The Four Routes to Profitability in IR: The Plight of the IR Opportunist

I apologize to readers of this blog for the delay since the last post. I’ve been working on this one for a bit and have admittedly been stuck in some “analysis paralysis.” The post is rather long, so for those of you with short attention spans, I advise digesting this in two separate parts. I hope the content will get you talking and allow us to have deeper conversations on the state of healthcare and what it means for us as passionate and caring physicians.

Part 1: The Truth Hurts

While I have referred to medicine in America in less than flattering terms on various occasions, I’ve never taken the time to explain why I am so pessimistic.

As unpopular or taboo as it may be for academic thought leaders to admit, medicine in this country is structured as a business, and to argue otherwise would make one a flat earther. At the heart of our interactions with patients and their families is a profit motive. No margin, no mission. And while each individual physician may not necessarily harbor such thoughts, the sad truth is we as physicians have merely become a means by which others profit. Those “others” include large healthcare systems and their non-physician management, insurance companies, medical device and pharmaceutical companies, private equity firms, managerial services organizations, and physician practice owners typically of an older generation.

There are several very alarming trends in the workplace of healthcare, none of which are new but are interconnected and seem to be coming to a head:

1. Decreasing Reimbursement

2. Healthcare Consolidation

3. Physician Burnout

Once upon a time, but not so long ago, physicians held a lot of power. This was reflected in favorable reimbursement for the work we do and the ability to determine how care is delivered in our local communities. Many describe this as the “Golden Age” of  medicine. Over time, physician autonomy and financial security have been eroded, largely related to decreased reimbursement, commoditization of our services by under qualified providers, and our collective inability to politically advocate for ourselves. For those of us early in our careers, we may have noticed these trends in older family members or friends who are physicians.

In the face of both decreasing reimbursement and increasing administrative demands to meet various bureaucratic reporting standards, there has been a trend towards healthcare consolidation. 2021 marked the first time in our nation’s history where independent physicians became the  minority. Many longtime independent physicians have sold their practices to healthcare systems or private equity firms. Consolidation has been increasing at an unrelenting pace, irrespective of the overall market and antitrust/anticompetitive legal regulations.

Concurrently, there has been a substantial increase in physician burnout and decrease in career longevity. You know something is both real and hot when academic physicians can publish papers on this topic and make a career out of it. Burnout was further accelerated by the COVID-19 pandemic and the ensuing “Great Resignation.” Yours truly was certainly a living example of this phenomenon, having left  my first job in a rather unceremonious fashion and subsequently leaving a tumultuous partnership with a cardiologist and documenting everything right here for your edutainment.

For those of you who may feel like a cog-in-the-healthcare-wheel, you may have noticed some interesting patterns emerging among physicians over the last two years. There have been more looking to reach financial independence in an effort to escape their unsatisfying professional existence. This may or may not coincide with the development of the increasingly popular concept of the physician “side-gig.” These ideas are certainly nothing new to me, as I am very much part of this movement to establish expertise outside of medicine. Popular ventures for physicians include real estate, coaching, venture investing, podcasting, and even blogging.

What’s really sad, though, is thinking about what this all means for healthcare in this country. We have allowed the creation of a system where physician longevity is decreasing each and every year. According to the Association of American Medical Colleges, the US will experience a physician shortage of between 37,800 and 124,000 doctors by 2034. Will there be any doctors left to take care of us in 20-30 years?

Honestly, I’m not sure, but one thing I’ve learned to do which has helped me figure things out is learning to follow the money in order to gain some understanding. Our hyper-regulated, bloated healthcare system riddled with carveouts for special interests suggests that costs will continue to increase with consolidation, physicians will largely be replaced by lower cost “providers,”, and technology will likely play some role in an effort to take care of an aging and relatively unhealthy population when compared to other developed nations.

I’ve come to terms with this reality and I think every young or aspiring physician should, too. The only way to maintain your autonomy and some sense of purpose in this bleak environment is to practice medicine for the love of the game by establishing a wide moat of expertise and not having any financial expectations. Medicine must become a passion.

What does all of this have to do with IR? Well, a lot.

