Last month, peripatetic CEO Joseph J. McDonough returned to imaging after a 5-year hiatus, this time as CEO of Soteria Imaging Services, Louisville, Ky, with a mandate to grow. His last imaging stint was as CEO of International Radiology Group/American Imaging Management, Dallas, Texas, and since then he has served as CEO of home health care company Reliant Holdings Inc, Norcross, Ga, a custom mobility company. He next launched an internet startup that provides products and services to private schools before accepting the top job at Soteria, a privately held company owned by the Bob Jones family and Carousel Capital, Charlotte, NC. Founded in 1992, Soteria Imaging Services operates 19 imaging centers in 10 states, so far eschewing the saturated markets and first-tier cities for places like Omaha, Nebraska, Champaign, Ill, and Eau Claire, Wis. You will not find the name Soteria—Greek for salvation—anywhere in the 10 states the company operates, except, of course, at the corporate headquarters in Kentucky, a state in which Soteria operates 3 imaging centers. ImagingBiz.com caught up with McDonough just three weeks after he had taken the helm of Soteria to discuss leadership challenges, objectives, and plans for the future.
ImagingBiz.com: As the new CEO of one of the nation’s largest imaging center chains, what are the first action points on your agenda?
McDONOUGH: For the next few months, we will spend our time on two primary objectives. First and foremost is making sure that the operating platform of the company is structured appropriately for future significant growth. And along with that is the IT infrastructure of the company, the operating procedures of the company. From the past three weeks of analysis, all of that appears to me to be very strong for the size that they are today. We need to make sure that the systems that are in place can support greater and significant growth, so that is the first objective. The second objective is to build or create a growth formula that will probably have several elements to it, but a formula that we can replicate consistently and quickly. So we are working on all of those elements now.
ImagingBiz.com: Would you like to share any specifics on the growth strategy?
McDONOUGH: The Soteria management team that existed before I came onto the scene really needs to be applauded for having done such a great job of anticipating the change and restructuring the company with regard to operating efficiency to be able to withstand the DRA adjustment and to position itself to be as strong as it is today. Soteria would not have anywhere near the growth potential that it does if the management team had not prepared itself the way that it did. If you look across the imaging landscape today, you are already starting to see signs of imaging companies that are feeling the negative effects and trying to react to those effects and I firmly believe that over the next 12 to 18 months you are going to see more and more imaging companies that didn’t adjust quickly enough and will have a very tough time working their way out of it.
So with that, it is too early to give you any great detail about the growth of Soteria, but I will give you a couple of broad brush-strokes. First and foremost, I believe we have significant opportunity to expand the company’s presence in the markets we are already in and that has to do with increasing the relationships with the referring physicians that we work with now and enhancing some of the modalities that are already in place, that will be one of the first and key aspects of our growth plan. The second, in reference to the remarks about the DRA, we believe there will be opportunities for us in this market either in contiguous markets to where we already are or new markets that we feel strategically fit our profile, and that we will have opportunities to either replace or acquire imaging assets in the market as a result of owners and operators not appropriately adjusting to reimbursement changes.
ImagingBiz.Com: What was your last position in imaging and how has imaging changed since you left?
McDONOUGH: I joined International Radiology Group (IRG) as their CEO in 1999 and that was at the time a turnaround. Within 18 months, we acquired American Imaging Management (AIM) out of Chicago. IRG was headquartered in Dallas, and at the time we acquired AIM, and it was one of the three largest radiology business management companies in the country. At the time they had