An old saying has it that where you stand on a particular issue depends on where you sit. In other words, one’s point of view is heavily dependent on one’s frame of reference and milieu.
A case in point: not too many years ago I bought stock in a high flying data storage company that seemed to be unstoppable. The stock price kept climbing and turned my $4 per share investment (cost basis, after splits) into an incredible $100 plus powerhouse. I had visions of retiring to paradise only to ride the stock all the way back down to $10 or so. So do I consider myself lucky that I doubled my investment? Of course not. My perspective is based on what once was.
I learned that an intelligent view toward investing includes an understanding of the fundamentals of the businesses one invests in. Market share, debt load, innovation, etc are all part of that due diligence. As a result I am a more informed investor.
So what does this have to do with outpatient imaging?
If I am opening an imaging center and grow from zero to 25 high end scans per day and my break-even is 10, I might think that imaging is a great growth business. If, on the other hand, I have been running a center whose weekly volume is 200 scans that is now running at 185, the business seems weak and declining and I have a hard time accepting the fact that imaging continues to grow overall when it is clear that my market share is at risk. One person’s upside potential is another person’s downside decline. This is especially important in a market such as ours that continues to grow in the aggregate each year. Success becomes increasingly dependent on the business orientation.
Not too long ago it was considered a given that one could make serious money in the outpatient imaging arena simply by being in the game. Put up a center, offer high end cross sectional imaging and, voila, the patients and dollars rolled in. There was not a lot of talk about market research, competitive analyses, or sophisticated marketing programs. Building lasting “brand equity” was a foreign concept to many in this business.
Fast forward to 2006 and one sees an imaging business increasingly dependent on the basic blocking and tackling and fundamentals associated with a dynamic and hyper-competitive marketplace. To succeed, one needs a branding proposition that creates a real differential, a sales strategy that puts trained people in touch with customers on a constant basis, a customer-centered and patient-friendly environment, metrics to measure the businesses performance, an enthusiastic staff aligned around the mission, responsive radiologists who are committed to quality, and a constant vigilance and sense of urgency that runs throughout the organization.
No more just “showing up.”
Make no mistake, when added to the reality of the pending change in reimbursement brought on by the DRA, this new market reality is going to continue to send shock waves throughout the business. The issue is not “if” the market is going to continue to tighten, shift, metamorphose, or modulate up and down. The issue and question have to do with is it a good thing or is it a bad thing?
The answer to that depends entirely on where you sit.