First, I think our ability to make a living in medicine is too concentrated in a specific trade, which in IR’s case is a commoditized skill set of trash collecting and reading diagnostic imaging. In many ways, I’m glad I’ve had the experiences I’ve had or I never would have put in the requisite work to develop niche clinical expertise in addition to alternate streams of income outside of medicine to financially protect myself given the alarming healthcare trends I’ve described. I think every IR has to do this going forward. You cannot rely on some radiology department chairman, OBL owner, or even worse a non-physician with a fraction of your education to ensure your livelihood. After all, you are merely an expense to any organization which acts at the whims of a government which is  beholden to insurance companies and their lobbies.

Second, we need to have a keen understanding of the macro-level healthcare landscape to better understand how we will structure our careers in IR. Whether or not we like it, or want to think about it, we need to understand how to make money in IR to remain viable as a business. The moment we stop thinking about healthcare as a business in this country is the moment we lose autonomy because we are allowing someone else to control and profit from us. Anyone who focuses on “just the medicine” or blindly trusts their boss to make all business decisions for them, is a tool due for a rude awakening. Physicians have rightfully earned the reputation of being unsophisticated if not incompetent in business, and it is particularly embarrassing to discuss these topics with physicians of my own vintage. Trainees are products of their academic mentors or division chiefs, who themselves are either clueless about the harsh realities of medicine outside the warm and safe cocoon of academia, or who may be  keenly aware but dishonest with trainees for fear of going off script and not promoting universally positive messaging.

Enter the concept of the IR Opportunist. The IR Opportunist understands that the financial future of medicine is bleak. They realize that in order to secure the proverbial “bag” they must act quickly. See, the opportunist is no idiot. They understand that their ability to generate income is limited by their specific skillset which they have sacrificed their prime earning years to learn. The IR Opportunist is not necessarily interested in organic practice growth and love of the game. No, they want to do what is necessary to make as much money as fast as possible using the skills and reputation they have worked so hard to obtain, negative externalities be damned. In order to navigate the future of IR, one must understand this two-faced creature and what motivates their behavior.

Ultimately, the IR Opportunist understands that there are four ways to make money as an interventional radiologist:

1. Diagnostic Radiology Subsidization

2. Healthcare System Subsidization

3. Medical Device Manufacturers

4. Outpatient IR Practice

Diagnostic Radiology Subsidization

You ever hear of the Nordic concept of “hygge?” Think comfortable loungewear and hot chocolate. That’s like diagnostic radiology subsidization for the interventional radiologist. Most of us practice within radiology contexts, whether in private practice or at academic centers. You’ve heard the argument many times in my prior posts, but for those first being introduced to the now household term “trash collection,” the general premise is IR procedures are woefully undervalued relative to diagnostic radiology interpretations. As such, diagnostic radiology production will to some degree subsidize interventional radiology within most hospital settings. This dynamic tends to be the primary driver of most career unhappiness within this setting as the economics of the situation more or less drive the common practice pattern of doing low RVU cases and reading diagnostic studies between those cases in order to keep pace with diagnostic radiologists. Relatively low immediate value endeavors requiring significant sweat equity such as practice building and outpatient clinic are discouraged as a business decision, which is further rooted in an “order-based” radiology ethos.

The beauty of this environment is it’s a relatively predictable way to make money and often time results in compensation out of proportion to what we would generate based on faulty wRVU metrics. The drawback, however, is being at the mercy of one’s diagnostic colleagues and being very limited with resources to grow your IR clinical practice. Nevertheless, most of us work in this context and the majority of interventional radiologists are content doing so, as they acknowledge the rules and accept the constraints in this setting. Ultimately when it comes to profitability, how much money you’ll make is purely dependent on your payer mix, RVU productivity, and whether or not you have private equity investors, or senior physician partners, skimming off the top.

Healthcare System Subsidization

Private Equity investment has largely destroyed the traditional private practice infrastructure in some settings. This has led to a growing trend of split IR and DR service contracts with hospitals, including the increasingly popular arrangement of direct IR employment. In this model, one’s financial compensation does not necessarily have to be driven by professional fees as it is for independently contracted radiology groups. Hospitals full-well know that they need you, but seeing as most hospitals are run by non-physicians, there will be an army of middle manager MBAs who will somehow tie your compensation to national benchmarks in IR which are still largely driven by radiology department finances. One’s ability to remain profitable in this setting is entirely dependent on being able to convince someone without any clinical training that you are worth it.

