🔒Greater Hartford radiology groups duel over expansion plans

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Proxy wars are often fought between nation states, but one is brewing between Hartford’s two largest health systems.

The direct battle involves one of Connecticut’s largest radiology groups, which is fighting through the state’s regulatory process to block a competitor’s bid to expand on its coveted Bloomfield turf.

Hartford HealthCare (HHC) and Trinity Health Of New England are closely tied to the groups, Jefferson Radiology and Radiology Associates of Hartford, through contracts or ownership stakes.

HHC owns a 49% stake in Jefferson, which has numerous Greater Hartford locations, through a longstanding joint venture that has grown in recent years, while the physician-owned Radiology Associates bills itself as an exclusive radiology provider to three Trinity-owned hospitals, including its flagship St. Francis Hospital and Medical Center in Hartford’s Asylum Hill neighborhood.

Jefferson is trying to block Radiology Associates from opening a new imaging facility in Bloomfield, and from changing its legal structure to allow for future expansion.

Jefferson says its involvement has nothing to do with competition. Instead it says it’s trying to make sure the state uniformly enforces its own complex set of regulatory standards that govern new equipment purchases and aim to ensure the healthcare system doesn’t build up costly excess capacity.

The spat comes amid intense competition in Connecticut’s healthcare industry, as hospitals and other providers try to keep and grow market share.

HHC and Trinity are among a handful of regional or statewide hospital systems that have either formed or grown larger through a wave of acquisitions and consolidation over the past decade, and their radiology partners want to grow alongside them.

Some industry observers say such fights are an example of how healthcare providers try to use the state’s regulatory process to chase or stay ahead of competitors.

“It’s not necessarily about improving care or about making care less costly,” said Dr. Steven Levine, a Trumbull-based ear, nose and throat physician with no ties to the regulatory fight in question. “Entities tend to try to protect their turf.”

Making the case

Similar disputes over market or equipment expansions have taken place between healthcare providers in recent years, and typically neither side talks much, or at all, about competition or market share.

Instead, opponents craft arguments seeking to prove that there isn’t a public need for a new service in a particular area, or that a transaction wouldn’t be financially viable, or would fail to improve care quality, accessibility or cost.

Those are key metrics the state’s Office of Health Strategy (OHS) uses to decide whether to grant a so-called “certificate of need,” which providers must get in a variety of situations, like when they want to purchase a new MRI scanner, or acquire another group or hospital.

Radiology Associates has argued that OHS should approve its $2.9-million purchase of MRI and CT scanners for a new facility in Bloomfield.

The group, which as a professional corporation must be owned by physicians, is also seeking permission to transfer ownership of the new equipment, as well as existing scanners it operates in Enfield, Glastonbury and Avon, into a newly formed entity, Eastern Radiology Associates LLC. The change in legal structure would mean hospitals and other providers could invest in the company to fuel future growth.

Jefferson President Dr. Ethan Foxman has sought to pick apart portions of Radiology Associates’ application as misleading or inaccurate, urging OHS to deny the entire application.

For example, Foxman challenged which towns the group selected to comprise its proposed Bloomfield facility service area, and charged it had not included some other area scanners when determining equipment capacity.

Radiology Associates, which sought unsuccessfully to block Jefferson’s involvement in the proceeding, has pushed back against Foxman’s claims, calling his testimony “riddled with so many misstatements and overstatements.”

Dr. Michael Twohig, Radiology Associates’ president and chair of radiology at St. Francis Hospital, declined comment for this story.

The stakes are relatively high, as the outcome could grant or deny Twohig’s group an additional $1 million to $2 million in annual operating revenue, some of which could come from patients poached from Jefferson’s Bloomfield operation.

Aside from the occasional tense moment during cross-examination, the proceeding mostly comes across as civil, with both sides sticking to dry, technical arguments about metrics that can make or break an application to OHS.

At the end of a recent public hearing, Foxman even said he was in “an awkward position” to be opposing Radiology Associates, whose physicians he referred to as colleagues and whom he holds in high regard.

In a statement provided for this story, Foxman said the matter “illustrates the complexities of healthcare policy and decision making.”

Jefferson’s intent, he said, is to “provide perspectives” that would be helpful to OHS in evaluating the application. “Overall, we have confidence that the final determination by OHS will be in the best interests of the citizens of Connecticut,” he said.

An OHS spokesman said the agency doesn’t comment on pending cases.

Accommodating healthcare’s evolution

Much of Radiology Associates’ case has involved two competitors arguing over technical rules and calculations.

But Radiology Associates has also sought to raise a broader question about the certificate-of-need (CON) process and whether the state’s regulatory framework helps or hinders the healthcare industry’s long-stated goal of abandoning a fee-for-service business model in favor of emerging network designs and contracts that emphasize lower-cost community settings, increased coordination and improved health outcomes.

Twohig has argued that Connecticut’s rules for determining whether a new scanner is necessary in a particular area are outdated and could restrict the way networks deploy equipment.

Specifically, more healthcare organizations are trying to move services out of hospitals and into lower-cost, suburban settings, but OHS rules could impede those efforts.

Levine, the Trumbull physician who is critical of certificate of need, and the Connecticut State Medical Society have argued that providers should be allowed to buy all the imaging equipment they want, while others have said that a free-market approach would drive up costs.

A 2017 state task force that studied Connecticut’s rules recommended no significant changes to imaging-related approvals.