Technicare MRI manager takes high Summit slot

John P. Heinrich is back in the MRI business, although indirectly.The former vice president of MRI at Johnson & Johnson's defunctTechnicare subsidiary was appointed president and COO of SummitWorld Trade in December. Summit, based in Hudson, OH, is a minoritypartner with Hitachi in that Japanese medical imaging vendor'sU.S. MRI and ultrasound subsidiary, Hitachi Medical Systems ofAmerica.

E. Michael House has shed president from his title but remainschairman and CEO. House and William Miller, both executive vicepresidents at J&J's medical imaging subsidiary, led a groupof former Technicare executives in founding Summit five yearsago (SCAN 9/02/87). The firm started out in a sales representativerole for medical imaging firms such as Sopha, ISG, Hologic andTrionix.

Heinrich moved to Summit in 1990 following a stretch as U.S. presidentof lithotripsy vendor Technomed. He rejoined his Technicare colleaguesafter the downturn in lithotripsy market prospects. Much of thefirst year was spent planning for Summit's future, Heinrich toldSCAN.

"Mike House and I spent a lot of time thinking about howthe company ought to be organized and managed," he said.

Summit World Trade has grown over the past five years from abouta dozen employees to over 200. The firm has six other businesses,apart from HMSA. These include:

• Summit Nuclear, a supplier of nuclear medicine camerasand nuclear computer products;

• Summit Labs, a product development laboratory;

• SRT, a site-preparation company for MRI and other applications;

• Summit Credit, an in-house finance organization;

• a start-up business providing cockpit printers and otheravionics equipment; and

• a joint-venture in hospital infectious waste recycling.

"The Summit story over its first five years has been a remarkableone. We have established relationships with some world-class companieswith tremendous success. My responsibility is to build on thosesuccesses and keep Summit on the path of growth," Heinrichsaid. "It gets tougher as you get bigger. You can't sneakup on people the way we did in the first few years. We have assembleda remarkably skilled team and have the opportunity to continueto grow the company not only in diagnostic imaging but other areasas well."

Summit no longer maintains sales representative relationshipsin medical imaging, because of both the Hitachi connection andits own evolution as a product supplier. The company will undertakesales representation again in new ventures, however. It has proveda successful strategy for entering new markets, he said.

With the help of an expanding Hitachi relationship, Summit hasmoved into product development and manufacturing over the lastfew years. Its largest solely owned business is Summit Nuclear.Summit picked up this nuclear medicine business from Raytheon,when that firm exited medical imaging three years ago (SCAN 10/12/88).

Raytheon distributed Hitachi nuclear equipment. Summit maintainedand built on the Hitachi OEM supply relationship, introducingits own Vision nuclear workstation last year on an IBM R/S 6000hardware platform (SCAN 7/03/91).

Hitachi is licensed to sell the Summit software and peripheralsin international markets. It buys the IBM workstation in Japanand adds the Summit medical imaging software and hardware. TheVision product combined with Hitachi-built cameras has helpedimprove Hitachi's position in the Japanese nuclear medicine market,Heinrich told SCAN at the Society of Nuclear Medicine meetingin Los Angeles last month.

Summit Nuclear has refined Vision software over the last year,improving the system's ability to connect to other nuclear imagingcameras, he said.

"This is for people who have a full complement of camerasand need to buy a computer to tie their department together. Weare now delivering interfaces to virtually every competitive camera,"Heinrich said.

Initially, Summit acquired only the equipment service businessfrom Raytheon.

"We were interested in getting into the service end of nuclearmedicine equipment, so we bought the assets of the service partof Raytheon. Then Hitachi approached us and asked if we wouldbe willing to distribute their cameras," Heinrich said. "Thiswas a gutsy move, given the fact that at the time, Summit wasinvolved with Sopha and Trionix. To assume we could simultaneouslyrepresent three companies in nuclear medicine was a fairly boldcall."

The HMSA venture was started three years ago as a vehicle to introduceHitachi's permanent magnet MRI systems in the U.S. This efforthas proved successful, with a U.S. installed base approaching100 systems, Heinrich said. HMSA announced late last year thatit would bring mid- and high-field superconductive MRI systemsto the U.S. in 1992 (SCAN 11/20/91).

Summit is not Hitachi's only medical imaging partner. Philipsand Hitachi operate a CT manufacturing business in the U.S. (seestory, page one). Mitsubishi also runs a U.S. dealer network thatsells mid- and low-end Hitachi ultrasound systems. HMSA createda direct sales group to handle high-end ultrasound two years ago(SCAN 10/24/90).

"The Hitachi relationship gives us great credibility,"Heinrich said. "This is a partner that is increasingly viewedas a major participant in the worldwide diagnostic imaging market,although they have not been terribly strong in the U.S. untilnow. The strength we bring is our ability to do marketing andsales."

ALTHOUGH HEINRICH DOES NOT have direct operational responsibilitiesin the HMSA effort, he maintains a keen interest in MRI technologyand markets. Hitachi's progress with mid-field (0.2- and 0.3-tesla)MRI in the U.S. has benefited from trends that were becoming apparentback in the Technicare days, he said.

"As far back as 1985 at Technicare, we were talking aboutwhat we loosely called the community hospital system. Everyoneknew early on that you would have to be able to offer the communityhospital and private marketplace improved economics if the MRmarket was to continue to grow," Heinrich said.

Technicare studied permanent magnet technology through its magnetcompany Magnetic Corporation of America, he said. The companywas close to providing a competitive capability for permanentmagnet MRI, but the technology had not evolved far enough whenJ&J decided to shut Technicare down.

"It was really only with the development of new permanentmagnet materials, coming principally from Sumitomo in Japan, thatit became economically possible to produce a competitive permanentmagnet system," Heinrich said. Sumitomo supplies magnet materialsto Hitachi.

The U.S. MRI market has grown tremendously competitive over thelast several years, he said. Users are concerned about state andfederal regulations concerning reimbursement and other economicissues in MRI. Nevertheless, high-field systems continue to holda big piece of the U.S. market.

"We see the market divided roughly in half: mid-field versushigh-field. We see ourselves capturing about a 33% share of themid-field market," Heinrich said.

BRIEFLY NOTED:

• Siemens Medical has made severalchanges to its nuclear medicine division, headquartered in HoffmanEstates, IL. Billy D. Nobles was named vice president and generalmanager earlier this year.

Nobles transferred from Siemens' Pelton & Crane dental x-raybusiness out of Charlotte, NC, where he served as vice presidentof sales and marketing. Nobles has prior experience in nuclearmedicine, having worked in this Siemens division following thepurchase of Searle's nuclear business.

Jerry Gibson, former Siemens ultrasound division manager, hasalso returned to the nuclear business, as western area manager.This follows the merger of Siemens' ultrasound businesses intoSiemens Quantum. Nobles' predecessor, David J. Archibald, hasbeen reassigned as central area manager for the nuclear medicinedivision.

• Richard P. Kusserow announced last month that he willretire as inspector general of the U.S. Department of Health andHuman Services for a position in the private sector.

Kusserow, who served as the nation's chief investigator of health-carefraud and inefficiency for 11 years, will join Strategic ManagementAssociates, a Washington, DC, management consulting firm. He willconcentrate on health-care reform issues, as well as abuse, integrityand management problems.

Criminal convictions of individuals involved in fraud and abuseof HHS programs rose from 165 in 1981, Kusserow's first year,to over 1400 in 1991. The OIG also increased the dollar amountrecorded in fines, savings, restitutions and recoveries from $166million to almost $7 billion last year.