Trinity Health Mid-Atlantic has switched from PE-backed radiology practice to a new local group

Talks hit a wall during a contract negotiation last year between Trinity Health Mid-Atlantic and the private-equity-backed radiology group that served three of Trinity’s hospitals.

“They said, ‘We’re done. We’re going to give you 30 days’ notice unless you agree to our terms,’” Trinity CEO Jim Woodward recalled in an interview. “They had no care of what the impact would be on the communities we serve.”

That experience convinced Woodward that Trinity — a nonprofit owned by one of the nation’s largest Catholic health systems — should “move away from private-equity-backed companies that really had their shareholders’ interest in mind.”

In radiology, that happened last week. A new local practice called Mid Atlantic Radiology Consultants replaced the PE-backed practice at Nazareth Hospital in Northeast Philadelphia, St. Mary Medical Center in Langhorne, and St. Francis Hospital in Wilmington. The new practice grew out of a nine-member independent practice at Trinity’s Mercy Fitzgerald Hospital in Darby.

The founding of Mid Atlantic Radiology reflects more than shifting attitudes by some health systems from private-equity practices. It also shows the impact of hospital consolidation on the relatively few remaining independent physicians in the Philadelphia region. About half of Mid Atlantic’s 30 physicians came from the Radiology Group of Abington, which had been at Jefferson Abington Hospital.

Jefferson Health tends to employ its radiologists, said Oleg Teytelboym, a radiologist who is president of Mid Atlantic Radiology. “The Abington group was not able to sustain itself at Abington. Last year, they made the decision to close the group,” Teytelboym said.

Some started working for Jefferson. Others took jobs with other health systems. The remainder joined Mid Atlantic, he said.

Trinity’s path to Mid Atlantic started when its previous radiology provider was sold to a national, private-equity-backed practice. The relationship changed, Woodward said, declining to name the group. “There was less focus on strategic partnership, less focus on the quality of patient care,” he said.

There was also a substantial divide between that group and what Teytelboym’s practice was doing at Mercy Fitzgerald, Woodward said.

Trinity has invested in Mid Atlantic, and no outside investors were brought in. The relationship between Trinity and the radiology practice is exclusive for both sides. The partners will consider opportunities to jointly invest in freestanding imaging centers, Woodward said.

Teytelboym, who chairs Mercy Fitzgerald’s radiology department, emphasized that Mid Atlantic is an academically oriented private practice and will bring some of the most advanced imaging available in the region to Trinity’s hospitals.

“We are doing clinical research, publishing, presenting at the national and international conferences,” he said.

The entrance of Mid Atlantic into the market comes as another local radiology group has bowed out. Delaware County’s Southeast Radiology Ltd., which had provided radiology services to Crozer Health for more than 40 years, has disbanded effective June 30.

Crozer declined to say last week what group it is using to replace Southeast Radiology.