[Unknown Member]

Quote from Intermittent Blasting

ADHD, what’s your prediction on how this shakes out over the next year?

 
So much depends on how radiologists behave it is hard for me to speculate. I would like to believe we as a profession would act in our long term best interests and not go to work for these guys or continue to sell our practices to them.
 
I was fairly confident the trend would end during the very recent job market. This current situation is a blessing and a curse for PE/VC. They will be able to hire radiologists on the cheap, however the revenue stream will not allow them to be profitable.
 
My gut tells me the trend will move back towards private groups controlling contracts. There will have to be group members that had previously sold out that know the lay of the land well enough to go to hospital admin and help them dig out from their past mistakes.

[afazio.uk_887]

^ Perhaps, but also these corps have iron-clad non-competes on the doctors which they signed.  Even in the setting of bankruptcy, I believe the non-competes remain in effect and are considered an asset that can be sold-off to whomever buys the left-over detritus.  I don’t think it is as easy as Rads sell to corp -> Corp goes bankrupt -> Rads free to take back group and contract with same hospital independently.  I am no expert on this nor am I an corp lawyer but that was my basic understanding. 
One possibility would be the corp selling the contacts back to groups at a discount relative to what they bought it for to get some money back for bond holders. 
Interesting times….

[Unknown Member]

Quote from Waduh Dong

One possibility would be the corp selling the contacts back to groups at a discount relative to what they bought it for to get some money back for bond holders. 
Interesting times….

 
That’s an interesting idea. It would be a lot easier to imagine independent radiologists recognizing the value of the contracts than a group that would need to skim money off the top of the worker to be profitable. If the partners that received the cash payouts in the first place still have cash on hand I could see how they might bite if the price was right.
 
 

[Unknown Member]

“I reported here a year or so ago that a friend who is in the venture debt business mentioned to me  that the pressure to put money to work in investment funds is so strong people make bad choices all of the time.”
 
I think this hits the nail on the head.
With less money available, there will be a reckoning. 

[debra.paulk_16]

Quote from boomer

“I reported here a year or so ago that a friend who is in the venture debt business mentioned to me  that the pressure to put money to work in investment funds is so strong people make bad choices all of the time.”

I think this hits the nail on the head.
With less money available, there will be a reckoning. 

 
Agreed with most of your recent posts Boomer. I’ll just add that I’ve always been the most creative/focused/opened to new ways when resources were most limited. Maybe a PE investors will allow one of the corps to strategically stop growth, hone internal efficiencies, and increase the morale of their workforce. Whichever company can do this the best might be able gain discounted assets from the other PE corps that think it’s time to double down on aggressive growth during this time and wear themselves too thin. The devil of this though is that most of the corps are going to be too tempted by lower acquisition cost during this time and forget that the things they buy might end up owning them. 

[afazio.uk_887]

To be fair – most radiologists in their 60s who have been in PP for 30+ years could afford a $4M home if they wanted one…..  The $20M plus mansion is ballerific, however, and really shows how finance careers are where the real money is in the modern economy…. medicine is basically upper middle class now.
 
 
 

[Robbro524_990]

The problem is that how do you blame PE when it was actually the radiologists who sold their own practices and, in many cases, also ‘sold out’ their junior colleagues too(and the field, in general) just to make a buck and/or for short term profit/gain.

[afazio.uk_887]

^^ I agree with you.  The rads are the one’s to “blame” for corporate intrusion into radiology.  PP rads has always been a cesspool full of greedy and unethical types, it is not a big shock really.  However, it also proves how dumb rads are compared to these high-end PE/VC types, as they are selling out their groups on the cheap.  Some of these large strong groups basically had local monopolies on rad professional services (ARA, Columbus rad come to mind).  Who sells out on the cheap when you basically have a monopoly?  
 
 
 
 

[Robbro524_990]

Very true, sadly

[Unknown Member]

Yes, when you lose principles and there is nothing that links anyone anymore, it becomes all about the cash — then a race to the bottom. The devil is truly in the details.

[debra.paulk_16]

Quote from NewEngRad

For what it’s worth, I laugh reading through this and wondering why the ARIS thing was taken down so rapidly while threads like this go on and on about other corporate rad groups which are similarly speculative about their business prospects, salary cuts and possible bankruptcy. Doesn’t matter to me either way, just an observation about the ARIS mystery versus why these posts are OK.

But my devil’s advocate side to much of this discussion is that US radiologists have generally benefited from the capitalist system, and continue to do so. We have always had by the far the highest average salaries and while they are coming down in many cases, they are still much higher than comparable countries. And the I think the salary complaining just smacks of wanting your cake and eating it too. We want to rake it in during the good times and have it protected in the bad times because we are special and did so much training (or could have gone into finance instead), etc. 

I’m not saying that PE is a good thing – they consistently come into industries and appear to totally demolish anything that might have been good in the name of profit. But as long as medicine is run as a business, we will endure the encroachment of corporate America and the ups and down of the business cycle.

 
I thought about that Aris thread before starting this one. Figured that Moody’s is fact based expert opinion so it’s not quite the same as the Aris thread that seemed to be purely rumor based initially (although turned out to be true).  
 
I also have tried not so single out a single company on this thread and also argued against the relevancy of people’s home prices. But threads always take weird tangents. 
 
