gap between professional collections, operating expenses, and the market rate for imaging services
- Complex existing structures involved a mix of service line agreements and a Joint Venture (JV) – making it difficult to structure future alignment
- System leadership lacked a clear understanding of current market standards in compensation, productivity, and operational overhead to ensure FMV
- Difficulty overcoming the hospital-group deadlock required external mediation to secure a mutually beneficial agreement
APPROACH
- Conducted in-depth interviews with stakeholders on both sides to understand goals and impediments
- Performed robust market benchmarking assessment of the Group’s compensation, productivity, operations, and financial terms
- Analyzed existing JV and service agreements to compare benefits, malpractice expenses, staffing and equipment costs
- Facilitated joint planning meetings to guide both parties through the development of a new PSA structure
- Developed a detailed term sheet to address funds flow, subsidy arrangements, and operational expectations to ensure all expenses were transparent
OUTCOMES
Our two-phased assessment and negotiation process focused on transparency, data-driven insights, and consensus-building.
This enabled the system to realign its partnership and stabilize the provision of radiology services for the communities in which it operates.
New Alignment Structure: Successfully implemented a modernized Professional Services Agreement aligned with current market realities by integrating at-risk compensation tied to objective performance metrics – ensuring a fair-market, sustainable model for long-term growth.
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Optimized Joint Venture Strategy: Assessment provided clarity on the JV – allowing both parties to foster a partnership focused on a mutually beneficial, long-term service expansion.
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Data-Driven Consensus: Utilized objective market data to move the negotiation process from subjective debate to fact-based agreement. This significantly improved trust and engagement between the health system and the Group.
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Long-Term Service Continuity: Ensured that clinical and operational performance metrics are aligned with the health system’s strategic objectives – strengthening access to high-quality radiology services for the region.
Is it time to renegotiate?
Professional services agreements are an integral part of a health system’s physician and service line strategy. Selecting the appropriate model, designing effective terms, and monitoring compliance and performance are critical to driving desired results.
As market dynamics, regulatory requirements, and organizational priorities evolve, agreements that once worked well can quickly become misaligned. Regular evaluation ensures your arrangements remain compliant, competitive, and strategically aligned.
