Insight Imaging Emerges from Chapter 11, Ready to Buy
Insight Health Services Holdings Corp., a provider of fixed-site and mobile diagnostic imaging services under the Insight Imaging name, late last week announced its emergence from Chapter 11 restructuring, thereby eliminating nearly $300 million of long-term debt. A new, $17.5 million revolving credit facility with Healthcare Finance Group will be used to provide working capital for ongoing operations. Kip Hallman, Insight’s president and CEO, spoke with imagingBiz about the restructuring and the company’s plans for the future. ImagingBiz: There is currently a lot of M & A activity occurring in the industry. Does Insight Imaging plan to participate as a buyer or a seller? Hallman: We expect to be primarily a buyer in both the short and long term. Our plan is to focus on markets where we have built or can build a meaningful presence. We currently are in active discussions to acquire a number of freestanding centers that fit this focus. ImagingBiz: Insight Imaging emerged from this episode with a stronger balance sheet. With continued pressure on reimbursement, how are you optimistic about the outpatient imaging center business right now? Hallman: Medicare reimbursement pressure is just a fact of life in diagnostic imaging, and we don’t expect that to change. Our optimism about our business comes from a few places. First, during the past few quarters, we’ve experienced steady year-over-year volume increases in most of our imaging centers for the first time in several years. Second, we have been very capital-constrained for a long time, and we expect a positive impact as we free up capital to make appropriate investments in our business. Finally, because our lack of capital has limited our investment in equipment, we have invested in our people, developing what we believe is the best service model in the industry. We call it Patients First, and we use it in hiring, training, performance-tracking, and pretty much every element of our business. Combining this with an ability to invest in our business makes us feel very positive about the future. ImagingBiz: You have a mix of mobile and fixed site scanners in the field, as well as a number of outpatient imaging centers. How will that mix change in the coming years, and are you looking at new service lines? Hallman: We have 42 freestanding retail imaging centers ,as well as 17 fixed-site wholesale centers with a mix of modalities from MRI, CT, and PET/CT to mammography, X-Ray and others. We also operate 110 mobile MRI and PET/CT units. Our growth plans are primarily focused on four areas. These include growing our freestanding retail imaging center network through acquisitions, and organically growing our fixed -site wholesale business. They also involve the growth of strategic hospital joint ventures in select markets, and the launch of a new revenue management systems and services business that will focus on helping imaging centers capture more revenue and achieve better results. ImagingBiz: What are your plans for spending the $17.5 million revolving credit facility? Hallman: We expect to have enough cash flow from operations to cover the needed investment for new and upgraded equipment to maintain our business. This will render our credit facility available to make targeted acquisitions and investments in growing our business.