New Horizons
By Curtis Kauffman-Pickelle

Cheryl Proval

Steve Smith

There is a theme one finds in the writings and musings of the best business leaders that remains consistent no matter what industry, profession, or type of organization. True success, level 5 leaders will tell you, is dependent on the leader’s ability to attract superior talent and exceptional people with which to build and sustain the enterprise. That is to say, that when one surrounds oneself with people who are smarter and more talented than he or she, the organization thrives. This is especially true when the leader empowers these talented team members, then nurtures and challenges them to achieve great accomplishments.

Such is the case not only with large organizations, but is also true with small niche companies dependent on creativity and innovation to visualize and achieve success.

There is no better example of this truism than right here at the Imaging Center Institute. We are entering our third year of operation and we do so with the guidance and direction of the talent and skill of a couple of remarkable executives that I would like to bring to your attention. Each of them has worked with me over the years in other organizations, and I am pleased that they will both now join me in this unique and growing enterprise.

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In the world of Washington politics, health care and health care policy are high stakes and high profile. With today’s skyrocketing federal budget, and burgeoning deficit, the President and Congress are looking for savings.

Health care spending is considered a target-rich environment inside the Beltway. As Congress looks for places to slash Medicare spending, eyes are drawn to the lines on the spreadsheet with big dollars: they’re also looking at categories with high growth.

Diagnostic imaging is both a big number and rapid growth area making it an easy target. Needless to say, Congress noticed. It also recognized something else about diagnostic imaging; compared to physicians in general, hospitals, and the pharmaceutical industry, all of which are well entrenched on Capitol Hill, there are fewer perceived political consequences for taking on imaging.

All of these converging issues place diagnostic imaging in the crosshairs for cuts—big cuts—and, unfortunately, a likely perennial target. Proof of the situation facing imaging is the fact that several bills now in Congress hack imaging, even in light of the massive cuts that took effect January 1, 2007 with the Deficit Reduction Act of 2005 (DRA), legislation that reduced Medicare reimbursement for imaging by $8 billion dollars.

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In the technology-driven field of radiology, it is not just what is installed, but when, where, and why the technology is deployed, according to three experts interviewed by ImagingBiz.com. Many factors drive technology decisions, beginning with the existing competitive environment and inevitably arriving at the Deficit Reduction Act of 2005.

“The most important factor to consider is that technology is not a strategy,” began Kevin Locke, partner, Charis Healthcare, LLC, Hudson, Ohio, a company that specializes in helping hospitals and physicians develop services in the outpatient setting. “Technology is an enabler to allow a strategy to be implemented. In our estimation the strategy needs to be built around market opportunity, strategic objectives, end-in-mind financial objectives, and relationships between physicians, hospitals, and/or other imaging providers.”

One point each expert agreed on is that technology decisions should be predicated on the competitive arena in which a provider is based. But whether a center is new to the market or an established competitor will also impact technology choices, said Richard Townley, MBA, president and CEO, AGI Healthcare Group, San Ramon, Calif, a company that helps hospitals, radiology groups, and imaging center operators reduce costs, improve productivity, and grow revenues.

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Sponored by

Kevin Locke

Tim Stampp,
MBA

Richard Townley, MBA

Paul S. Viviano

When Paul S. Viviano, joined Alliance Imaging in January of 2003, the company was almost exclusively a mobile MRI vendor. Since then, the company’s chairman of the board and CEO has overseen an aggressive diversification strategy, moving the hospital-centric company into fixed-site MRI hospital partnerships, PET/CT, and most recently radiation oncology.

Viviano has a 25-year history in health care administration. Prior to accepting the position with Alliance, Viviano served as president and CEO of USC University Hospital and USC/Norris Comprehensive Cancer Center, Los Angeles, and before that spent 13 years in various positions with the St Joseph Health System after serving as CEO of Long Beach Community Hospital. He holds a Master in Health Administration from UCLA. Viviano recently shared his thoughts on the leadership with ImagingBiz.com.

ImagingBiz.com: Going into 2008, what are the transformative leadership issues for imaging company executives? What do these times demand of leaders?

Viviano: It’s a challenging time. As we look to ‘08, we see continued challenges for the industry. A number of forces are going to continue next year: pressure on reimbursement, utilization management pressure on advanced diagnostic procedures, and an excess supply of providers in many markets. All of those translate into a lot of pressure on all of us who provide imaging services to patients. So I think these times demand clear strategy, a devotion to high quality patient care, to serving the needs of patients from a service standpoint. All of those are going to be essential to maneuver through this very difficult time that lies ahead of us.

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While McCormick Place hummed with science and commerce across town, an unusual gathering of top outpatient imaging center executives met for breakfast on the sixth floor of Chicago’s University Club on Tuesday, November 20. Adding to the unparalleled nature of the event were the invited guest speakers for the morning, two top executives from rival radiology benefits management (RBM) companies. Called by Joe McDonough, CEO of Soteria Imaging, and underwritten by another guest, Don Broomfield, president, Hitachi Medical Systems America, Twinsburg, Ohio, the meeting represented an historic gathering of top executives from some of the nation’s leading imaging center chains.