The point I hoped to discuss on this thread was how patient care was going to be maintained if one of these companies fails. Could care be improved? Seems wild to me that healthcare organization which require “high reliability” have areas exposed to such crazy financial risk.

[Unknown Member]

Quote from jopo

Quote from NewEngRad

For what it’s worth, I laugh reading through this and wondering why the ARIS thing was taken down so rapidly while threads like this go on and on about other corporate rad groups which are similarly speculative about their business prospects, salary cuts and possible bankruptcy. Doesn’t matter to me either way, just an observation about the ARIS mystery versus why these posts are OK.

But my devil’s advocate side to much of this discussion is that US radiologists have generally benefited from the capitalist system, and continue to do so. We have always had by the far the highest average salaries and while they are coming down in many cases, they are still much higher than comparable countries. And the I think the salary complaining just smacks of wanting your cake and eating it too. We want to rake it in during the good times and have it protected in the bad times because we are special and did so much training (or could have gone into finance instead), etc. 

I’m not saying that PE is a good thing – they consistently come into industries and appear to totally demolish anything that might have been good in the name of profit. But as long as medicine is run as a business, we will endure the encroachment of corporate America and the ups and down of the business cycle.

I thought about that Aris thread before starting this one. Figured that Moody’s is fact based expert opinion so it’s not quite the same as the Aris thread that seemed to be purely rumor based initially (although turned out to be true).  

I also have tried not so single out a single company on this thread and also argued against the relevancy of people’s home prices. But threads always take weird tangents. 

The point I hoped to discuss on this thread was how patient care was going to be maintained if one of these companies fails. Could care be improved? Seems wild to me that healthcare organization which require “high reliability” have areas exposed to such crazy financial risk.

 
What happens if one of these companies fails- the rads don’t get paid. If the hospital doesn’t intervene they will have to acquire other locums rads at great cost.

[debra.paulk_16]

You’re probably right, how anti-climatic. 

[Unknown Member]

Quote from jopo

You’re probably right, how anti-climatic. 

Says the rad who will not miss out on a few months of pay as well as a quarter or two of bonuses and 100% loss on RP stock. May even have to cough up cash for tail insurance. May have to sell the house and move to another state. LOL

[debra.paulk_16]

Quote from drad123

Quote from jopo

You’re probably right, how anti-climatic. 

Says the rad who will not miss out on a few months of pay as well as a quarter or two of bonuses and 100% loss on RP stock. May even have to cough up cash for tail insurance. May have to sell the house and move to another state. LOL

 
That’s part of what I meant, greatly disappointing for those radiologists. The other part of my message, US healthcare / professional perspective, I think you got.  Maybe there will be a little more silver on the edges for effected radiologists though (get out of their non-compete, keep working with the referring providers they know, increased practice autonomy, maybe the new groups of admins don’t skim as hard, become easier to recruit). Also, maybe it would catalyze some positive changes to US healthcare or positive changes at the surviving PE groups. 
 
Not trying to be down on the PE groups and I definitely don’t want to cause peers trouble. Just trying to think of the possible outcome of the current precarious situation, particularly potential positive outcomes.

[Unknown Member]

Quote from jopo

Not trying to be down on the PE groups and I definitely don’t want to cause peers trouble. Just trying to think of the possible outcome of the current precarious situation, particularly potential positive outcomes.

 Go work for one. They have lots of openings. They would love to have you.

[afazio.uk_887]

My hospitals, which is currently in a non-hot spot area, is having meetings about starting up outpt and elective work again in a week or two.  This makes me think many others will follow suit and volumes will begin to rise again, although I am skeptical they will ever get as high as recent volumes were for quite a while. 

[satyanar]

Quote from Waduh Dong

My hospitals, which is currently in a non-hot spot area, is having meetings about starting up outpt and elective work again in a week or two.  This makes me think many others will follow suit and volumes will begin to rise again, although I am skeptical they will ever get as high as recent volumes were for quite a while. 

 
In this partial recovery scenario radiologist owned groups will be fine. Corporate groups will continue to lose money.

[debra.paulk_16]

Quote from Thread killer

In this partial recovery scenario radiologist owned groups will be fine. Corporate groups will continue to lose money.

 
With the Envision news it seems that PE back groups might not only continue to lose money, but investors are going to try to take back some of their money. Interesting times.
 
Quote from: [link=https://www.bloomberg.com/news/articles/2020-04-20/kkr-s-envision-healthcare-said-to-consider-bankruptcy-filing]https://www.bloomberg.com/news/articles/2020-04-20/kkr-s-envision-healthcare-said-to-consider-bankruptcy-filing[/link]
 
“‘Envision Healthcare’ sought to ease its debt load with a proposal for bondholders to swap $1.2 billion of unsecured notes at a discount for a new term loan with higher priority and an earlier due date. But just $198 million of those holders have [link=https://www.bloomberg.com/news/terminal/Q8XW1DDWRGGJ]agreed[/link] to the swap.”
 
My Interpretation:
Envision: We know our bonds are not worth anywhere close to what we said they would be, but we promise to pay you sooner and before all these other people if it comes to that.
 
Bondholders: No, we’re just going to bleed you dry real quick.
 

[gratianmiclaus_939]

<bump>
 
So where are things now?

[Unknown Member]

Quote from dmpk

<bump>

So where are things now?

All three are still in business. Probably will be for quite some time.

