Association of Private Equity and Hospital Consolidation and Negotiated Prices of Radiologic Services

The consolidation of radiology practices by hospitals and private equity (PE) firms has accelerated in recent years, reshaping the landscape of radiology practice ownership. There is limited systematic evidence on the growing prevalence of hospital and PE ownership in radiology and its association with negotiated prices for imaging services. The aim of this study was to examine how commercial insurance negotiated prices for radiologic services vary by practice ownership structure, including independent, hospital, and PE-affiliated radiology practices.

A cross-sectional analysis was conducted of radiologists in the United States, categorizing them by practice ownership type. Data from PitchBook were used to identify practices affiliated with PE. Using novel cross-sectional transparency-in-coverage data, negotiated professional fees for radiologic services were compared across hospital, PE-affiliated, and independent radiology practices. Linear regressions were used to examine the association between hospital-employed, PE-affiliated, and independent radiologists and cross-sectional prices paid for physician services, with fixed effects for service, state, and insurers.

Among 24,783 radiologists analyzed, 44% were affiliated with independent private practices, 41% were hospital employed, and 11% were PE employed as of 2022. Hospital-employed and PE-affiliated radiologists were concentrated in specific geographic markets. Negotiated professional fees for radiologic services were highest for hospital-employed radiologists, with fees $60.60 (95% confidence interval [CI], $59.53-$61.68) or 43.0% (95% CI, 42.2%-43.7%) higher for hospital-employed radiologists compared with independent radiologists (P < .001). Prices for PE-affiliated practices were $22.39 (95% CI, $20.77-$24.00) or 15.9% (95% CI, 14.7%-17.0%) higher than those for independent practices (P < .001).

Hospital and PE-affiliated radiology practices have significantly higher prices for radiologic services compared with independent practices, with hospital-employed radiologists commanding the largest price differentials. These findings highlight the financial implications of ongoing consolidation in radiology and underscore the need for continued research into how these trends affect radiologists, patients, and radiology practices.