Medical Device Manufacturers

At the end of the day, our ability to make money in medicine is largely influenced by the government. We are either directly or indirectly subject to the whims of CMS which sets the benchmark for compensation in our current fee-for-service model, with commercial payers pegged to Medicare reimbursement. As we transition to a future of value-based care, it will likely be more of the same, with this model creating more inter-professional in-fighting for their slice of a shrinking pie. Any astute physician with an ounce of business sense understands that the profits of yesteryear will not be so in the future. With all the headwinds I have discussed, what is one to do if they want to capitalize on their subject matter expertise?

They often turn to the medical device industry. You ever see a big-name speaker at the SIR Annual Meeting or any other conference take to the podium and give any meaningful commentary about potential conflicts of interest? Often the second slide they show is a disclosure slide which they conveniently zip through in about a second or less, making no mention of their potential financial biases. When I give a talk, my disclosure slide humbly reads “none.” I usually make some joke to the effect of me not being important enough to have any disclosures which usually elicits a giggle or two.

Without a doubt, many interventional radiologists are deeply connected with industry. Some of it is related to the history of our field which is intrinsically technical and co-dependent on device manufacturers to build innovative devices for our interventions. That legacy remains strong today, as we have all sorts of novel technologies and techniques in the R&D pipeline.

What isn’t often discussed in the history of IR are the financial incentives which drive physicians to link up with industry. Oftentimes, the ones most intimately involved with medical device manufacturers are academic physicians, who, for ethical reasons, arguably should be the least. Many are often paid handsome sums of money to serve as “key opinion leaders,” irrespective of their ability to actually perform cases in their claimed area of expertise before sunset. The prestige tied with a name brand academic affiliation are a huge selling point for medical device manufacturers, who at the end of the day will do whatever it takes to sell a product and generate profits for their investors. The KOL IR Opportunist will not blink an eye when it comes to endorsing a questionable device or training competing endovascular specialists such as vascular surgeons or cardiologists to perform procedures for which they were never formally trained, all under the friendly guise of promoting multi-disciplinary collaboration.

I encourage every reader to pick an area of interest: venous thromboembolism, embolization, critical limb ischemia and interventional oncology among others. Visit the CMS Open Payments website, and enter the name of a prominent academic physician in this space. The data will be quite revealing. We have physicians making healthy five-figure if not multiple six-figure consulting fees each year from medical device companies who have a clear motive to sell their product. In fact, some make more from their affiliations with medical device companies than they do from their day jobs as academic faculty. These are often the same physicians we are relying on to educate our future trainees and promote a future of clinically and ethically driven practice.

If I were a faculty member on staff in some academic division playing a silly political game of promotion with tons of extracurricular responsibilities for a wage which is far less than that of my private practice counterparts, I would likely be looking for a way to get ahead, too. Why not leverage the prestige associated with your position to help make ends meet?   

Well this all sounds justifiable until one realizes that playing this game comes at the cost of literally weakening our field and selling out our junior colleagues and trainees for immediate financial gains. Classic examples of this includes the development of endovascular strategies for the treatment of peripheral arterial disease and DVT/PE, the subsequent training of non-IR colleagues for political maneuvering, and then gaslighting younger IRs such as myself into believing that loss of vascular market share is merely a myth, and through aggressive practice building efforts in settings which most likely do not allow for such, a healthy IR clinical practice can be organically grown. For more on my treatise regarding PAD and the academic fallacy, please refer to this post which I remain incredibly proud of despite what “they” think. 

As much as the unfolding of the vascular saga upsets me and speaks volumes about our inadequate IR training paradigm, I just can’t help but wonder if many of these faculty are indeed IR Opportunists who know the truth about our financial future and see industry relationships as a way to diversify their income or expedite their exit from medicine despite the negative long-term consequences on the field. It sure would be refreshing if they’d just be open and honest about their intentions.

