Touchstone Medical Imaging: Putting People First

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Touchstone Medical Imaging is a privately held provider of diagnostic imaging services headquartered in Brentwood, Tenn. Founded with two partners in 1991 by Christian C. “Pat” Rice, Jr, partner and CEO, Touchstone operates 17 imaging centers in seven states: Texas, Colorado, Tennessee, Maryland, Arkansas, Illinois, and Nebraska.

Prior to founding Touchstone, Rice was a partner with Deloitte & Touche Management Consulting in Stamford, Conn. He has served in various development and management positions in the health care industry, including that of CFO of the Medical College of Virginia. Rice agreed to share his management philosophy and thoughts on the outpatient imaging marketplace with the readers of To what do you attribute Touchstone’s continuing success in the outpatient arena, especially in light of the tough reimbursementmarketplace after the Deficit Reduction Act (DRA)?

Rice: We showed a little bit of foresight in trying to get in front of DRA, rather than waiting for it to happen. Kevin Cross (a partner and COO) and I decided to operate as if DRA were going to take place in October of 2006. We had meetings with our corporate and regional people and got the whole team involved. It looked like DRA was coming, and if it didn’t, it would be a bit of a bonus, so we went to all of our vendors and renegotiated contracts and made operational and personnel changes. We thought we covered 75% of the shortfall of the DRA through expense reductions, reallocation of resources, and other tactics. We are fortunate in that we are not in some of the higher Medicare utilization states, such as Florida and the Northeast, so our Medicare load is proportionate; it’s not the majority of our business.

The other thing we did was continue with all of our growth plans: We added second magnets at a couple of our centers, and we expanded our offerings with additional modalities, so it was a two-pronged attack. We drove revenue at the same time that we reduced expenses. Fortunately, we have a very good team that was able to make these things happen.

“We say, ‘Operations drive finance, finance doesn’t drive operations.’ Then, we say, ‘People drive operations.’ We have a good team of people who make it happen.”
—Christian C. “Pat” Rice, CEO Touchstone Medical Imaging Can you tell us a little bit about your management team and the style with which you lead the organization? Are your center managers empowered to run their respective operations?

Rice: Philosophically, we try to look at the center managers as if they were the general managers of the business. We try to empower them, and we work very closely with them: I think they all feel free to call any of the senior management team to say, “Hey, I’ve got a problem with something,” or, “I need help with something,” or “I need to talk about something.” We try to keep the lines of communication open. Yes, we try to empower the managers so that they look at a center almost as if it were their business. You have historically invested in building a professional sales/marketing team to represent your centers. Has this made a significant difference in Touchstone’s growth in a competitive environment?

Rice: Yes, it has, and the whole key is the professional sales team. Our definition of a professional salesperson is not just someone who knows the markets and the doctors, but also knows the operations of the centers, knows what insurances you take, knows what the requirements are for referrals, knows how your scheduling works, and knows all the considerations internally, so the salesperson can be the expediter, if you will, between the office and the center to make sure everything works well. When they go out to the field, they have something to offer, rather than just asking for something. They are problem solvers. How would you describe your corporate culture, and how did you build it?

Rice: When we have our annual meetings, we go through the objectives of the company for the year, and among the objectives that we always include are providing a work environment that encourages communications, teamwork, optimism, and advancement for overachievers. Those are our objectives, and we share those. We also try to give them an idea of where the company is going and how we look at things. We talk about creating an operationally and financially strong company focused on quality, staying the course, and playing