[Unknown Member]

I hear Envision is supposed to be reinstating full physician salaries next month, so I guess that means corporate radiology is alive and kicking.

Post covid, could they actually be a safer bet vs PP, like Amazon vs brick and mortar?

[satyanar]

Quote from irfellowship2020

I hear Envision is supposed to be reinstating full physician salaries next month, so I guess that means corporate radiology is alive and kicking.

Post covid, could they actually be a safer bet vs PP, like Amazon vs brick and mortar?

 
This is an easy question to answer. No.
 
Why? PP at least keeps the money it takes in for itself. PE takes a percentage to pay debt, pay suits, pay shareholders etc. Is there any way this could be better for a radiologist?
 
I guess if in PP you choose to spend every bit of the extra money you get so there is nothing left when you hit a rough patch it may seem better to not drop income as much on a percentage basis. This is a lot different than looking at cumulative earning over years.

[Robbro524_990]

With fancy accounting and some political clout (and especially leverage), you can fool a lot of people for a while…but…you can’t fool all the people, all the time.

Unless they make 130% of cash flow projections for the next 3 years, they are screwed, especially when their high yield bonds mature…just wait and see.

[satyanar]

Quote from DOCDAWG

With fancy accounting and some political clout (and especially leverage), you can fool a lot of people for a while…but…you can’t fool all the people, all the time.

Unless they make 130% of cash flow projections for the next 3 years, they are screwed, especially when their high yield bonds mature…just wait and see.

 
For sure I still thing PE is doomed long term. That’s a harder prediction though.
 
The last question answered was easy.

[debra.paulk_16]

Quote from DOCDAWG

With fancy accounting and some political clout (and especially leverage), you can fool a lot of people for a while…but…you can’t fool all the people, all the time.

Unless they make 130% of cash flow projections for the next 3 years, they are screwed, especially when their high yield bonds mature…just wait and see.

 
Agreed. 
 
Additionally:
1) the press about PE in healthcare is currently overwhelmingly negative, this might be harder to overcome than their debt.
2) they are squeezing current rads hard and not being honest with new hires, morale is going to pull down productivity. 
 
But, AI might save them. 

[kathleen.hibler]

PE is going nowhere. Is your group hiring next year? Theyll have their pick of the litter of desperate graduates Who will take any offer they can get

[aaishafatima999_432]

I heard Starboard private equity firm bought more Mednax shares, boosting their % up to about 9% of shares. 
Planning a move of some sort? not sure what this means. 

[debra.paulk_16]

Quote from Waduh Dong

My hospitals, which is currently in a non-hot spot area, is having meetings about starting up outpt and elective work again in a week or two.  This makes me think many others will follow suit and volumes will begin to rise again, although I am skeptical they will ever get as high as recent volumes were for quite a while. 

 
 
If your hospital is anything like mine… that’s code for 1-2 months if we can fit in all the meetings by then. Do not underestimate how risk adverse administrators can be.

[ranweiss]

Quote from jopo

Quote from Thread killer

In this partial recovery scenario radiologist owned groups will be fine. Corporate groups will continue to lose money.

With the Envision news it seems that PE back groups might not only continue to lose money, but investors are going to try to take back some of their money. Interesting times.

Quote from: [link=https://www.bloomberg.com/news/articles/2020-04-20/kkr-s-envision-healthcare-said-to-consider-bankruptcy-filing]https://www.bloomberg.com/news/articles/2020-04-20/kkr-s-envision-healthcare-said-to-consider-bankruptcy-filing[/link]

“‘Envision Healthcare’ sought to ease its debt load with a proposal for bondholders to swap $1.2 billion of unsecured notes at a discount for a new term loan with higher priority and an earlier due date. But just $198 million of those holders have [link=https://www.bloomberg.com/news/terminal/Q8XW1DDWRGGJ]agreed[/link] to the swap.”

My Interpretation:
Envision: We know our bonds are not worth anywhere close to what we said they would be, but we promise to pay you sooner and before all these other people if it comes to that.

Bondholders: No, we’re just going to bleed you dry real quick.

 
Time to pay the piper. RP , MEDNAX, where you at?
 
Hope this serves as a lesson to future rads.

[debra.paulk_16]

Quote from AngryBirds

PE is going nowhere. Is your group hiring next year? Theyll have their pick of the litter of desperate graduates Who will take any offer they can get

 
I agree that PE in radiology will persist but they likely will have to make some changes (probably more changes than most due to the items listed above).
 
This tread is to discuss what the future may look like for PE and their competitors (not just the probability of them going bankrupt, although that’s the preferred conversation for many). In many cases PE may be able to change quicker than larger systems, but it’ll be interesting to see if the companies can allow sustained decreased profits in the short term. 
 
My group is currently hiring. Sure, there are a lot of candidates, but it has not been easy to find the people we need. We’ve taken on a few new grads starting in July (hired before COVID), but it’d be a mistake to have too large of a percentage of new grads (IMHO).

[Unknown Member]

Quote from jopo

Quote from AngryBirds

PE is going nowhere. Is your group hiring next year? Theyll have their pick of the litter of desperate graduates Who will take any offer they can get

I agree that PE in radiology will persist but they likely will have to make some changes (probably more changes than most due to the items listed above).