Outpatient IR Practice

When I learned the cold truth about the economic reality of hospital-based IR practice, I went all-in on the OBL concept. I have discussed this model in significant detail in other posts, but the quick version here is that outpatient sites of service, particularly site of service 11 (OBL) provides distinct advantages to the physician owner when it comes to financial remuneration for certain IR procedures when compared to the hospital. These environments make it feasible to practice a model of interventional radiology that is more in line with the practice patterns of other endovascular or surgical subspecialists.

Having been involved in the development of an OBL and now having worked in several others, both physician and corporate owned, I have an above-average understanding of this model and remain bullish on the future despite what will undoubtedly be a climate of decreasing reimbursement, especially after certain corporate-backed OBL entities attract the attention and wrath of the Department of Justice upon the field.

The simple fact of the matter is that some of the most impactful things we can do in IR, can safely be done on an outpatient basis. Furthermore, patients demand minimally invasive/non-surgical alternatives for the treatment of common ailments. Finally, it is simply cheaper for society to provide interventional care on an outpatient basis. There is clear evidence to suggest that healthcare overall will transition from hospitals to outpatient sites of service in an effort to decrease costs.

The problem with IR in the outpatient space is not the theory behind it rooted in third grade arithmetic; it’s our intimate relationship with diagnostic radiology which disproportionately benefits from large healthcare system contracts resulting in predominantly hospital-based practice patterns and structural inequities such as pseudoexclusive contracts. Furthermore, until recently with the integrated residency, our culture of poor clinical training which is a consequence of our radiology upbringing, has resulted in an IR workforce that is frankly incapable of successfully competing as clinical specialists which is a necessity in the outpatient space. Do you really want to give up that nice warm blanket and hot chocolate of diagnostic radiology subsidized hospital-based practice for an uncertain future competing in the outpatient arena?

The IR Opportunist understands this cold truth and finds creative ways to aid in patient acquisition strategies, understanding that referrals are the life-blood of any medical practice. In this country what tends to be valued more than one’s clinical expertise is money. It’s not surprising that creative creatures come up with interesting schemes to obtain referrals, many of which are barely legal or frankly illegal. A notable example which has come to light recently is an organization which promotes “active investments” by podiatry colleagues. Many IRs, including a few recognizable former academic faculty, have been lured to work for this organization with promises of very high salaries and no call or weekend duties. Word on the street is they are supposedly pressured to perform unnecessary procedures. And you know the kicker? The people running this organization are not even physicians. How surprising.

This is one of many examples in the outpatient space. Whenever referring physicians are also investors in an outpatient IR practice, there is a propensity for overutilization in the pursuit of profit motives. Furthermore, there is a propensity for the interventional radiologist to not act as a true clinical specialist, but as a glorified technician performing whatever it is they do which is unique in that setting (often atherectomy, embolization, or dialysis maintenance). OBL work does not equate to clinically meaningful practices in many settings. Monkeyhood is alive and well, even in the OBL. There are notable exceptions, many of which have or will be headed for consolidation via PE buyouts. New equity partners may then corrupt established practice patterns to maximize returns. Time will tell. 

Some IR Opportunists are even more creative and form multidisciplinary group practices in an effort to circumvent federal Stark Laws. In-office ancillary exemption rules make it legal for “in-house” referrals of radiology services including angiographic procedures. I’ve contemplated going down this path in my own life when a urology group wanted me to work for them. All of a sudden, urologists I’ve been trying to pitch PAE to for over a year were suddenly interested in sending tons of patients for prostate artery embolization. I had this sick feeling in my core and I did not go through with it.  It’s amazing how attitudes can quickly change when financial incentives change.

Part 2: Finding Solutions

Control The Asset

You know what kills me? Patients have problems that we can solve, yet we align ourselves with partners who don’t share our same interests because it is apparently more convenient, less-risky, or just considered the conventional path. The story of interventional radiology is a microcosm of the greater healthcare landscape where physicians have given up control of their primary asset which is their ability to work directly with patients through primary practice ownership and governance. I think my generation is particularly weak when it comes to making excuses for their decision to be employed by entities that are frankly harmful to the future of medicine. Whether it’s a shady OBL owner, private equity firm pretending to transform radiology (presumably for the better), or some hospital where daily decisions are driven by nameless MBA suits working remotely while you have the honor and privilege of being used and abused because “that’s what you signed up for.”

