Rich Whitney, Founder, Chairman & CEO of Radiology Partners 5-10-24

This episode features a deep dive into the transformative role of technology in radiology and healthcare, particularly through the lens of artificial intelligence (AI).

1. Radiology Partners uses AI to enhance diagnostic accuracy, significantly improving detection rates of critical conditions.
2. The company has implemented the largest known deployment of clinical AI tools in the U.S., impacting millions of exams annually.
3. Their partnership with AWS aims to expand the accessibility and effectiveness of AI tools across healthcare settings.
4. Whitney emphasizes the importance of scale and technology in transforming radiology's role within healthcare.
5. The episode discusses the broader implications of digital innovations on the efficiency and sustainability of healthcare systems.

1: Introduction

Scott Becker introduces Rich Whitney, who shares the background of Radiology Partners and its core mission. Rich Whitney: "Radiology has become critically important to our healthcare delivery system."

2: The Impact of AI in Radiology

Whitney discusses the transformative impact of AI on radiology, highlighting significant advancements in diagnostic tools. Rich Whitney: "We have about 25 million exams per year that run on artificial intelligence algorithms."

3: Future Prospects and Challenges

The conversation shifts to future innovations in radiology and the challenges of integrating new technologies in healthcare. Rich Whitney: "The future is very bright in this area."

1. Leverage digital tools to enhance diagnostic accuracy.
2. Invest in AI to improve healthcare outcomes.
3. Collaborate with technology partners to expand capabilities.
4. Focus on scalability to adapt to future healthcare needs.
5. Maintain a patient-centered approach in technological advancements.

This episode features Rich Whitney, Founder, Chairman & CEO of Radiology Partners. Here, he shares insights into his background, how Radiology Partners is unique compared to others in this space, the growth model of his organization, advice for founders, and much more!

People

Scott Becker, Rich Whitney

Companies

Radiology Partners, Amazon Web Services

Books

None

Guest Name(s):

Rich Whitney

Content Warnings:

None

Scott Becker

This is Scott Becker with the Becker Private equity podcast. Today I've got the pleasure to visit with one of the most successful investors and founders I've come across in my 20 to 30 years, or 30 years plus in healthcare. We're visiting today with Rich Whitney of radiology Partners. I've known rich for a very long time. He's going to talk to us today about radiology partners, what he's watching in the market, and a lot more.

Rich, can you take a moment and introduce yourself and tell us about radiology partners? Sure. First of all, thanks, Scott. Really appreciate the opportunity to chat with you today. And we've known each other over the years.

Rich Whitney

It's been a long time since we've talked, so I'm excited to talk a bit. So it was a kind introduction to Scott. And what I would only add to that is that I've been in the healthcare industry for, gosh, almost 30 years at this point in time. And people often ask me, did you get into healthcare for some sort of wonderful altruistic reasons? And I always say, no, I didn't.

But over the course of a 30 year career, I've stayed in healthcare because it is really one of the only areas where you can apply your business skills to an outcome that has not just the business outcome, but has an outcome that can have a significant impact on patients and people's lives. And that's a tremendous gift that I am very, very grateful for having for the past three decades a little bit about radiology partners. We founded the business about twelve years ago, and it was really based upon a fundamental thesis that radiology had become critically important to our healthcare delivery system because of the expansion of an advancement of imaging technology. And it become really one of the most important and powerful tools in healthcare. If you sort of step back a little bit, the ability to digitally see inside the body and increasingly even at the molecular level.

So very, very powerful tool that can have a very big impact on downstream outcomes, quality costs, and even patient service. And yet, what we saw at the time was that the field was incredibly fragmented, with an average practice size of nine physicians. Actually, I think that was a medium practice size. And therefore most groups didn't have access to capital or the scale to make investments and drive innovation and really kind of take advantage of the fact that radiology is really in this fulcrum position in the healthcare system. And what we saw at the time was with the healthcare system really kind of struggling to move from fee for service to more value based reimbursement programs in fact, even more than a decade later, we're still, as an industry, struggling to make as much progress as we would like in that area.

