Diagnostic Imaging Group
Visual Imaging
Written by Amanda Gaines   
Saturday, 01 September 2007
Diagnostic Imaging Group - Health Executive - RedCoat Publishing
Fred Tylutki explains how this imaging company continues to grow as many in the industry disappear.
In 2005, after a vigorous search for a fiscally responsible way to expand, New York-based Diagnostic Imaging Group partnered with private equity firm Evercore Partners. After solidifying the relationship and fusing the necessary capital, the group acquired its Florida-based sister company, Signet Diagnostic Imaging Services.

Diagnostic Imaging Group - Health Executive - RedCoat Publishing
Fred Tylutki, CFO
Between 1999 and 2007, Diagnostic Imaging Group grew from seven centers in New York to 38 centers in New York, New Jersey, and Florida. Much of that growth came from smaller versions of the Signet acquisition, a few new strategically placed centers in New York, and a smaller
acquisition-based expansion into New Jersey.

Although the company was at times challenged because of such extreme growth, the systems and procedures developed throughout its 22-year history gave it the strength it needed to bring those centers into the Diagnostic Imaging family. “We were already the dominant player in Brooklyn and Queens, and adding Signet’s 15 centers only strengthened our position in Florida,” said CFO Fred Tylutki. “Because we have a strong IT base and managerial structure, the acquisitions reduced our new centers’ expenses, eliminated many duplicate services, and increased efficiencies while strengthening our top-line growth.”

Creating efficiencies
The vision of Diagnostic Imaging’s founder Dr. Leena Doshi continues to be the company’s main strength today. Each imaging center maintains a multi-modality focus, offering CT, MRI, mammography, X-ray, echocardiogram, and vascular imaging services. To maintain high quality service across each service line, the company has always kept its finger on the pulse of technology.

In 1997, the group’s New York locations, also known as Doshi Diagnostic Imaging Services, were beta test sites for the Eastman Kodak Company’s PACS. As one of the first in the state to have the technology, the company was comfortable electronically sharing films long before many of its competitors. Therefore, bringing the technology into the centers in Florida and New Jersey was practically seamless.

“Many of the acquired centers had radiology technologies, but they could only read the images done at their specific center,” Tylutki said. “We can shift films around electronically to any of our centers, which saves us time and money. Without PACS, we would need at least eight more radiologists within our system.”

Diagnostic Imaging Group also uses an EMR-type system by Sage Software, known as Intergy in the company’s New York centers and Medical Manager in its New Jersey and Florida centers. The system handles patient scheduling, insurance verification, billing, and finance, as well as enhancing the company’s ability to maintain a balanced level of quality across all 38 centers.

“The system can track how many patients do or don’t show up each day, whether they were contacted the day before to confirm, and the daily revenue of each center,” Tylutki said. “We look at those reports daily so we can analyze what’s happening at any center if we think there’s a problem.” In addition to investing in technologies to create efficiencies, Diagnostic Imaging started outsourcing some of its back-end operations, starting with its transcriptions. The company’s computerized dictation system transfers physician notes into an electronic file that are transferred to India, typed overnight, and relayed back to the center. The practice began at the company’s New York locations, where transcription services can be difficult to find.

“We brought that service to our Florida centers when we acquired Signet and into our New Jersey locations when they opened in April 2006,” Tylutki said. “Today, all of our reports are done within 24 hours of a patient’s visit.” The company has also started outsourcing some of its billing functions to Guyana and India in an effort to reduce costs.

Strength in numbers
With the advent of the Deficit Reduction Act, many imaging centers have closed down, and the industry has started consolidating its imaging services. What left many competitors in the lurch actually strengthened Diagnostic Imaging, as the struggle to find qualified radiologists and nuclear technicians eased. Tylutki believes the DRA impacted the competition more than his company because of its reliance on MRI revenues. “On the average, 60% of our competition’s revenues came from MRI services,” he said. “Ours was only 31%.”

Additionally, the DRA led to substantial cuts in Medicare reimbursements. On average, most imaging centers received between 24% and 30% of their revenues from Medicare. Diagnostic Imaging’s percentage is currently only 11%.

Tylutki also attributes the company’s success to its attention to Medicare and insurance company requirements for the number of modalities each center carries. Many regional carriers require a minimum of five modalities, and, according to Tylutki, Blue Cross Blue Shield has discussed implementing a similar policy nationwide. In addition, Medicare and insurance companies are stringent about the age of equipment.

“The multi-modality requirement would be great for us because that fits into our existing model,” he said. “In the realm of technology, we’ve replaced most of our nuclear cameras and CTs with new versions, moved from analog mammography to digital, and added CAD to help improve the timeliness of our diagnosis. We’ve also replaced most of our analog X-ray systems with digital, which has reduced our X-ray turnaround from 35 minutes to four minutes per patient.”

Although the investments are primarily to keep the company in good standing with regulatory requirements, Tylutki was quick to point out the added bonus of increased patient volumes. In 2005, Diagnostic Imaging’s New York locations averaged 2,256 procedures per day. Today, that number is at 3,188. Between 2006 and 2007, Florida’s numbers increased from 7,587 per day to 9,943.

While those numbers have a nice capital impact, Tylutki said Diagnostic Imaging continues to adhere to the philosophy set in place by its founder 22 years ago. “The Doshi family is extremely hands on and knows many of the company’s employees personally,” he said. “We are a family-oriented company, and I believe employee satisfaction shows in the quality of work coming out of our centers.”
 
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