OIC Strategy: Build, Buy, or Sell

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Recognizing that outpatient imaging revenue is far too important to the bottom line to forfeit the business to aggressive and nimble entrepreneurs, hospitals and health systems have moved aggressively into their communities in recent years with their own outpatient imaging center initiatives. Radiology Business Journal invited executives from several health systems to discuss their strategies in light of the recent economic downturn.

imageScott Black

Scott M. Black, CPA, is vice president of business development, Clarian Health Partners, Indianapolis, Indiana. He was formerly director of suburban facilities for Clarian Health Partners’ two suburban hospitals. He joined Clarian Health Partners in 1998 and served as director of budget and operations.

Before that, Black was with Ernst & Young LLP for 15 years, serving as a senior manager in the health care advisory and assurance practice.

In 1997, Methodist Hospital, Indiana University Hospital, and Riley Hospital for Children (all of Indianapolis) united to become Clarian Health Partners. This is a private, not-for-profit organization, active in teaching and research, that now owns or is affiliated with more than 20 Indiana hospitals and health centers. These include Clarian West Medical Center, Clarian North Medical Center, and Clarian Arnett Hospital, Lafayette. In 2008, the three core hospitals had 56,000 admissions and more than 750,000 outpatient visits.

Kevin Cook became president/COO of Mercy Health Partners–Northeast Region, Scranton, Pennsylvania, on June 15, 2009. Before that, he was COO/vice president of operations at Mercy Hospital Mt Airy, Cincinnati, Ohio, and regional sponsor for radiology services for Mercy Health Partners, Cincinnati.

Previously, Cook was associate administrator, River Region Health System, Vicksburg, Mississippi; director of operations, the Premier Innovation Institute and Texas Medical Institute of Technology, Austin; and Six Sigma™ engineer, Chip Caldwell and Associates, Saint Augustine, Florida. He rose to the rank of major in the US Marine Corps and holds a master’s degree in business from Boston University.

The Northeast Pennsylvania Region of Mercy Health Partners (of which Catholic Healthcare Partners is the parent company) has two hospitals with a total of 300 beds and has a number of outpatient sites that are operated through a series of joint ventures.

imageJohn Couris

John Couris is COO and administrator, Morton Plant North Bay Hospital (New Port Richey, Florida), Morton Plant Mease, BayCare Health System. Before becoming administrator, he was vice president of Morton Plant Mease Health Services, the organization responsible for ambulatory care in the Morton Plant Mease division of BayCare Health System.

Prior to that, Couris was director of operational improvement and managing director of the Radiology Consulting Group, Department of Radiology, at Massachusetts General Hospital, Boston.

BayCare Health System is a not-for-profit organization with 10 hospitals and a total of 2,600 beds. It serves a population of approximately 2.6 million in three counties and operates 12 freestanding imaging centers.

imageRichard Helsper, RT, MBA, CHE

Richard Helsper, RT, MBA, CHE, has been vice president of operations, Clarian Health Partners, Indianapolis, Indiana, since 2003. He became COO of the Midwest Proton Radiotherapy Institute, Bloomington, Indiana, in 2008.

Formerly, he had been director of radiology at Duke University Hospital, Durham, North Carolina, for 11 years. He began working as a radiologic technologist in 1979 and then held leadership positions in West Coast outpatient imaging centers and hospitals.

RBJ: Where does your organization stand with respect to the outpatient imaging market: buy, build, sell, or a combination of all three? Does this represent a departure from strategy in recent years?

Cook: Mercy Medical Imaging has focused on a multifaceted strategy in the marketplace. We have purchased some sites, have upgraded several sites, and are building one more site. The strategy of purchasing outpatient imaging centers is relatively new and has developed over the past two years. We have been involved in joint ventures in the past, but given declines in reimbursement for the joint-venture model, we have aggressively moved into other models of ownership structure.

Couris: Our focus has been on buying; however, we use all three strategies. What will drive this approach is your overall outlook on the market