But with the industry struggling to make that transformation, what better place to be in than to be in the center of the action and being the specialty that is most heavily relied upon to help determine what to do next, essentially, or in some cases, what not to do next, which has interesting ramifications for resource utilization in our healthcare system. So that was the fundamental thesis, and we felt like we would have to build a radiology practice of very substantial scale to be able to make the investments in technology and people and clinical programs that could deliver on that promise of being able to play a bigger role in the healthcare system and in this transformation of value based care. Rich, thank you so much. I mean, before we get into the gist of the entire podcast, give us a moment on how you view radiology partners as unique and what you see there. How do you view it as unique in what you're doing?

Well, in many ways, Scott, but I think one of the things that I would say that's top of mind right now, just because of what's happening both inside and outside of healthcare as it relates to the advancement of artificial intelligence and other advanced technologies. One of the things that makes us unique is that everything we do is digital. We are arguably one of the most, if not the most, technology enabled segments of healthcare, and therefore, we're at the tip of the spear as it relates to the implementation of AI tools within healthcare. And I would say that we've been involved in this. It's becoming a hot topic these days.

We've been involved in developing, using artificial intelligence tools and radiology for about six years now. And we have what is the largest known deployment of clinical artificial intelligence tools in the US, I would argue, in the world. I'm not sure which would be bigger, but we have about 25 million exams per year that run on artificial intelligence algorithms that assist our physicians to help them do a better job for our patients. And I got to tell you, I'm very excited about the results that we're seeing already, as well as what that implies for the future, and radiology's ability to have a bigger and bigger impact done on our healthcare system. So, for example, the algorithms that we have in production, we're seeing what we call enhanced detection rates.

I think it's pretty obvious what that means. We catch something that we wouldn't have catched without caught, without the assistance of the technology. And we've seen enhanced detection rates ranging from 3% for things like large vessel occlusion, which relates to stroke, all the way up to 313%, if you can believe that, for, for rib fractures. Now, that may sound like rib fracture. I don't know how important that is.

But one of the things we track, in addition to enhanced detection rates are what we call wow cases where we had the technology had a very big impact on patients, and we had one recently where the technology caught a rib fracture that the physician had missed. And upon further review of that rib fracture by the physician, it was determined that there was bone mass cancer, essentially, that existed in that area of that red fracture. These are really important patient impacts. Where we're finding more cancers, we're finding disease that otherwise would be missed. Things like pulmonary embolism, where enhanced detection rate is plus 35% intracranial hemorrhages.

We're finding tools that look at all segments of the intracranial arteries for stroke have an enhanced detection rate of 27%. This is really fascinating. Breast cancer is another one. We're still validating our tools and getting them ready for production. But I'm very excited about a recent study that came out of Europe with a 28% enhanced detection rate for breast cancer.

Very impactful, very provocative results. This is not like small scale studies. We're doing this across 25 million exams, 15 approximately individual, unique patients each and every year. So this is really exciting for advancing quality and consistency and healthcare outcomes in the US, again, particularly given how much of the healthcare system imaging touches. And on the flip side, we're also seeing some improvements in efficiency, ranging from eight to 15%, which is important too, right?

Our challenge as healthcare leaders is to drive continued advancement in clinical care, clinical outcomes, but to do it in a way that recognizes that there are unlimited resources. And in order for our healthcare system to be sustainable over the years, we have to always be doing more with less. And so these tools are also impacting cost of care and efficiency as well. So I'm quite excited about that. We've just recently entered into a partnership with Amazon Web Services AWS in order to be able to create a platform for our artificial intelligence package of artificial intelligence tools that can be easily and rapidly deployed across various care settings.