This tread is to discuss what the future may look like for PE and their competitors (not just the probability of them going bankrupt, although that’s the preferred conversation for many). In many cases PE may be able to change quicker than larger systems, but it’ll be interesting to see if the companies can allow sustained decreased profits in the short term. 

My group is currently hiring. Sure, there are a lot of candidates, but it has not been easy to find the people we need. We’ve taken on a few new grads starting in July (hired before COVID), but it’d be a mistake to have too large of a percentage of new grads (IMHO).

 
The triumvirate will have every big city in America. Watch. 

[smfst7_929]

Quote from drad123

Quote from jopo

Quote from AngryBirds

PE is going nowhere. Is your group hiring next year? Theyll have their pick of the litter of desperate graduates Who will take any offer they can get

I agree that PE in radiology will persist but they likely will have to make some changes (probably more changes than most due to the items listed above).

This tread is to discuss what the future may look like for PE and their competitors (not just the probability of them going bankrupt, although that’s the preferred conversation for many). In many cases PE may be able to change quicker than larger systems, but it’ll be interesting to see if the companies can allow sustained decreased profits in the short term. 

My group is currently hiring. Sure, there are a lot of candidates, but it has not been easy to find the people we need. We’ve taken on a few new grads starting in July (hired before COVID), but it’d be a mistake to have too large of a percentage of new grads (IMHO).

The triumvirate will have every big city in America. Watch. 

Nice try Cassandra. I wouldnt trust drad to predict what he is having for lunch tomorrow. The triumvirate? Do you even know what ended up happening to the Roman triumvirate?

[Unknown Member]

It will be interesting to see what the fallout is with respect to rads

Affected rads really have the potential to have the upper hand in this situation but there are a lot of complicating factors

Might be a really good time for radiologists in the affected areas to start sticking together unfortunately that has never been one of our strong points

[Robbro524_990]

I hope all of these radiologists who sold out lose their jobs, these respective PE firms go bankrupt, and their ‘stock value’ goes negative. That would be appropriate karma, but that’s just me.

[Unknown Member]

Is Envision too big to fail in Florida? HCA bail out? 

[reuven]

Quote from jopo

Quote from AngryBirds

PE is going nowhere. Is your group hiring next year? Theyll have their pick of the litter of desperate graduates Who will take any offer they can get

I agree that PE in radiology will persist but they likely will have to make some changes (probably more changes than most due to the items listed above).

This tread is to discuss what the future may look like for PE and their competitors (not just the probability of them going bankrupt, although that’s the preferred conversation for many). In many cases PE may be able to change quicker than larger systems, but it’ll be interesting to see if the companies can allow sustained decreased profits in the short term. 

My group is currently hiring. Sure, there are a lot of candidates, but it has not been easy to find the people we need. We’ve taken on a few new grads starting in July (hired before COVID), but it’d be a mistake to have too large of a percentage of new grads (IMHO).

 
Part of the sales pitch of PE was that they gave income security to the radiologists for the length of time of their contract.  That clearly is not the case as they were the fastest to furlough radiologists.
 
Many people on these forums have focused on the demand for radiologists in that the currently decreased but rapidly improving volumes would negatively impact the job market in the short term and be favorable for PE.  However the supply of radiologists likely will also be affected as the radiology workforce is skewed older and many might just retire at this time.  This would be positive for the job market. Also the graduating fellows are having a 2/3 fellowship which will also have an impact. 
 
The factors above might make it harder for PE to acquire and retain radiologists.

[Robbro524_990]

I think the main reason PE will have a harder time hiring newly graduated radiologists is because what they offer is typically not as attractive as what traditional private practices offer; assuming these traditional practices are fair, democratic, and financially secure.

These graduates are not dumb (in general).

Most already know the game PE is playing. ‘Our PE practices are such great places to work and live. So, join us, work like a dog, and then we will just take all of the excess production/capital that you produce because we are just SO GOOD at management that we are due this $$$ for our C suite and shareholders.’

Oh and by the way, the reason we are taking this excess capital from you is because your older ‘partners’ decided that selling your (and their) excess future labor and productivity was a good deal for the $$$…at the time at least.

Too bad, no one ever asked these new graduates about the deal; nor did they send them a big, fat, check, either. 😉

Sounds like a great deal to me. Anyone else on here wanna sign up?

[ranweiss]

Quote from DOCDAWG

I think the main reason PE will have a harder time hiring newly graduated radiologists is because what they offer is typically not as attractive as what traditional private practices offer; assuming these traditional practices are fair, democratic, and financially secure.

These graduates are not dumb (in general).

Most already know the game PE is playing. ‘Our PE practices are such great places to work and live. So, join us, work like a dog, and then we will just take all of the excess production/capital that you produce because we are just SO GOOD at management that we are due this $$$ for our C suite and shareholders.’

Oh and by the way, the reason we are taking this excess capital from you is because your older ‘partners’ decided that selling your (and their) excess future labor and productivity was a good deal for the $$$…at the time at least.

Too bad, no one ever asked these new graduates about the deal; nor did they send them a big, fat, check, either. 😉

Sounds like a great deal to me. Anyone else on here wanna sign up?

 
Excellent summary, lol.

