Strategic Radiology Snags Kleinschmidt for CEO Spot

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Mega-group Strategic Radiology has hired Mark J. Kleinschmidt as CEO of the consortium of 15 practices representing more than 890 radiologists. Kleinschmidt most recently served as CEO of St Paul Radiology, Minneapolis, and senior VP of business services at NightHawk Radiology. Van Moore, MD, chairman of SR and president of Charlotte Radiology, said the hire was the result of good timing. “Mark became available in looking for an affiliation, and several of the SR practice executives have known him for a while,” notes Van Moore. “He’s a good fit. His experience with a large group like St Paul Radiology, and his extensive radiology background will serve SR well.” As he assumes the top non-physician executive spot at SR, Kleinschmidt emphasizes that the primary objective of the organization is to develop ideas that will further the independence of the private practice. “We are not trying to be competitive,” he asserts. “We are doing what is good for radiology and good for radiologists.” ImagingBiz: What are your immediate objectives? Kleinschmidt: The first is to identify the common ground that all 15 groups can agree upon and really make sure that we focus on activities that provide a benefit to the groups. First and foremost, from an overarching standpoint, we are really there to help preserve the independence of the private practice of radiology. That is the overall objective of the organization: To do things that will further that independence. ImagingBiz: What have you learned in your most recent engagements at St Paul Radiology and NightHawk that will be helpful in this current position? Kleinschmidt: One thing that’s clear is that in my 22 years in radiology, I’ve never seen as much uncertainty as exists today. I think there is a general agreement that a business model that has significant amounts of income coming from the imaging center side of the practice [is not] in many people’s plans going forward. The question is, how does radiology respond proactively to all of the changes going on rather than let the market dictate and then have to respond? One of the things that SR wants to do is get ahead of the curve, and really help to define that path going forward. In a large group representing more than 800 radiologists, there is an opportunity to do something that would be difficult to do on a small scale. ImagingBiz: Will you be building a business model? Kleinschmidt: First of all, there is a universal belief that one of the things that could occur with health care reform is that payment for medical services may be differentiated based upon some metric of quality. People pay more for things of higher quality. In health care, we have never done that, but there is a sense that times have changed and that is going to happen. So it is important for SR members to develop and measure certain metrics that will define quality. The data that is available from these large groups will help us be able to do that. We then can go to the people who pay the bills and say, “Here is a way to measure and demonstrate quality.” We think that is something that should be done by radiologists, not to radiologists, and that is going to be a primary goal of SR, to define those metrics, measure, and report on them. That is something that has never been done on a large scale. SR also wants to use technology to increase the productivity and efficiency of radiologists to help offset some of the changes that are going on with imaging centers and other developments in their practices. That can free up time to spend building the clinical side of their practice and engaging in the relationship-building that radiologists need to continue to work on. We are really looking at how to efficiently distribute workflow, so something that helps distribute cases to the right person at the right time. Our preference would be to utilize what is out there if it works, but if not, we may have to invest some into putting those pieces together. ImagingBiz: What do you anticipate to be your primary sources of revenue? Kleinschmidt: I don’t think that the business model today contemplates merging of practices or anything like that at all. We aren’t talking about consolidation, we are talking about how to get 15 groups to collaborate with each other. It is less about creating a big business out of this, but rather providing resources to the groups to help them become more productive and efficient. There isn’t the kind of traditional business-building model; it’s really about helping the groups to become better in ways that would be more difficult for them to do on their own. ImagingBiz: Many large practices have moved from traditional democratic governance to corporate governance. Do you have a vision for SR governance? Kleinschmidt: I think we will certainly welcome some participation along the way from all of the member groups, but like most radiology practices, I think there will be a more streamlined approach to how decisions get made. The desire for streamlined decision-making needs to be balanced with the traditional philosophy that radiology groups have had about broad democratic governance within their groups. We are trying to figure out how best to balance those, but I think it is safe to say that we are committed to a more streamlined approach that allows us to make more nimble business decisions. ImagingBiz: Is growing the number of member groups an objective? Kleinschmidt: We are not looking to add groups right now. We really want to finish figuring out what we want to be, look at where we are, and then decide whether or not it makes sense to add additional members. That’s not an essential part of any strategy that we have but it is something we would look at if it makes sense for the current members of SR, as well as the groups that are interested in joining. We have had a number of groups ask us if we would consider adding them at this time. We haven’t said we are not interested, but we have said not right now. We need to figure out who we are and what we want to do before we take that next step.