And so I think the future is very bright in this area. And when we started RP, yeah, twelve years ago, when we started RP, we have always been guided by this notion that radiology at scale, with resources and technology, and the ability to make the investment and the right culture and the right engagement of our people and our physicians, that we could have a really big impact, not just on the radiology field, but on the healthcare field overall because of the central role that we play. I have to say we didn't envision this wave of artificial intelligence technology back at that point in time, but it fits right into our thesis because it's just a new set of tools that. That enable our physicians to essentially multiply their skills and to deliver a much better result for our patients, while again, at the same time doing so with appropriate conservation of resources. Now, I'm gonna ask you, rich, an unfair question, so bear with me here, okay?

Scott Becker

It'll be fine. I promise. Now, you're by nature. You nor I are by nature. Of course, neither of us are from physician backgrounds, healthcare backgrounds.

As a patient, I've, of course, learned the difference over the years between what x rays do and mris do and so forth. Would you do me the favor? And I know this is. You'll tell me this is unfair, and we'll cut it if it's unfair, but if you could tell me sort of the core, different imaging modalities that a firm like radiology partners does, what are the core models? I know x ray, MRI, CAT scans, what are the core modalities?

And just very generally, what are the different uses of different modalities? And you just have to get the big ones. I know that there's all kinds of subspecialized things, but can you give me a sense of that? Because as a patient, I've learned a lot about x rays versus mris and soft tissue versus bones, but I'd love to learn more, as long as I've got you on the phone for a few minutes on the podcast. Yeah, well, I think what I'd say is that we are providing the interpretations of virtually all types of images.

Rich Whitney

So our physicians are evaluating the data that comes from those imaging exams and helping the other members of the care team, referring physicians and others, determine what the diagnosis is and what the appropriate next steps are. So, it ranges from MRI to ct to ultrasound to x ray to mammography for breast cancer to nuclear medicine, to also interventional procedures, which are essentially image guided, minimally invasive surgery, where we are essentially the lower cost and often higher outcome, higher quality alternative to a surgical invasive surgical analog. So it really is across the full range of use of imaging technology, which, as I mentioned before, has become a deeper and deeper component of our healthcare delivery system. And it ranges in terms of what it's used for. It ranges, really across all aspects of the system.

So imaging is heavily relied upon for screening and prevention, diagnosis, of course, and treatment. As I mentioned, I think about twelve or 13% of what we do are these minimally invasive, image guided surgical techniques, otherwise known as interventional radiology. It really has cut across the entire breadth of healthcare. And even if you think about it, from, from the disease state, imaging is heavily relied upon for chronic diseases, acute injuries, again, screening and prevention, and it is heavily relied upon for just about every disease state, certainly the ones we spend the most money on, like cancer and cardiovascular disease and neurological diseases, etcetera. 100%.

Scott Becker

Yes, yes. And thank you so much. I know, I know it's not, you don't put yourself out of anything other than a great leader of the business of healthcare. But I just assume in 1215 years of founding, being involved in radiology partners, you've got that kind of feel for it, which is fantastic. And thank you.

I mean, it is amazing when you think about whenever you go to get any kind of procedure today or any kind of diagnosis, the concept that at some point in medicine they were doing this without imaging is incredible. It feels like really, truly operating and diagnosing in the dark versus what is done today with the ability to use imaging how they use it. So I can't even, it's hard to even imagine healthcare without the level of imaging we have today. And I know it's still advancing tremendously. Rich, there's a question coming, I promise.

Take a moment and tell us about the model of radiology partners, the sort of growth of it. Do you partner with hospitals? Do you partner with physicians? Are you contracted with hospitals? How does it all work?

How does radiology partners work and operate? Sure. So radiology partners you can think about as a very large physician practice, we've got about 3800 physicians in our practice at this point in time, and our physicians are partners and owners in our practice. And together with our support teams, we provide radiology interpretation services to hospitals, health systems, outpatient centers, clinics, freestanding ers, really across the range of healthcare facilities. And you know, really what we have tried to do from the beginning is we're in a, this is a physician business, of course, and so the physicians are at the center of what we do.

