The public trading of NightHawk Radiology Services in 2006 and Virtual Radiologic in 2007 put radiology in the limelight as the next big money spinner for venture capitalists. Industry observers predicted the future of teleradiology would lie in the hands of large corporations battling it out for national dominance and day-read contracts. However, in recent times the share prices of both Nighthawk and Virtual have taken a tumble, profits on night-reads are being continually squeezed and day-read contracts are not an easy acquisition. This has left venture capitalists wondering whether the radiology industry is as malleable as they first thought.
Healthy competition is responsible for obstructing the market dominance of large teleradiology providers. In order to meet the expansion expectations of investors, night-read companies have attempted to infiltrate the day-read market. This expansion has been met with resistance from local radiology companies who resent the idea of monopolisation in a highly skilled and traditionally localised industry.
One example of a local teleradiology group maintaining its market position is StadRat. Rather than pushing for fast paced national dominance, StadRat remains sturdy in California with cautious plans to expand into Oregon, Washington and Nevada.
StadRat CEO Joe Moock is adamant that the company will not follow in the footsteps of NightHawk and Virtual to public floatation. Moock admits that the larger companies are winning contracts with orthopedic centres and hospitals, but suggests that the contract terms are unsustainable in the long term. Moock’s future vision is one of teleradiology companies working regionally and providing an even higher quality of service to clients.
A key part of Moock’s vision is the sharing of imaging management systems. StadRat is one of many companies currently developing such software, which if synchronised, will empower regional groups to take back control of after hours imaging.
In a recent interview, Moock summarised his vision by stating, “Several radiology groups with our software could band together to provide night services or specialty reads. It is in the interest of hospitals to work with groups in their area rather than these large organisations”.
One thing is clear, money and technological advancements have made any-day any-time reads possible. However, it has been a rough ride for large teleradiology companies expanding from night-reads into the day-read business. Large teleradiology groups offering day-read services have a continuous uphill struggle trying to infiltrate the relationships of hospitals and their existing radiology services. Winning contracts is one thing, but doing so profitably is what ultimately makes or breaks an organisation.
Words by Peter Litchfield