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Company hopes to take advantage of HCFA rules changes A lease buyout from GE, a growth plan for increasing the daily number of scans at its imaging centers, and a streamlining of inventory have given InSight Health Services healthy results in
Company hopes to take advantage of HCFA rules changes
A lease buyout from GE, a growth plan for increasing the daily number of scans at its imaging centers, and a streamlining of inventory have given InSight Health Services healthy results in its third quarter earnings.
Total revenue for the company's third quarter fiscal 2000 (ending March 31) increased 17% to $47.7 million from $40.8 million in third quarter 1999. Income for the quarter rose to $2 million, compared to income of $525,000 for the same period in 1999--a 279% increase.
InSight provides diagnostic imaging, information, treatment, and related management services in 32 states. Its primary markets are California, the Southwest, Midwest, Northeast, and Southeast. InSight owns or partly owns a combination of independent centers and equipment reserved for mobile routes.
The company's performance is a result of a few new plans, said InSight president Steven Plochocki.
By paying off a GE lease for 36 pieces of MR equipment, InSight reduced expenses by $3 million this quarter. The company hopes that after it pays interest and depreciation on what is now a capital investment this will remain a benefit to the bottom line.
Implementing a plan to tighten appointment schedules, InSight has increased the daily number of scans at its centers across the U.S. In January, company-wide average daily scans were 2110. In February and March, the numbers increased to 2241 and 2295, respectively.
InSight has signed an agreement with medical imaging supplier and maintenance company NHD. Under the agreement, NHD will allow InSight to order supplies through its online managed-inventory program. The $2 million contract will cover film, contrast media, medical imaging equipment, and other supplies.
NHD's system will more carefully track what centers need and provides InSight with one bill instead of several hundred, Plochocki said.
"We are not in the warehousing business. We want to make sure our centers have what they need, but nothing more," he said.
The company will pilot the new system in California and Arizona before it is installed at the rest of its centers.
Acquisitions will continue to fuel the company's growth, according to Plochocki.
This month, InSight Health Services is expected to acquire a 90% interest in a Pennsylvania imaging center that offers high-field MR, open MR, CT, mammography, ultrasound, nuclear medicine, nuclear cardiology, radiography, and fluoroscopy.
As the U.S. Health Care Financing Administration lowers its reimbursement rates to hospitals for outpatient medical procedures, which include medical imaging, InSight plans to aggressively seek partnerships with hospitals and doctors interested in taking advantage of the new rules, Plochocki said.
"We are going to launch a direct sales and marketing campaign to get to the CEOs and chief financial officers of hospitals and talk to them about a relationship," he said.