One of the three acquisitions that physician-staffing giant Mednax has made already this year is a radiology group in Nashville, its first hospital-based radiology practice.
The purchase last week of 64-physician Radiology Alliance PC and Infinity Management complements Mednax's growing teleradiology division known as vRad, Mednax CEO Roger Medel told analysts during a fourth-quarter earnings call Tuesday.
vRad is short for Virtual Radiologic Corp., a company that Mednax acquired for $500 million in 2015.
Medel said Mednax expects to acquire additional radiology practices this year, giving the company an “on-the-ground” presence in hospitals to go along with 24-hour coverage of about 500 radiologists and other professionals able to read and interpret X-rays and other images remotely.
The acquired Radiology Alliance is the largest hospital-based radiology group in Tennessee, serving at nine hospitals in middle Tennessee operated by HCA's TriStar Health System, Medel said. In addition to the 64 physicians, the group has six clinical support staff. The group also does business in Kentucky.
Terms of acquisition were not disclosed.
Radiology practices are increasingly selling to aggregators like Mednax for their information technology and better access to data.
Also this week Mednax acquired Newborn Intensive Care Specialists, a private practice in Spring, Texas, that employs 14 physicians and 12 advanced practitioners who serve in various hospital departments, including neonatology, maternal-fetal medicine, newborn hearing screening and pediatric services.
The group is at seven hospitals in the Dallas and Houston markets. Terms were not disclosed.
In early January, Mednax completed the acquisition of Western Newborn Specialists, a Salt Lake City-based neonatal group with six full-time neonatologists. Terms were not disclosed.
Fort Lauderdale, Fla.-based Mednax is the nation's largest contract provider of neonatologists to hospitals and provides physician staffing in anesthesiology, pediatrics and other hospital departments. It employs more than 3,650 physicians, trailing the two largest such physician staffing companies, Envision Healthcare and TeamHealth.
An unusually low number of births nationally in the fourth quarter dinged earnings in the quarter, Medel told analysts.
Lower birth rates result in fewer neonatal admissions, he said.
For the fourth quarter, Mednax posted net income of $78.1 million, or 84 cents per share, compared with net income of $92.7 million, or 99 cents per share, in the year-earlier period.
Revenue in the quarter jumped to $830.8 million from $741.8 million, largely as a result of more than a dozen acquisitions in 2016 that added annualized revenue of nearly $3 billion. Mednax spent about $760 million on those deals in 2016.
Same-store revenue in the quarter dipped 0.1%, largely as a result of slower volumes in neonatal units.
Medel told analysts he saw no special factors that affected births in the quarter. However, births in the United States have dropped sequentially over the past 10 years from about 4.4 million annually to 4 million.
He said Mednax expects those numbers to begin to rise in the coming years as the children of the baby boomer generation begin to have children.