[heartmirror_672]

There is definitely a sea change in knowledge/awareness about PE firms.  When I was a 4th year resident (only 5 years ago), I didn’t hear much talk about the “evil PE firms” when looking for jobs.  Now that I am in PP, all the people we interview are most interested in whether or not there is any chance we are going to sell out to PE.  Millennial’s are stupid about a lot of things, but one thing we are very good at is using the internet…

[sherry.nance_958]

From what I have seen in the larger cities, the PE jobs offer every bit as good a salary and benefits package as many if not all of the private practice groups.

A lot of the private groups are every bit the pyramid scheme as the PE groups.

I interviewed with one in the last 6 months that was offering a job that amounted to about $25 per rvu (reverse engineered using expected salary and rvu minimum per day * stated work days).

No thanks, there are tele jobs that pay better than that and dont require leaving your home office.

Im not sure where these supposedly democratic private groups are, but in my geographic area they dont really exist.

[satyanar]

Good point BIMS. I thought about a qualifier for my last post. PP groups like you describe no better than PE. The traditional group that brings in a career partner are becoming more rare. Shame.

[Robbro524_990]

Then move…you’re not a tree, right?

[sherry.nance_958]

Saying to just move is not realistic for many people that have spouses with careers and extended family in a location.

Sure, we could move but at what lifestyle cost? Saying just move is easy. In reality there is much more to it. Sure, we could and would move if we had to, but its not worth it. Everyone has to make that calculus for their particular situation.

It still doesnt change the fact that many large city practices are largely dominated by PR groups, corporate style private practice groups, or academic shops. I hope I am wrong, but I havent seen it.

[satyanar]

Quote from DOCDAWG

Then move…you’re not a tree, right?

Why would I want to move? Been in this for about 25 years. Sharing well with partners and new hires.
 
I am lamenting the fewer opportunities for the recent trainees and describing how the best chance for everyone is in the private practice model if partners are out for each others best interests. PE owned groups and PP groups that make money off of employees are bad for radiology. 

[Robbro524_990]

Then don’t move. Just complain like a little girl, etc 😉

[satyanar]

Quote from DOCDAWG

Then don’t move. Just complain like a little girl, etc 😉

Haha. Not complaining. Just trying to show sympathy for others in a more difficult situation. What are you trying to do?

[satyanar]

Im actually confused DAWG. Just looked back at your posts on the subject. We seem pretty much on the same page. What triggered the last two comments?

[Robbro524_990]

I’m just poking at you a bit. You passed the test, etc.

We are on the same page, for sure. We both care about our profession and the new graduates/the future.

Now, how to go about ensuring the best for us all is certainly open for debate (and extremely difficult imho).

Plus, especially at this moment in time, I think we’d all do better (me especially) to maximize our agreements and minimize our difference, especially in radiology and medicine (not to even mention politics).

[satyanar]

Yep. On the same page. 

[asilva]

Nice to see some constructive/positive posts!

[ranweiss]

I think this is a great time for a group hug.
 
To BIMS01 – look harder man. There are better opportunities than corp jobs within a reasonable commute of nearly every city, even the ‘desirable’ ones. Sure,, may not be a short partnership track democratic PP you might find in the midwest…But if you do your homework, corporate / PE backed gig should literally be your last option, right next to tele (and probably worse than some PP tele gigs).
 
I’ve been looking and up until COVID hit, I was able to find really good PP gigs on east coast, west coast, south, and especially midwest..(even in socal/LA area).

[benoit.elens]

Professional fees are intended for the interpreting radiologists aka the professional who reads the exam.  Prices are set by the government (evil or God’s gift to humanity, or somewhere in between — your choice) and are not that bad.  They are not intended for MBAs, middle management, or to fund Ferraris for the CEO of your health system.  Make sure you and your partners alone get that money — it is what you are entitled to for services rendered.
 
Spread the word.

[Unknown Member]

I want to affirm the message of AR123 above, this is my assessment as well.

Those private practice groups in and around big cities may have higher expectations in terms of your CV and How highly you are recommended, so the truth is that these jobs may be hard to get for some applicants.

[Unknown Member]

Quote from ar123

I think this is a great time for a group hug.

To BIMS01 – look harder man. There are better opportunities than corp jobs within a reasonable commute of nearly every city, even the ‘desirable’ ones. Sure,, may not be a short partnership track democratic PP you might find in the midwest…But if you do your homework, corporate / PE backed gig should literally be your last option, right next to tele (and probably worse than some PP tele gigs).

I’ve been looking and up until COVID hit, I was able to find really good PP gigs on east coast, west coast, south, and especially midwest..(even in socal/LA area).

Really good PP gigs in socal LA area and east coast? Care to give any details? This doesn’t sound right.

[jmedina2]

Any updates on how these private equity backed groups are faring?

[kathleen.hibler]

RP slashed some groups salaries so substantially that the loss would undo most of the buyout amount.

Where are their employees gonna go in this market?

[kathleen.hibler]

RP slashed some groups salaries so substantially that the loss would undo most of the buyout amount if its sustained

Where are their employees gonna go in this market?

[jmedina2]

Thanks 

[clickpenguin_460]

When I was looking for a job, I asked the groups straight up about RP/being bought and two groups literally said something along the lines of “we have no plans but that’s confidential.”  Yeah, both groups were sold within 6 months.
 
The people who sold deserve what they get.  It’s just a shame that their hubris and greed has hurt those coming after them.

[debra.paulk_16]

Financially… slowly sinking, hoping for increased revenue/funding.
Relationship with the profession… seems a little worse every day.
Politically… the upcoming election appears to be bringing another headwind.
 