Ultimately whoever controls the flow of patients and the subsequent billing, controls the practice of medicine. As far as I’m concerned, we as a field have not tapped the single greatest potential for our future, which is our ability to go directly to the patient and circumvent all the noise associated with creative patient acquisition strategies. No, you do not need to read CTs to harvest cases from some depressing list; you only reap what you sow. No, you do not need to pay some podiatrist to illegally refer you patients for kickbacks. No, you do not need to form single tax ID group practices and become a slave for another surgical subspecialist to do a high volume of cases. All these creative strategies do is result in profitability much more rapidly than organic practice growth. And of course, these strategies exist to maximize profitability as soon as humanly possible because 10/10 times the goal of these practices is to sell to a private equity purchaser at a 10-15x multiple. You know the common theme in all of these practice patterns? You, the IR, are merely a replaceable cog in the proverbial wheel.

So how do we correct the ship? You need to find IR Jesus (Dotter). The IR Evangelist practices medicine the right way with a clinic first mentality and striving for organic practice growth. The Evangelist does not require dependence on other specialists for referrals. It is possible to collaborate with specialists in a way which does not require you to work for them particularly when one is not dependent on these individuals for referrals. You decide to refer patients to specialists, not the other way around.

An IR Evangelist can only be successful in independent practice if they understand the most important business tenant: Control the asset at all costs. In this case, the asset is your time, your skills and your ability to control the flow of patients.  Is it easy? Not at all. But it’s the only way to reclaim our once great field and at the same time push back against a rapidly consolidating medical industrial complex which does nothing but generate burnout and rapid disdain for the practice of a profession which at its core should be fun and stimulating for the vast majority of us who are in it for the right reasons.

Being successful in IR should not be about doing the biggest or coolest cases. It shouldn’t be about technical excellence alone. Success should be defined by striving for autonomy, purpose and mastery. This will come in the form of building a clinically meaningful practice where we get back to the basic tenants of the patient-physician relationship and we do so on our terms. Those interactions are why we are in medicine. It’s so easy to lose sight of that with all the noise in the world. But keeping this pure goal in mind, we have to be very mindful of the financial reality and what this will entail. Those sky-high income levels of the past will not exist. Medicine will likely become less lucrative over time. The writing is on the wall.  The physician of the future will need to wear multiple hats if they choose to be financially free in a fashion that does not require being someone’s busy bee for 30+ years. As the healthcare landscape changes, so must we.

Practical Strategies for Coming to Terms with The Truth

People often ask me, or are confused by what exactly it is that I’m doing with my professional existence. Some view me as the “OBL guy.” Others view me as the “locums guy.” Some just think I like writing and complaining about things.

What I’m really doing here is I’m creating a roadmap for a viable path forward for the next generation of independent image-guided surgeons. My strategy is not something that I planned from the beginning. 5 years ago, I would have told you that I’d be interested in doing “high-end IR” at a market wage. I think most IR trainees and new grads still think that.

My path from a traditional radiology group to OBL minority ownership to locums to my next step which is practice ownership as a majority owner reflects my evolution in thought with respect to the financial truth behind medicine in America and a discovery of my ultimate drive which is entrepreneurship. It just so happens that physician entrepreneurship is necessary to save whatever dignity remains in modern American healthcare.  

I am bearish about the financial health of medicine in America and the ability to find professional satisfaction in traditional employment opportunities. It just so happens that most leaders in such practice settings aren’t bullish either. This is why we are seeing rapid consolidation with a push for private equity buyouts, or significant alignment with industry in academics. Practice leaders are looking for an exit, but many are not willing to admit this cold truth. Shame on them. Blatant false advertising by leaders in both private practice and academia has done nothing but continue to mislead countless number of well-intentioned individuals down a path which requires excellence above and beyond that of times past just to survive, let alone thrive. The financial viability and associated lack of autonomy in medicine is eroding and that’s a cold hard fact that they don’t want you to know. Like pretty much anything that makes it to this blog (which is the cold hard truth) it’s guaranteed to engender angry feelings among the virtue signalers and game players with vested, undisclosed financial interests, like most articles in some form or fashion. At this point I don’t care what “they” say, but I do care about seeing my colleagues do great things. So how should the young physician proceed?

