Increasingly, hospital administrators throughout the U.S. have encountered challenges in securing the requisite level of professional radiology services to meet the imaging needs of their patient populations. According to The American Medical Association’s 2022 Physician Practice Benchmark Survey,¹ 49.7% of radiologists surveyed were in private practice. By comparison, 46.7% of all physician specialties surveyed were in private practice, indicating that radiologists maintain private practices at higher levels relative to other specialties.

As a result of a significant number of radiologists in private practice, hospitals frequently enter a wide variety of arrangements with independent radiology groups. These groups provide, often on an exclusive basis, all diagnostic and interventional professional radiology needs arising from the facility’s outpatient and inpatient departments, surgery centers, and affiliated clinics. Through such exclusive arrangements, radiology groups bill and retain professional collections for their professional services, and in many cases, without any additional financial remuneration from the facility.

However, hospitals are often finding that many radiology groups are no longer willing or able to continue to provide professional services without some form of financial support.

In this article, Stout examines the following market and economic factors, which continue to impact hospital and radiology group alignment, as shown in Figure 1.

Shortage of Radiologists

Physician shortages continue to plague the U.S. healthcare system, as notably, The Association of the American Medical Colleges estimated an aggregate 4.3% physician shortage in 2024. With respect to radiology, in 2023 there were 37,482 radiologists enrolled to treat Medicare beneficiaries,² and the U.S. Bureau of Labor Services estimated a 4.0% job growth for radiology until 2033. Since there are only approximately 1,400 annual radiology residency positions in the U.S. (i.e., 3.7% of total Medicare-enrolled radiologists),³ the supply of newly trained radiologists is expected to fail to satisfy market demand.

Additionally, it is estimated that approximately one-half of practicing radiologists are at or near retirement age,⁴ which, over the next several years, could exponentially exacerbate the radiology shortage.

Increased Imaging Demand and Demographic Changes

An aging U.S. population is expected to significantly contribute to increases in imaging demand. In 2025, the 65-and-older demographic was approximately 62.7 million, and is projected to increase by over 14%, to 71.6 million in 2030, representing over 20% of the U.S. population.⁵ The 65-and-older demographic has notably higher utilization levels of healthcare services compared to younger demographics. Additionally, the U.S. population is expected to grow from 350 million in 2025 to 372 million by 2055, further contributing to overall imaging demand.

A 2025 study from The Journal of the American College of Radiology projected future imaging utilization through 2055 based on population and demographic changes and utilization trends and found that imaging utilization is expected to be 16.9% to 26.9% higher by 2055. Patient demographic changes accounted for between 73% to 88% of the projected imaging utilization increases.

As a result, hospitals and radiology groups throughout the U.S. are grappling with servicing increases in imaging demand, largely driven by an aging patient population, which continues to outpace the market supply of radiologists.

Reimbursement Trends

Reimbursement trends for professional radiology services continue to create financial pressures for hospitals and radiology groups. The Centers for Medicare and Medicaid Services (CMS) final rule for the 2025 Physician Fee Schedule (PFS) included a 2.8% decrease to the MPFS conversion factor, from $33.2875 to $32.3465.⁶

Stout analyzed the impact of the professional reimbursement changes from the 2025 MPFS for the top 20 diagnostic radiology CPT Codes in Table 1. Except for CPT Code 71045 (X-ray exam chest 1 view), which benefited from an increase to the practice expense relative value unit (RVU) from 0.06 to 0.07, Medicare reimbursement on a per CPT Code basis decreased from 1.65% to 2.89%. By applying a weighting to the top 20 CPT Codes, the overall Medicare reimbursement decrease is 1.91%.

With respect to interventional radiology professional services, an analysis from Healthcare Administrative Partners noted a similar decrease of 1.8% in professional Medicare reimbursement resulting from the 2025 MPFS.⁷

As commercial payor reimbursement tends to follow Medicare reimbursement trends, declines in commercial reimbursement rates for professional radiology services may also contribute to the financial pressures faced by radiology groups. Furthermore, given the aging U.S. demographic, the insurance mix of patients is expected to continue to worsen.

The Journal of the American College of Radiology projected that, by 2055, the Medicare fee-for-service insurance patient population is expected to increase by 8.9% and the Medicare-Advantage patient population will grow by 70.7%.⁸ Medicare reimbursement is widely known to be significantly lower than commercial reimbursement, as evidenced by an analysis from the Urban Institute in 2021, which found that commercial reimbursement for radiology services is approximately 180% of Medicare reimbursement.⁹ The transition in payor demographics from commercial to Medicare is likely to result in greater financial hardship than the declining trend in Medicare reimbursement rates alone.

These negative reimbursement trends and changing payor demographic will progressively add to the financial strain for hospital imaging departments and radiology groups alike.

Radiology Compensation Trends

With respect to trends in radiology compensation, Stout has observed that, from 2022 to 2024, the weighted average median total compensation has increased by 3.7% for diagnostic radiologists, and 9.4% for interventional radiologists, based on review of several national physician survey data sources, as shown in Table 2. By comparison, nonsurgical specialists reported an overall 1.8% increase in median total compensation.¹⁰

From a productivity standpoint, weighted average median work RVUs (wRVUs) have increased by 5.2% for diagnostic radiologists, and 3.9% for interventional radiologists over the same period.

The increase in radiology compensation is likely a function of increases in imaging utilization, as evidenced by the observed increase in wRVU productivity, demanded from the relatively stagnant radiologist supply.

