Outpatient Imaging Affiliates: Frank Kyle, President & CEO

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Healthcare providers need look no further than Outpatient Imaging Affiliates (OIA) based in Nashville, Tennessee for an outpatient imaging partner. The company currently operates 14 outpatient imaging centers in nine states, most of which are joint ventures with major teaching hospitals and radiology groups. OIA centers perform 250,000 exams annually with $80 million dollars in revenue under management.

OIA advocates full modality centers. A typical center has one or more MRI scanners, a multi-slice CT and usually several ultrasound, mammography and x-ray suites. When they’ve gotten involved with centers that are single or dual modality, the company quickly expands to encompass the full range of imaging devices, believing that this one-stop approach is a better marketing tool than sticking to a single specialty.

A Diagnostic Imaging Partner for Healthcare Providers

“Our business model is to joint venture outpatient imaging centers with local providers,” says Frank Kyle, President and CEO of OIA. “It’s a fairly simply approach. We form a joint venture, either with a hospital or a radiology group, in some cases with both, that owns and operates the center(s). Our company enters into a long term agreement with each of the joint ventures to manage the centers on a day-to-day basis. We also have a billing division that does the billing and collections work for each of the joint ventures.”

Joint venturing offers a number of benefits for both OIA and the affiliated healthcare group. Partners benefit from the experience OIA brings onboard such as its track record in integrating information systems. The company brings capital to invest, as well as relationships with third party lenders established from years in the business. “We can move quickly, we have an extremely high quality reputation, and we are very focused on providing quality outpatient imaging services,” says Kyle.

Knowing and understanding how to compete in the outpatient arena is a big bonus, as well, and not typically something that already falls within the realm of expertise for most hospitals. “Probably our greatest strength is in building business. We have a very sophisticated sales and marketing product,” Kyle says.  “We’ve got a dedicated team of people who can seize on opportunities as they arise without being disruptive or draining hospital human resources.”

OIA benefits from the association of the organization with a highly reputable health system. Because the company is privately held, they are not under pressure to grow at a certain rate or expand beyond their zone of expertise. Until recently, most of the growth was through the development of new imaging centers. The focus has recently shifted to the acquisition and updating of existing centers. In January of 2009, OIA’s partnership with Thomas Jefferson University Hospital and the Jefferson radiologists in Philadelphia acquired 2 centers, bringing to four the number of centers operated by the joint venture.   These centers operate six MRI units and provide CT, PETCT, Ultrasound, DEXA and X-Ray services.

“We really think this is a great opportunity to look at consolidating markets and picking up centers that are struggling on their own, but with an infusion of equity and an alliance of quality, established local providers, some new life can be breathed into these operations,” says Kyle. “They can then be rebranded. OIA’s experience in marketing, combined with the reputation of a system like Thomas Jefferson and its sub-specialty radiologists, can make all the difference.”

State-of-the Art Technology

“Outpatient imaging is all that we do and we do it very well,” says Kyle. From the onset, OIA has seen that its centers are kept updated in terms of technology, operating at or above community standards. This means a continual process of out-with-the-old and in-with-the-new. In Virginia, for instance, its joint venture with the University of Virginia health system recently replaced an older CT scanner with a new 64-slice scanner.  The Jefferson joint venture in Philadelphia recently expanded and renovated its main center, adding a 1.5t open MR, an extremity MR and replaced its PET scanner with a new PETCT system.

OIA also focuses on maintaining a patient-oriented, quality-first sort of culture. “This is in line with the kinds of partners that we have,” says Kyle.

Building Markets and Creating Sales

“In a business where 80% of your costs are fixed and 20% are variable, you are not going to cost-cut your way to financial prosperity,” says Kyle. So OIA focuses on building market and sales capabilities. “We’ve become much more sophisticated in developing proprietary databases and information that gives our sales and marketing representatives real time access to very detailed referral information in each market. We’ve also instituted a sales management software system throughout our company. We’ve expanded our sales representatives in all of our markets with both full and part-time sales staff and placed a great deal of emphasis on training and education. That’s one area where we’ve put a lot of energy.”

They’ve also had some success in terms of workflow enhancement. OIA has focused on figuring out ways of increasing productivity of equipment and staff through analyzing situations and making modifications to better manage patient flow from beginning to end. “There have been several projects to really get us out of the paper business and into the business of electronic transmission and storage and flow of information,” says Kyle. “All of these things, individually, are not all that stunning, but the cumulative effect has really made a difference.”

A byproduct—a value-added factor—has been that partner hospitals are taking some of the OIA refinements and improvements made in the imaging centers and have transported them over to their own radiology departments in hospitals.

“I think the key message is that we are experienced partners in outpatient imaging joint ventures,” says Kyle. “We have proven time and time again, in situations we’re involved in, to more than hold up our end of the operation. We have a number of partners who would highly recommend us if a hospital or radiology group is looking at expanding their market.”

“This is a tremendous opportunity for existing, established providers to look at consolidating a market. That’s where we can add a tremendous amount of value, and if providers are looking for a company that can serve in that capacity—as a partner, as a manager, as a marketer of these kinds of services—we have highly reputable partners who will vouch for us.”

-by Tracy Million Simmons

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