Center acquisitions putter along

August 12, 1992

New imaging center acquisitions are running at a subdued pace,according to Terrance Gill, president of Medical Ventures in SolanaBeach, CA. Parent company of the nonprofit Cooperative MRI organization,Medical Ventures lined up private capital to back a

New imaging center acquisitions are running at a subdued pace,according to Terrance Gill, president of Medical Ventures in SolanaBeach, CA. Parent company of the nonprofit Cooperative MRI organization,Medical Ventures lined up private capital to back a center acquisitiondrive earlier this year (SCAN 2/11/92).

Compared to developing new imaging centers, however, acquisitionsare positively fruitful.

"All of us who are opening centers are seeing volumesthat are less than we had hoped. New centers are bucking establishedreferral patterns and will have more of a challenge," Gilltold SCAN.

Doctors aren't eager to help fund new centers. Virtually allthe funds available now are going to acquisitions, he said.

"Until the acquisition play is over, only the biggestof the players will be developing new centers," he said.

Hospitals continue to be active in center development andacquisition despite possible threats from the federal safe harborrules, he said.

"Believe it or not, many of the hospitals are just ignoringit," Gill said. "Their attorneys must be telling themit doesn't matter. Until somebody gets crucified, they are goingto listen to their attorneys. There is supposedly an (impending)IRS announcement that the IRS will not start looking at problemsuntil after Labor Day. But a lot of hospitals are concerned andare taking actions to get their act together."

There hasn't been a fire sale from physicians attempting toexit center partnerships, Gill said. Entrepreneurs are findingbusiness opportunities, but at a price.

"Buyers that try to low-ball the purchase price jeopardizefuture patient referrals. They need to give the doctors a nicefee so everyone's a winner. But you have to be a public-held stockor you have to have a ton of cash to do it."