Further, such volume increases contribute to physician burnout and fatigue, causing many radiology groups to reduce or limit the scope of their coverage service obligation with hospitals.

Hospital-Radiology Arrangement Structures

As a result of the radiologist provider shortages, increases in imaging utilization, and the worsening reimbursement trend, radiology groups are increasingly seeking financial remuneration from hospitals. Stout has valued a significant number of professional services arrangements between health systems and radiology groups, which can significantly vary in terms of services scope and financial commitment. Table 3 contains a summary of the most common hospital-radiology arrangement models.

Increasing Level of Financial Commitment	Model	Description
	Professional Services Arrangements (Compensation per wRVU) or Direct Employment Agreements	Under professional services arrangements (PSA), hospitals will compensate radiology groups a fixed rate per wRVU for their professional services. Such wRVU rates may be adjusted to account for physician benefits and taxes, or alternatively, a fixed benefits and taxes stipend per FTE may be provided. Certain other provider expenses, such as malpractice insurance expenses, continuing medical education expenses, and dues and subscriptions, may be reimbursed separately. The hospital will bill and retain all professional collections provided by the radiology group. Additionally, the scope of such arrangements may only contemplate remuneration for interventional radiology services provided by the group. Alternatively, and except for several states, hospitals may directly employ radiologists and will typically establish compensation via an annual base salary, a compensation per wRVU rate, or a combination of the two.
	Financial Subsidy / Support Payment	Hospitals may compensate radiology groups with a fixed monthly or annual support payment to subsidize the difference between the radiology group’s cost to provide the contractually required coverage services and their professional collections. Such arrangements typically detail the required level of interventional and diagnostic coverage requirements and may require the group to provide additional administrative/medical director services. As an alternative to a fixed subsidy arrangement, the parties may establish a fixed collections guarantee which is determined based on the radiology group’s cost to provide the contractually required services. On a quarterly and/or annual basis, the parties will reconcile the group’s actual professional collections relative to the collections guarantee amount, and the reconciled difference will equate to the support payment to the group. Such arrangements may be more flexible where the parties have greater uncertainty with respect to the group’s prospective level of professional collections.
	Third-Party Teleradiology Support Cost-Sharing	Due to radiology shortages and physician burnout, many radiology groups directly contract with third-party teleradiology providers to assist with after-hours interpretations arising from a hospital’s emergency department. Hospitals may elect to provide partial or full reimbursement of the radiology group’s third-party teleradiology cost. Alternatively, hospitals may directly contract with the third-party teleradiology provider, thereby assuming the full cost to secure after-hours radiology coverage. Fees for third-party teleradiology coverage vary significantly depending on whether such teleradiology provider is performing preliminary interpretations (with the local radiology group performing and billing for the final interpretation), or final interpretations (billed by the teleradiology provider).
	Per Diem Payments	Radiology groups provide continuous on-call services on behalf of a hospital’s emergency department, including interventional radiology coverage and/or diagnostic radiology on-call coverage. In exchange, hospitals compensate such groups a per diem payment for each 24-hour shift, and radiology groups independently bill and collect for professional services rendered.
	CPT Code Arrangements (Global Billing and Self-Pay Patient Populations)	For certain CPT codes which may only be billed by the facility on a global basis, hospitals provide per-study fees to radiology groups for the professional interpretation component. Separately, for diagnostic interpretations provided to unfunded or self-pay patient populations, hospitals may compensate radiology groups with a per study fee, and such group is precluded from separately billing.
	Exclusive Provider Arrangement (No Remuneration)	Radiology groups agree to function as the exclusive provider of diagnostic and/or interventional radiology services of a hospital, and independently bill and collect for professional services rendered, without any form of remuneration from the hospital.

The type of hospital and radiology provider arrangement structure varies significantly by market and is an important factor in a hospital’s ability to adequately secure the requisite level of radiology services and to comply with state and federal regulations.

Identifying the proper structure and fair market value compensation range for these arrangements requires a thorough understanding of the unique dynamics and specifics of each relationship and insight into the characteristics of the local market.

1. Carol Kane, “Recent Changes in Physician Practice Arrangements: Shifts Away from Private Practice and Towards Larger Practice Size Continue Through 2022,” American Medical Association, 2023.
2. Eric W. Christensen, Jay R. Parikh, et al., “Projected US Radiologist Supply, 2025 to 2055,” Journal of the American College of Radiology, Volume 22, Issue 2, February 2025.
3. Gregory N. Nicola, “How Will We Solve Our Radiology Workforce Shortage?” American College of Radiology Bulletin, March 1, 2024.
4. Stefanie Asin, “The radiologist shortage, explained,” Becker’s Hospital Review, December 31, 2024.
5. Jasmine Castroverde and Ronamil Portes, “1 in 5 Americans to be 65 years old or older by 2030,” S&P Global, November 14, 2024.
6. “History of Medicare Conversion Factors,” American Medical Association.
7. Sandy Coffta, “Medicare Proposed Rule Again Cuts Radiology Reimbursement in 2025,” Healthcare Administrative Partners, HAP Radiology Billing and Coding Blog, July 25, 2024.
8. Eric W. Christensen, Alexandra Drake, et al., “Projected US Imaging Utilization, 2025 to 2055,” Journal of the American College of Radiology, Volume 22, Issue 2, February 2025.
9. Stacey McMorrow, Robert A. Berenson, and John Holahan, “Commercial Health Insurance Markups over Medicare Prices for Physician Services Vary Widely by Specialty,” Urban Institute, October 2021.
10. “2024 Provider Compensation Data Report,” Medical Group Management Association.