Kodak Health Imaging reorganizes to emphasize digital, e-health

Holding true to its promise to beef up its digital business without ceding ground in the analog market, Eastman Kodak has reorganized its Health Imaging division to focus more resources on digital imaging and e-health products and services. This move comes on the heels of Kodak's consolidation from seven business units into two groups (consumer and commercial) and mirrors the larger corporate initiative to migrate to a digital environment.

Under the new order, Kodak Health Imaging has consolidated its digital radiography (DR), computed radiography, medical printing, PACS, and RIS businesses into a single business unit called Digital Solutions. The Kodak PARIS division, established in September to facilitate the development of integrated RIS and PACS products (including the former Cemax-Icon product line), will continue to function as a separate entity under the Digital Solutions umbrella.

"The underlying business segments have not changed," said Michael McQuade, president of Kodak Health Imaging and interim chief of the Digital Solutions group. "We are putting an overarching digital structure in place above them."

The new Digital Solutions business encompasses the development and delivery of digital imaging and information products for Kodak Health Imaging as a whole. The strategy is to focus on growth at the individual product level as well as at the bundled product and service solutions level, according to McQuade.

Kodak has been making the transition from a film company to an integrated imaging solutions provider since the 1999 RSNA show. The corporate strategy includes investing in numerous digital technologies and companies and partnering to enter new market niches such as DR, computer-aided diagnostics, and information systems and services. Kodak Health Imaging launched more than 45 new products in 2000, 80% of them digital, and currently derives more than 50% of its business from digital sources. Health Imaging division sales rose 2% to $581 million in 2000, and the firm expects to achieve 6% to 9% growth overall this year, with more than 10% growth in the digital arena.

"Going from a film company to a digital company offers us a lot of sympathy for what our customers are going through," McQuade said. "We still have a core strength in analog, and we need to maintain that base to be prepared for our customers' transition to digital."

The reorganization has also spawned a new e-health initiatives unit that will focus on developing new business models for radiology and related Web services. The latter incorporates AuntMinnie.com, acquired during Kodak's purchase of Lumisys. Phillip Berman, who founded AuntMinnie, has been appointed general manager of the e-health initiatives group and vice president of Health Imaging. Berman will remain as president of AuntMinnie, which will continue to operate as a separate business.

"We see our e-health initiatives going in three different directions: e-commerce, e-presence, and e-services," McQuade said. "Any underlying benefit that will accrue to Kodak (from AuntMinnie) will be on the e-services side, whether sharing infrastructure or best practices."

Kodak has also established a Strategy and Business Development unit and streamlined its geographic business operations, consolidating the five existing regions into two major areas and creating a Global Operations and Customer Satisfaction group. The U.S., Canadian, and Latin American regions now make up the Americas Area, and the European, African, Middle Eastern, Japanese, and Asian regions have been combined into the EPMAR Area.

Rick Cimino, formerly chief marketing officer for Health Imaging, has been named head of the Americas group. Sharon Crino, formerly regional business general manager for Europe and the Middle East, is now head of the EPMAR group.