“With the DRA pinching everyone in our industry, it has forced a mentality of ‘coop-etition’ among those who historically have been competitors to find out together how we can meet the obstacles that have been put in front of us.”
—Gary Albers, division president, Soteria Imaging, Louisville, Ky

“We see these people as being successful ultimately in spite of the Deficit Reduction Act and thought it was a good opportunity to get everyone together, understand some of the common challenges to all in the imaging space, and to try and figure out ways with which we can overcome them,” Albers explained.

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Jerry Sokol, JD

Increased imaging center transactional activity, changes in health care regulatory law, increased scrutiny of self referral, and a full year under the Deficit Reduction Act (DRA) conspired for a lively roundtable discussion at the 2007 Medical Imaging Symposium, sponsored by the law firm of McDermott, Will & Emory on November 27 in Chicago.

“The confluence of these events—DRA, increased transactional activity, multiple changes in the laws—have really led to exciting yet very interesting times
in the medical imaging industry.”
—Jerry J. Sokol, JD, partner, McDermott Will & Emery LLC, Miami, Fla

The program grew from a half day in 2006 to a full day this year, primarily due to the increased transactional activity in the imaging center industry, Sokol said. “When we first contemplated putting this program on, we wanted to have an M&A focus, we wanted to discuss deals, but quite frankly, last year, deals had come to a virtual standstill in light of people’s concerns about the impact of DRA,” Sokol noted. “Because the impact of DRA is being absorbed by the industry, we are clearly seeing this increase in transactional activity that led us to incorporate a number of M & A and transactional topics throughout the day.”

This year, as last, the program began with a roundtable discussion moderated by Ira Coleman, JD, managing partner of MWE’s Miami office, featuring Robert V. Baumgartner, CEO, Centers for Diagnostic Imaging (CDI), Minneapolis, Minn, Howard G. Berger, MD, CEO, Primedix Health Systems, which operates Los Angeles-based RadNet Management, and Paul S. Viviano, chairman of the board and CEO, Alliance ImagingViviano

The ensuing discussion revealed that it has been a busy year for all three gentlemen, as each company responded to the DRA and worked their respective strategies in a rapidly evolving marketplace.

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Structuring Imaging Ventures
in Today's Regulatory Climate
By Richard W. Townley, MBA

Over the past 15 years, outpatient imaging has been subject to high growth rates. Because this has been particularly true of the more profitable high-end imaging services, this growth has attracted attention from all quarters. For the first 10 of those 15 high-growth years, outpatient imaging was most often provided by hospitals or by radiologists; they made high-end imaging available as part of multi-modality imaging services.

Over the past 5 years, however, clinicians have increasingly become active participants in the provision of the high-end outpatient imaging services that are ancillary to their specialties. Conflict between clinicians and radiologists/hospitals has often been the result. Where the provision of high-end outpatient imaging services is concerned, collaboration has been seen far less frequently.

The challenges made to clinicians’ involvement in outpatient imaging, to date, have been primarily regulatory and financial, with barriers erected by commercial payors growing in some regions. Nearly every imaging provider has been affected by decreasing Medicare and commercial payments; in response, providers are trying to cut costs, improve productivity, and increase procedural volumes.

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Richard Townley, MBA

WSJ: Recognizing the Tell-tale Signs of Flawed CEOs

An article in the December 1, 2007 edition of the Wall Street Journal notes that hindsight is 20/20 when spotting a flawed CEO. The key is to avoid the hire to begin with, and the article offered a list of caveats for identifying a flawed candidate, as well as hiring tips. Candidates to avoid include those with a passion for money, power, and prestige and a habit of putting personal success above that of the company. Also beware of those with a penchant for grand strategies but no thought to implementation. On the other hand, avoid those with a fondness for rules and numbers that outweighs a broader vision. Inconsiderate acts, unilateral decision-making, and bad listening skills are also warning signs.

The article recommends carefully investigating through background checks the candidate’s integrity and interpersonal skills, as well as determining how much of their success was dependent on favorable economic and industry conditions. It also advised presenting all finalists with a job preview that highlights the differences between the candidate’s current position and the CEO position.

WSJ Recommended Reading
Getting the Right People at the Top
Strategic Thinking at the Top
The Silent Killers of Strategy Implementation and Learning

Bob Maier

This is the time of year when visions of sugarplums are fresh in our heads from the RSNA, and we like to reminisce about days gone by when radiologists and hospitals were friends and worked together in harmony for the good of the patient and the well being of the radiologist. Now, that is not to say that somewhere in our fair land things are not copasetic and that goals are not aligned. But I haven’t seen it lately.

Somewhere in the recent past and in many places in the country, the situation has changed: that relationship has turned antagonistic and the hospital/radiologist relationship is in jeopardy. As a resource, we are more often called upon to assist in changing this dynamic, to act as a reconciler of differences that run deep, so much so that hospitals are often on the verge of terminating contracts and radiologists are fed up with the way they have been treated and would just as soon walk away.

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