Chris Winkle: Taking MedQuest In-House

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Last August, the news that Novant Health, Inc, Winston-Salem, NC, had offered $45 million (with an additional performance-based contingency of $35 million and the assumption of all outstanding debt) for Alpharetta, Ga-based MedQuest set the outpatient imaging world abuzz. The deal, which closed in November, represented what many considered a premium price for MedQuest’s 92 outpatient imaging centers and gave Novant a huge and immediate presence in outpatient imaging in the Southeast.

Two years earlier and fresh from an ordeal in which he brought long-term care provider Mariner Health Care, Atlanta, out of Chapter 11 and negotiated the successful sale of that company, Chris Winkle had come on as CEO to turn around MedQuest. The sale to Novant behind him and the Deficit Reduction Act (DRA) notwithstanding, Winkle is looking forward to enjoying life under the Novant umbrella.

"The Mariner turnaround was like living in dog years: the outcome was great, but it wasn't much fun on a day-to-day basis. Having seen the good, the bad, and the ugly in health care, it's really gratifying to have a solid organization such as Novant as our owner. You can see the big picture. They are the kind of organization that when they talk about a 10-year vision, you know they are going to live it and fulfill it."
— Chris Winkle, CEO, MedQuest

Winkle agreed to share his experiences to date with the readers of Tell us about life under Novant Health since it purchased MedQuest’s 92 imaging centers in August of last year. How has your job changed?

Winkle: The deal didn’t close until November. To date, my job really hasn’t changed. There is an earn-out period during 2008, and as such, my job has not changed in the short term. At this point, I do not expect it to change in the long term, either. Health systems have recognized the importance of outpatient imaging to hospital revenue and are taking steps to be more competitive. From the perspective of someone who has been on both sides, what are the advantages of being under the hospital umbrella?

Winkle: First of all, I like being part of a larger organization. We are now a part of a larger health care strategy: delivering remarkable patient care to the numerous communities Novant serves. Whether it be with physicians or different services, we are developing more relationships and are a part of a broader approach to community service. Perhaps the largest advantage of the transaction is that now we are part of a large not-for-profit system that clearly has a mission to service its communities, as opposed to operating as a single business line that is being held as an investment. From the same perspective, can you comment on the well-known competitive disadvantages of the hospital environment, such as the layers of bureaucracy, slower reaction times, and the lack of incentive-based compensation plans?

Winkle: It’s probably too early to comment on that because we are not very integrated, but I will tell you that I have nothing but positive things to say about the Novant organization, to this point. It is a large organization, and I know that many large organizations are associated with bureaucracy, but I haven’t seen it here, nor do I expect to. What is the chain of command in the management of the centers and reporting to hospital personnel? Who are the key members of the hospital management team, and what resources do they bring to the enterprise?

Winkle: Nothing has changed there. We are a wholly owned for-profit subsidiary, so nothing has changed. We have interaction with the ownership, being part of a larger system, but nothing has changed. Freestanding imaging centers historically have had a clear advantage over hospital-based centers in most aspects of customer service. Have you taken any steps to maintain that competitive edge, and if so, what were they?

Winkle: Clearly, MedQuest’s customer service was something that Novant was aware of in the markets we interacted in before the transaction. They felt that we were everything that we always said we were from a customer service perspective. They looked at that as one of the key values that we brought to the table, so they in no way, shape, or form want to do anything that would weaken our customer service. I really think that if I said doing this or that affected customer service, it would get their attention. Customer