Independent practice is essential to re-establish meaning in our professional lives. Coming to terms with this means that we have to operate within the business of medicine which is very frustrating when one looks to this career in order to create generational wealth as it has been treated for many decades by physicians before us. I think the first thing for anyone entering this path to do is to just forget about medicine being the driver behind generational wealth. The moment when one realizes that medicine should not be used as a financial tool but should only be used as a means to practice a profession which you truly enjoy, then you can get to work carving out your existence. Otherwise you will forever end up frustrated or go down the road of the Opportunist which is not a great way to remain fulfilled over the long haul.

The framework I am prescribing is rather simple in theory, but difficult in execution because the opportunity cost in the short term can be significant. Here is your recipe:

1. Create financial bandwidth in your life.

You need to understand that you will have to live a very middle-class lifestyle for some time after training to eliminate/manage debt, and build up a strong financial foundation so you can practice on your terms. It doesn’t take a whole lot of money to be able to leave a traditional employment setting.

A couple huge mistakes most physicians make when entering the workforce. First, they buy the “doctor house.” Second, they buy the “doctor car.” What most young IRs don’t realize is when they enter the workforce they are really trash-collectors so their lifestyles should reflect that if they want to “break the mold” at some point. I know no one likes delayed gratification, but unless you want to work for someone for 30 years, you need to make some sacrifices to get to a point where you can call your own shots.

2. Just “eat it” as an employee or independent contractor for 3-5 years.

It takes time to establish procedural and clinical excellence. It also takes time to create a little financial leverage. Acknowledge that the march towards independence, both financially and professionally, is a marathon. The first several years of your career will likely include trash-collecting in some form or fashion. Just know that we all do it, but that is not where your story ends. It’s just the start.

3. Develop true expertise in medicine.

Don’t be that IR that just shows up to work and does whatever cases pop up on the list. Again, that is a trash collector. You are a physician. Pick a couple things you are interested in and strive to become the world’s expert at those things in-between taking trash out to the curb. Honestly, you should aim to be better than the physicians who taught you. This will undoubtedly involve learning things about the clinical management and pathophysiology of disease that you were never exposed to in your radiology-based training. This will be your ticket to practicing what you love on your terms.  

4. Build streams of income outside of medicine.

One of the biggest hindrances to career growth in IR for the early career physician interested in an entrepreneurial path is not having any business knowledge. Medicine is a perpetual exchange of time for money. You can only work so hard and you can only make so much money. When you go down the path of independent practice, there can be a tendency to buy yourself another three full-time jobs. We see this in OBL owners all the time. They become victims of their own success and have one hell of a time planning an exit which does not require selling their practice to the devil. They expect a huge windfall for all the hard work they’ve put in. 

To avoid this trap, medicine has to be treated as a hobby. Which means you should not be dependent on medicine in order to meet your basic financial needs or create generational wealth through an advantageous exit. In order to do so, purchase income-producing assets to replace your living expenses as soon as humanly possible. I’ve replaced my living expenses through assets in less than 4 years since training. It’s not that hard to do. It just requires some discipline.

5. When the time is right, hang a shingle.

When you no longer need medicine to survive, but medicine needs you for the wonderful work you do, just hang a shingle and get to work. Don’t do it for the money because organic practice growth is slow, but do it for the love of the game. Get back to basics with good patient care. Make work fun again. Everyone will be better off for it. Opportunists will come and go, but this I’m convinced is the path forward. Change in healthcare is inevitable. The winners will adapt and the losers will whine about how things were better in the past. 

Conclusion

The current healthcare landscape seems bleak and the actions of many in our own field suggest that despite what they may be saying on the podium or social media. Despite that, understand the reality and know there are ways to carve out your existence and thrive. It requires reframing success and learning to be more than just a physician. It’s amazing what we are capable of when we put our minds to it. As I continue to experience more success and failure on this path, you will hear about it right here. Until next time.

I’d like to take a moment to thank a couple of my IR friends for helping me with this blog post. They know who they are and I’m grateful for their support.