“How did you go bankrupt?” “Two ways. Gradually, then suddenly.” 
 
 
 
 
 
 
 

[satyanar]

“gradually, then suddenly” sounds about right.
 
It’s a shame that new graduates needing to earn something are keeping them around for longer than necessary.

[ranweiss]

I’ve interviewed for a few groups for partner track jobs. Things are still a bit touch and go in terms of what guaranteed partner income is etc with COVID. 
 
That being said, those that have no plans to actually sell to a corp group will be upfront and just say ‘not even a possibility’. Anyone that says ‘well we can’t predict’ etc etc, is looking into it likely. 

[mpezeshkirad_710]

Quote from ar123

I’ve interviewed for a few groups for partner track jobs. Things are still a bit touch and go in terms of what guaranteed partner income is etc with COVID. 

That being said, [b]those that have no plans to actually sell to a corp group will be upfront and just say ‘not even a possibility’. Anyone that says ‘well we can’t predict’ etc etc, is looking into it likely.[/b] 

Good posts in this thread.  I’m talking to some groups about jobs these days and these buzzwords or “tells” are helpful.

[jmedina2]

Thanks 

[btomba_77]

[link=https://www.wsj.com/articles/envision-bondholders-hire-lawyers-as-interest-payment-looms-e7e28f37]https://www.wsj.com/artic…payment-looms-e7e28f37[/link]
 
[b]Envision Healthcare Bondholders Hire Lawyers as Interest Payment Looms [/b]
 
[b] [/b]KKR-backed physician staffing company has been in talks with some lenders after a technical default  :
 
Bondholders of [link=https://www.wsj.com/market-data/quotes/KKR?mod=article_inline]KKR[/link] & Co.s Envision Healthcare Corp. have hired law firm White & Case LLP as the physician staffing company faces a looming payment deadline on its unsecured bonds, according to people familiar with the matter.
 
 
Envision has a bond interest payment coming due Saturday and investors are concerned about whether it will pay because it is in technical default, these people said. The bondholder group, which formed recently, has said it represents a majority of the companys outstanding bonds, according to these people.
 
 
 
[link=https://twitter.com/drmoneymatters/status/1646515952455143427]https://twitter.com/drmon…us/1646515952455143427[/link]
 
 

[satyanar]

Wow. 4 cents on the dollar. Makes sense. There is nothing of real value that can be protected even in bankruptcy. All of the revenue was based on taking from docs. All of those billions going to zero. Maybe they can claw back some of the cash that was supposed to be used to buy more groups?

[mwakamiya]

[size=”3″][b]”The chickens have come home to roost.”[/b][/size]
[size=”3″][b]’Nuff said…[/b][/size]

[mwakamiya]

I am surprised they are talking about 4 cents on the dollar. It should be zero cents on the dollar. 

[satyanar]

Theres always a greater fool

[satyanar]

Until there isnt. 

[Unknown Member]

Quote from sartoriusBIG

Quote from drad123

Quote from jopo

Quote from AngryBirds

PE is going nowhere. Is your group hiring next year? Theyll have their pick of the litter of desperate graduates Who will take any offer they can get

I agree that PE in radiology will persist but they likely will have to make some changes (probably more changes than most due to the items listed above).

This tread is to discuss what the future may look like for PE and their competitors (not just the probability of them going bankrupt, although that’s the preferred conversation for many). In many cases PE may be able to change quicker than larger systems, but it’ll be interesting to see if the companies can allow sustained decreased profits in the short term. 

My group is currently hiring. Sure, there are a lot of candidates, but it has not been easy to find the people we need. We’ve taken on a few new grads starting in July (hired before COVID), but it’d be a mistake to have too large of a percentage of new grads (IMHO).

The triumvirate will have every big city in America. Watch. 

Nice try Cassandra. I wouldnt trust drad to predict what he is having for lunch tomorrow. The triumvirate? Do you even know what ended up happening to the Roman triumvirate?

I don’t trust myself to predict the future. Thankfully my investments don’t depend on my predictive ability.
 
Now what I have for lunch on the other hand…. very predictable.

[Unknown Member]

How low can you go? If PE can displace rads ENTIRELY form the hospital they can still win and set the radiologist market price.

[satyanar]

Big if. So big it cant happen.

[smfst7_929]

Rads isnt like the ED. Cant just throw in a bunch of cut rate midlevels and hope for the best. Add to that the relatively dire shortage, and you end up in insurmountable debt as you try to lure rads to even keep the contracts.

[btomba_77]

[link=https://disclosure.spglobal.com/ratings/en/regulatory/article/-/view/type/HTML/id/2997104]https://disclosure.spglob…w/type/HTML/id/2997104[/link]

[b]Radiology Partners Holdings Downgraded To ‘CCC+’ On Tightening Liquidity And Cash Flow Shortfall, Outlook Negative[/b]

