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Outsourcing group Aris Teleradiology lands private equity investment

Radiology outsourcing group Aris Teleradiology has received an unspecified private equity investment from Great Point Partners. The deal is yet another example of the attractiveness of radiology outsourcing companies to investors. The trend is being driven largely by technology advances and healthcare cost pressures, which have combined to create a lucrative market for the companies […]

Radiology outsourcing group Aris Teleradiology has received an unspecified private equity investment from Great Point Partners.

The deal is yet another example of the attractiveness of radiology outsourcing companies to investors.

The trend is being driven largely by technology advances and healthcare cost pressures, which have combined to create a lucrative market for the companies stepping up to provide radiology services as hospitals look to save cash any way they can.

Hudson, Ohio-based Aris will use the investment to fund sales and marketing efforts and personnel expansion aimed at winning more hospital contracts, according to a statement. Aris provides clients with around-the-clock access to radiologists, subspecialty coverage and operations support, including teleradiology services, which are provided remotely.

“The rapid increase in demand for outsourced radiology solutions has created challenges as we scale our business and Great Point’s strategic guidance will be of great help,” said Aris CEO Carl Kozlowski.

Aris was founded in 2007 as a partnership between Summa Health System and Akron Radiology, a private practice radiology group.

Great Point Partners is based in Greenwich, Connecticut and focuses on investing in profitable companies across all sectors of healthcare. Great Point has two other companies in its portfolio that outsource services to hospitals: American Surgical, which provides surgical-assistant services, and Biotronic NeuroNetwork, which provides intra-operative neurophysiological monitoring services.

Nationally, the radiology outsourcing field is led by Minnesota-based Virtual Radiologic, which last year bought rival NightHawk Radiology for $170 million. Other national and regional radiology players include Pittsburgh-based Foundation Radiology Group, Alabama-based Optimal Readings, California-based Imaging Advantage and Cleveland-area Radisphere National Radiology Group, which raised a $27.5 million investment round last year.

Most of the national and regional players contract with smaller, community hospitals, whose radiology groups might not have a wide range of expertise in the field’s numerous subspecialties, like muscoskeletal and neuroradiology. And even if the hospitals could find radiologists with a range of subspecialty expertise, they can’t afford to pay several of those subspecialists to be on the clock all day. That’s where teleradiology comes in.

Much of the reason for the rise of teleradiology simply stems from the nature of radiology work. Radiologists can analyze images anytime and anywhere (as long as the technology allows it) because there doesn’t need to be a direct, physical doctor-patient relationship.

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