MEDNAX’s (parent company of VRAD) Recent Acquisition of Radiology Alliance Indicates the Medical Group is Doing More than Teleradiology and Neonatal Care

MEDNAX, Inc, the nation-wide mega conglomerate of mainly neonatal services, has recently acquired Radiology Alliance, PC, the largest private radiology group in Tennessee. This is an unsuspected purchase for MEDNAX, Inc., as the medical group with headquarters in Florida mainly specializes in teleradiology through VRAD, neonatal, maternal-fetal, pediatrics, and anesthesia. Yet, the acquisition is apart of the group’s initiative to expand and streamline their services. This is also a signal that they are moving into traditional “brick and mortar” radiology beyond teleradiology.  Is the threat of teleradiology firms to traditional private practices finally becoming realized?

Radiology Alliance PC is comprised of 64 physicians, and serves communities in both Central Tennessee and Southern Kentucky. MEDNAX operates in over 2,100 hospitals in both the U.S. and Puerto Rico with 2,900 contracted physicians. This is MEDNAX’s second radiology group acquisition, and first hospital-based radiology practice purchase. In 2015, they acquired vRad, or Virtual Radiologic Corp, a diagnostic teleradiology practice, for $500 million. The terms of the Radiology Alliance PC acquisition were not publically released.

Although MEDNAX has historically focused on neonatal, pediatrics, and maternal health services, they experienced an unusually bad fall quarter — with a net income of only $78.1 million, in comparison with $92.7 million in revenue the year before. They attribute the financial dip to the fall’s low birth rate. According to Modern Healthcare, the U.S. birthrate has dropped substantially over the last 10 years, from 4.4 million to four million annually. The acquisition of MEDNAX could have been provoked by the reduced number of neonatal admissions and the need to diversify their services.

“Our partnership with MEDNAX will allow Radiology Alliance to maintain and enhance our strong on site physician footprint with our hospital partners, and also will provide the IT platform and remote technology to expand our coverage in an efficient and highly specialized manner,” said Jason Shipman, M.D., President of Radiology Alliance PC in a press release. “In addition, we look forward to having the size and scale of a national network to grow our presence as a radiology leader in a changing health care environment, and to having access to a robust data analytics platform to ensure success as new payment models are developed.”