Rich Whitney

And what we're, we've been working to do over the course of the last decade or so is maintain all of the really important aspects of physician practice that has for so many years been done on a very small scale or even individual proprietary scale back in the beginning, and try to bring the benefits of scale and resources and support functions, etcetera, to those physicians to enable them to do a better job for patients in the end, and to do it in a way that is sustainable economically for the healthcare system. So we're trying to preserve all the good things about small private practice, recognizing that the healthcare system is changing and scale is critically important today and certainly in the future of our healthcare system. And we're trying to bring those advantages of scale and access to capital and resources and investment to bear while maintaining the positive aspects of physician led organizations, physician owned organizations, et cetera. Fascinating. I'm going to ask you a few more questions.

Scott Becker

The first question I'll ask you, which is right down the middle, rich, what are you most focused on and excited about this year? Where are you most focused and excited this year? Well, I'm really excited as I look forward for really the next ten years in healthcare and in radiology's role in healthcare. And I think the most obvious thing to be excited about would be the emergence of the rapid development of advanced technology. In our space.

Rich Whitney

That technology might be known as AI, or large language models, or computer vision technology, et cetera. So radiology, because of its nature as a digital business, everything we do is digital. Images are taken in a digital form, images are moved or transferred around the digital form, physicians interpret images in the digital form, they report results in the digital form. And we are arguably the most technology enabled segment within healthcare. And therefore, as technology is advancing on the AI front, we are a bit of a tip of the spear.

Having already been digitized, we are seeing the opportunity to use this new technology to drive improvements in patient outcomes and to drive improvements in cost, too, quite frankly, in order to make sure that we're continuing to deliver the best health care to patients, and to continue to continuously improve upon that, while at the same time doing so in a way that's sustainable from a resource standpoint for the health care system overall, I'm quite excited across the board. We have reached a point where we have sufficient scale, sufficient resources and capital to continue to drive our business forward. Over the last ten or twelve years, I think we've made quite a bit of progress in fundamentally changing the role of radiology in our healthcare system. Things ranging from formal clinical programs and clinical metrics, to take a field that historically has not had great measures of quality and institute measures of quality, and, you know, the processes necessary to monitor and measure and manage those outcomes. We are, in addition to AI technology, bringing new tools to our physicians to help them practice better for patients and make it easier for them to practice and make them more efficient in order to, again, ensure that we're being good stewards of healthcare resources at the same time as we're driving advancements in care.

So I'm excited about all of the opportunities that lie ahead for us. But I think the one that's most obvious and perhaps most compelling over the course of the next ten years is where we're heading from a technology standpoint. Fantastic. And the next question is, you've worked with some of the most fascinating leaders in healthcare. Talk a little bit about either those leaders or about ideas or advice that you would give to emerging leaders based on yourself.

Scott Becker

You've had this incredible leadership career, plus some of the other fascinating people that you've worked with that you'd like to reflect on. Yeah, I've really been fortunate to be exposed to and work with a lot of what I consider transformational leaders in healthcare and the lessons that come over the years that maybe if I could boil down to provide some thoughts for your listeners, I would say in healthcare services, we have to remember that it is a people business and it's physicians, it's people that support physicians. And you really only have two assets. You have your people and your culture. And we firmly believe that at RP that we only have the ability to maximize our potential by being the organization that attracts and retains highly talented people, that develops leaders and creates a kind of culture that is driven by a focus on the patient above all.

Rich Whitney

So I think really the importance of people and culture can sometimes be underestimated in the healthcare world. I think the second thing is that I think, by the way our healthcare system has evolved. We've all, most of the participants, I would say right from regulators on down, have concluded that it's going to take a substantial amount of scale to be able to really to continue to provide high levels of care, ideally improve those levels of care, and to do so in a way that's sustainable for our healthcare system over time. And it's not that easy to build that scale out without losing sight of some important characteristics that make healthcare organizations successful. So one of those is physician leadership.