El Segundo, Calif.-based Radiology Partners Holdings LLC has been operating with cash flow deficits and high leverage over the past two years because it remained aggressive on acquisitions.
We believe Radiology Partners will continue to see cash outflows because receivables collections are delayed due to the arbitration process under No Surprise Act claims, as well as pressured margins due to a tight labor market, leading to a further tightening of its liquidity.
In addition, the revolving credit facility becoming current in less than six months and significant debt maturities looming in July 2025 elevate refinancing risk given current capital market conditions.
We lowered our issuer credit rating on Radiology Partners to ‘CCC+’ from ‘B-‘. At the same time, we lowered our issue-level rating on the company’s secured debt to ‘CCC+’ from ‘B-‘. The ‘3’ recovery rating on the debt is unchanged. We also lowered our issue-level rating on Radiology Partners’ unsecured notes to ‘CCC-‘ from ‘CCC’.
The negative outlook reflects our expectation that cash flow deficits will continue over the next 12 months, further pressuring liquidity, and raises the possibility of an unsustainable capital structure. It also reflects the increasing risk of a debt restructuring or below par repurchase, which we could view as distressed and tantamount to default.
TORONTO (S&P Global Ratings) June 5, 2023S&

[tdetlie_105]

Quote from dergon

[link=https://disclosure.spglobal.com/ratings/en/regulatory/article/-/view/type/HTML/id/2997104]https://disclosure.spglob…w/type/HTML/id/2997104[/link]

[b]Radiology Partners Holdings Downgraded To ‘CCC+’ On Tightening Liquidity And Cash Flow Shortfall, Outlook Negative[/b]

El Segundo, Calif.-based Radiology Partners Holdings LLC has been operating with cash flow deficits and high leverage over the past two years because it remained aggressive on acquisitions.
We believe Radiology Partners will continue to see cash outflows because receivables collections are delayed due to the arbitration process under No Surprise Act claims, as well as pressured margins due to a tight labor market, leading to a further tightening of its liquidity.
In addition, the revolving credit facility becoming current in less than six months and significant debt maturities looming in July 2025 elevate refinancing risk given current capital market conditions.
We lowered our issuer credit rating on Radiology Partners to ‘CCC+’ from ‘B-‘. At the same time, we lowered our issue-level rating on the company’s secured debt to ‘CCC+’ from ‘B-‘. The ‘3’ recovery rating on the debt is unchanged. We also lowered our issue-level rating on Radiology Partners’ unsecured notes to ‘CCC-‘ from ‘CCC’.
The negative outlook reflects our expectation that cash flow deficits will continue over the next 12 months, further pressuring liquidity, and raises the possibility of an unsustainable capital structure. It also reflects the increasing risk of a debt restructuring or below par repurchase, which we could view as distressed and tantamount to default.
TORONTO (S&P Global Ratings) June 5, 2023S&

 
Not too savvy with Moodys etc but what exactly does this downgrade do in real world terms?  Is it simply a perceptional issue?

[satyanar]

Raises the rate at which they can refinance their bonds.

[ruszja]

Quote from jd4540

Not too savvy with Moodys etc but what exactly does this downgrade do in real world terms?  Is it simply a perceptional issue?

It’s a credit rating for bonds. RP is now at the point that their own grandmother wouldn’t loan them money. If RP needed a car they had to get it at the ‘buy here pay here’ dealer.

It influences the interest you have to offer for people to buy your bonds. They are now considered junk bonds with a high risk of default.

[btomba_77]

The junkiest of junk

[tdetlie_105]

Thanks for the replies…So how does this likely play-out?  I remember reading (maybe on AM) about how PE that declares bankruptcy can still stay afloat. 

[ruszja]

Quote from jd4540

Thanks for the replies…So how does this likely play-out?  I remember reading (maybe on AM) about how PE that declares bankruptcy can still stay afloat. 

 
Sooner or later, there will be a chapter 11 bankruptcy. The bond holders will lose varying levels of their principal. The owners of common stock and stock opptions will lose everything. The executives will walk away with a golden parachute. The rads will get focked over the same way they ever were. The company will continue to exist.

[btomba_77]

Fitch puts Radiology Partners  in the basket that it expects to default within 2 yrs.
 
[link=https://www.fitchratings.com/research/corporate-finance/us-hy-bond-defaults-to-rise-despite-dip-in-concern-lists-14-06-2023]https://www.fitchratings….ncern-lists-14-06-2023[/link]
 
[b]U.S. HY Bond Defaults to Rise, Despite Dip in Concern Lists  [/b]
 
Our Top Market Concern Bond list declined modestly to $52.7 billion in June from $53.3 billion in May, as removals due to bankruptcy filings outpaced additions. Still, the list is up sharply from $17.3 billion in June 2022, underscoring the deteriorating environment over the last year. The Top Market Concern Bond list consists of HY issuers we expect will default within two years. Healthcare/pharmaceutical makes up the largest amount of the Top Market Concern Bond list at 34% of the total, followed by retail and telecom at 14% and 13%, respectively.

We added Mallinckrodt Pharmaceuticals to the Top Concern list amid litigation and ratings pressure. LevFin Insights, a Fitch affiliate, has reported that first lien creditors are requesting the company to skip a June payment under the opioid settlement agreement and some are pushing for Chapter 11 filing to prevent value leakage to junior opioid claimants. Global Medical Response, Radiology Partners and H-Food are other notable additions. We removed Envision Healthcare, Diebold Nixdorf, and Wolverine Escrow due to bankruptcy filings.

[satyanar]

When the bond market does not cooperate might as well go for a good old IPO! 
 
