Mark Kleinschmidt: Brokering a Shared Vision

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When NightHawk Radiology, Coeur d’Alene, Idaho, purchased the business infrastructure of St Paul Radiology in the summer of 2007, the entire industry took notice. In purchasing what is widely acknowledged to be one of radiology’s best business operations, NightHawk also acquired one of its strongest leaders in Mark Kleinschmidt, St Paul’s former CEO and recently named VP of sales for NightHawk. caught up with Kleinschmidt to discover why this marriage was brokered and exactly what it has wrought. With the acquisition of the St Paul Radiology business infrastructure by NightHawk Radiology Services and a subsequent deal in which CML Healthcare acquired ARS, you appear to have set a trend. Why are radiology business offices such attractive assets in this market?

Kleinschmidt: I believe that successful, efficient operators are always going to be attractive. In both cases that you mention, it’s really a case of high-quality radiologists, as well as an efficient, well-run business office, that make the difference. I wouldn’t say it’s the back office alone, but really the combination of those two that makes the practices look worthwhile. As the CEO of St Paul, you played a key role in building the business side of the practice. What was your background before arriving at St Paul, and what were your objectives in taking the job?

Kleinschmidt: I’ve been in radiology for 20 years, since 1988, and most of that time I spent consulting with groups, looking to improve their back offices, if you will, and the whole business side of their practices. I worked with several dozen groups throughout the country over that period of time, and got to understand the nuts and bolts of radiology business operations. That was the background in coming to St Paul. I really wanted to build on St Paul Radiology’s 80-year tradition of providing high-quality radiology services—to maintain, grow, and continue that tradition they had—but also to use technology to begin to improve the efficiency and quality of service provided by St Paul Radiology, and to make St Paul Radiology an innovative leader in radiology. Tell us about the strength and experience of your leadership team.

Kleinschmidt: We’ve always had strong physician leadership. In fact, in the nine years I spent there, there were only two physician leaders during that time, so there was always strong continuity, but also in terms of the business people, the key leaders have all been there a minimum of five years. There’s stability in leadership, along with people who want to be there. Obviously, professionals have options, so these are people who chose to join us and then to stay. What are the key components that make a great radiology business operation?

Kleinschmidt: I think you need strong leadership, and I think you’ve also got to set clear expectations. Everybody needs to understand the goals and to follow them. Then, you need to get out of the way and let them do their jobs. You need people who are detail-oriented, people who have a real can-do attitude about improving what they do, and people who are focused on being as efficient as they can be. There are a handful of sophisticated radiology business offices in the market today. What do you think attracted NightHawk to St Paul?

Kleinschmidt: I think they saw a premier radiology group in St Paul Radiology. St Paul was the largest private practice in the country, at the time, and had always been innovative and entrepreneurial, and that was attractive to NightHawk. There is a demonstrated long-term track record of success, so they had the confidence they were buying into a successful organization. At the end of the day, what cinched the deal is that both organizations had a shared vision of where radiology was going, and that led to the collaboration that we reached now. We are following the same vision; we’ve got the same dream. What is that shared vision?

Kleinschmidt: What we see happening is that radiology continues to become much more complex and sophisticated, and it increasingly requires subspecialty orientation to the delivery of care. Unlike the old days, when the radiologist had to travel to where the exam was performed because it was all analog and film based, now, with technology, we can deliver the exams to where the subspecialty radiologists are. I think that the vision St Paul had, and that