Radiology practices and their contracts with hospitals, 1989-1990: a representative sample survey

Because of concern about pressures from hospitals for changes in their contracts with radiology practices, the American College of Radiology undertook a stratified sample survey of radiology practices and their contracts with hospitals in late 1989 and early 1990. After three remailings, the survey obtained 904 valid responses for a 64% response rate. It found (weighting data to represent all radiology practices in the nation) that 91% of radiology practices provide services in hospitals. There are contracts at 57% of these hospital sites, and hospitals use tax-exempt bond financing in 54% of the sites with contracts. One year is the most common duration of contracts, and 90 days is the most common cancellation period (89% of contracts can be canceled during the contract's term). Eighty-six percent of contracts are exclusive; 73% are automatically renewable ("evergreen"). Separate billing exists in well over 90% of hospitals with contracts. Two percent of contracts require radiologists to provide equipment; 4% require them to provide support staff. There are fixed-fee arrangements in 9% of contracts and percent compensation arrangements in 3%. Hospitals share in radiologists' fees as a charge for contractual privileges in 5% of contracts. Twenty-seven percent of contracts require hospital approval for radiologists' fee increases; 19% require radiologists to participate with Blue Shield or Medicare. If a contract characteristic is predominant nationally, it is predominant in every region, for solo, small, medium, and large practices, and whether or not hospitals use tax-exempt bond financing. There is, however, some modest variation in frequency of contract provisions. Multivariate analysis shows that most such variation reflects true effects of region and other variables, not statistical artifacts. Region was a statistically significant determinant of 11 of 17 contract characteristics studied. Practice size was a statistically significant determinant of only about half as many characteristics. The survey found some interference in the independence of radiology practices (e.g., required hospital approval of fee increases), questionable clauses (e.g., mandated provision of equipment), and even illegal ones (hospitals charging a fee for contract privileges). Knowledge of the survey findings can make individual radiology practices more effective in negotiations with hospitals and assist the profession in forming a strategy to oppose disadvantageous and illegal provisions.