[link=https://www.benzinga.com/pressreleases/23/06/g32899690/radnet-announces-closing-of-upsized-public-offering-of-common-stock]RadNet Announces Closing Of Upsized Public Offering Of Common Stock – RadNet (NASDAQ:RDNT) – Benzinga[/link]
 
LOS ANGELES, June 16, 2023 (GLOBE NEWSWIRE) — RadNet, Inc. 
[link=https://www.benzinga.com/quote/rdnt] RDNT+1.71%+ Free Alerts
[/link]

, a national leader in providing high-quality, cost-effective, fixed-site outpatient diagnostic imaging services, announced today the closing of its underwritten public offering of 8,711,250 shares of its common stock at a price to the public of $29.75 per share, which includes the entire overallotment option to the underwriters of 1,136,250 shares. The gross proceeds to RadNet from the offering, before deducting the underwriting discounts and commissions and other offering expenses, are expected to be approximately $259.2 million.
 
[b]RadNet intends to use the net proceeds from the proposed offering to pay down $100 million of its first lien term loans and for working capital and general corporate purposes.[/b]
 

[satyanar]

Nothing like the stock market to take advantage of the greater fool theory.

[satyanar]

Bumping this as companion to the latest RP discussion. 

[tdetlie_105]

Quote from Thread Enhancer

When the bond market does not cooperate might as well go for a good old IPO! 

[link=https://www.benzinga.com/pressreleases/23/06/g32899690/radnet-announces-closing-of-upsized-public-offering-of-common-stock]RadNet Announces Closing Of Upsized Public Offering Of Common Stock – RadNet (NASDAQ:RDNT) – Benzinga[/link]

LOS ANGELES, June 16, 2023 (GLOBE NEWSWIRE) — RadNet, Inc. 
[link=https://www.benzinga.com/quote/rdnt] RDNT+1.71%+ Free Alerts
[/link]

, a national leader in providing high-quality, cost-effective, fixed-site outpatient diagnostic imaging services, announced today the closing of its underwritten public offering of 8,711,250 shares of its common stock at a price to the public of $29.75 per share, which includes the entire overallotment option to the underwriters of 1,136,250 shares. The gross proceeds to RadNet from the offering, before deducting the underwriting discounts and commissions and other offering expenses, are expected to be approximately $259.2 million.

[b]RadNet intends to use the net proceeds from the proposed offering to pay down $100 million of its first lien term loans and for working capital and general corporate purposes.[/b]

 
I am not super finance savvy so my question is this generally a workable plan?  What would be an analogous scenario for a family in debt (this may not be applicable)?…Will this affect what RadNet pays their rads currently? 

[afazio.uk_887]

There is no analogy as a person cant go public and sell shares of himself to other people.

[satyanar]

Its a workable plan because they were able to sell the shares to the greater fool. Thats the beauty of the stock market. It doesnt have to be true. Just have to have enough people believe.

[tdetlie_105]

Quote from Thread Enhancer

Its a workable plan because they were able to sell the shares to the greater fool. Thats the beauty of the stock market. It doesnt have to be true. Just have to have enough people believe.

 
So their operational budget stays the same (eg. rads get paid the same)?

[afazio.uk_887]

Yeah however any equity ownership in the company by Rads would go down and new shares are created to sell to the public, which is dilutive.

[satyanar]

They can spread the money around however they want now. If they cant recruit they may have to pay more to rads. The cost of doing business does become less because they dont have to service as much high rate debt. Pretty pathetic if a medical practice has a debt problem though. Means there is a skim.

[smfst7_929]

Quote from Thread Enhancer

When the bond market does not cooperate might as well go for a good old IPO! 

[link=https://www.benzinga.com/pressreleases/23/06/g32899690/radnet-announces-closing-of-upsized-public-offering-of-common-stock]RadNet Announces Closing Of Upsized Public Offering Of Common Stock – RadNet (NASDAQ:RDNT) – Benzinga[/link]

LOS ANGELES, June 16, 2023 (GLOBE NEWSWIRE) — RadNet, Inc. 
[link=https://www.benzinga.com/quote/rdnt] RDNT+1.71%+ Free Alerts
[/link]

, a national leader in providing high-quality, cost-effective, fixed-site outpatient diagnostic imaging services, announced today the closing of its underwritten public offering of 8,711,250 shares of its common stock at a price to the public of $29.75 per share, which includes the entire overallotment option to the underwriters of 1,136,250 shares. The gross proceeds to RadNet from the offering, before deducting the underwriting discounts and commissions and other offering expenses, are expected to be approximately $259.2 million.

[b]RadNet intends to use the net proceeds from the proposed offering to pay down $100 million of its first lien term loans and for working capital and general corporate purposes.[/b]

Im guessing general corporate purposes means fat checks to the fat cats in C suite.

Im considering shorting radnet. No way they are worth that much market cap. Maybe Ill just buy a long dated put for fun.

[satyanar]

The puts will be very expensive. It will also cost a lot to borrow shares. A short case is often air tight but arrives too late to cash in.

[satyanar]

Just checked the SP for RDNT. Up 78% YTD. Diluted EPS -0.36. Lost 21M last quarter. Makes perfect sense!

[satyanar]

WD, I dont know the RadNet structure very well. Do they thought themselves as a partnership where partners own worthless shares that will be more worthless?

[satyanar]

Remember I dropped this article in the middle of the Mednax discussion so it could be confusing. This is about RadNet. I assume jds questions refer to them and their latest IPO.

[mwakamiya]

“The gig is up!”