And that's easy to say. And a lot of organizations say, oh, physician leadership is important for us, but really takes focus on long term, sustained investment in your physicians and developing them as leaders. Because one of the things that we are not wrestling with, I would submit, as a healthcare industry, is that while we're all pushing towards more scale, for all of the reasons why that's important, access to capital, ability to make substantial investments to drive innovation in technology, etcetera. While that's all important, the one thing we're not recognizing is that we don't have a lot of health, have a lot of physicians who are prepared to lead at that multibillion dollar scale. And if we ignore that, the result is, and we've seen this in various healthcare organizations over time, the result is that physicians get marginalized.

And one of the things that we've been striving towards since our founding is making sure that we're making those deliberate investments in our people, in our physicians. So it's that over time, they are increasingly prepared to be able to lead at that multibillion dollar scale level. And the better job we do in that, the more successful we will be as an organization. And so easy to say, more difficult to do. But we have a very conscious investment program that involves both didactic training and experiential training.

It involves making sure that our physicians are ingrained in how we run the practice, not just clinically, but in all the aspects of the business, such that, number one, it helps us make better decisions with a high degree of physician involvement. But number two, the more we involve our physicians in all aspects of the business, the more capable that they become over time to be more and more impactful leaders of a large scale clinical organization. So I think that's critically important. Like I said, easier said than done, but one of the more important drivers of creating a sustainable, large scale healthcare organization that actually drives transformational change. Rich, I guess I'll ask you one last question, and we often think of founders as needing a mix of really at least three things, and I'd love your comments on this, is driving motivation slash passion for what they're doing.

Scott Becker

Second is building teams and talent and teams teams. And third is some sort of market fit or product fit, something that somebody really needs or wants, that there's a customer out there for it. Would you mind taking a moment on any further advice you would have for founders around what it takes to be successful in founding a business? You've done it now a handful of times and involved in several other startups. Any thoughts or reflections on that?

Rich Whitney

Well, I think that's the three that you laid out are, I think, spot on. And the first two being critical. It's relatively easy to find market fit. I think it's much more difficult to scale an organization and develop that culture where not just the founder is passionate about the prospects and the results of the organization, but a broad swath of the team is. So I think that's very important and not that easy to achieve.

From our perspective, at RP, we try to attract people that want to be here because of the importance of what we're doing and the impact that we have on patients. And we understand that if we do all the right things for patients and our client partners, that their business will be successful. But it's very much a focus on the outcomes for patients, the outcomes for client partners, the outcomes for the healthcare system. If you do very well on those, your business outcomes will follow. And sounds so trite and simple, but if you have that flipped around and you're focused on the business outcomes, it doesn't follow that good outcomes will follow for patients, for client partners, and for the healthcare system.

So we're very focused on making sure we've got those priorities in the right place and that we attract and retain people who want to be here, not just because they think it's a great business opportunity or career opportunity, but they're very passionate about what they're a part of delivering. And we do our best to instill that in our physicians and in every one of our support team members. In RP, we only have two types of people, physicians and support team members. And support team members are only here to support the physicians and the lifesaving care that they provide. And we want people who are passionate about that.

And we work really hard in maintaining and building that passion, even amongst our physicians. You might be surprised that sometimes people who have gotten into the healthcare field largely because of their passion for taking care of others, over time, they can begin to lose sight of the power of their work and the contribution they're making. So we also are quite deliberate about reminding our physicians and highlighting our physicians as a way to make sure that they don't lose that spark and that passion for what they're doing for patients in the healthcare system. It's such important work, and they should be proud of it. And sometimes they lose sight of that.

Scott Becker

Rich, what a pleasure to visit with you. And thank you so much for joining us on the Becker Private Equity podcast. Continued success. Just amazing what you've accomplished. Thank you very much for joining us.

Rich Whitney

Thank you so much, Scott.