About two years ago, Anaheim’s Alliance Imaging Inc., a provider of medical scanning services, was feeling its industry’s pain.
The culprit: a slowdown in Alliance’s core offerings,computed tomography and magnetic resonance maging scanning via trucks with laboratories inside.
Along with trucks that visit hospitals and other healthcare providers, Al-liance runs scanners for hospitals, doctors’ offices and universities.
Now Alliance executives say things are looking better, thanks to a focus on hospitals and cancer screening.
“Our business model is to address the needs of hospitals,” Chief Executive Paul Viviano said during a presentation last week at the Smith Barney Citigroup 2005 Healthcare Conference in New York. “This is a disciplined strategy.”
Alliance has been able to offset declines in its mobile MRI business by turning to positron emission tomography, or PET scans used to detect cancer, Viviano said.
The company also works with hospitals to run scanning centers, he said.
Alliance projects to open 12 to 15 centers this year, Viviano said. Last year, the company opened 12 centers.
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Alliance Imaging truck lab: scanning centers now a focus |
The centers provide a stable source of business for Alliance: their contracts run for seven to 10 years, versus three-year pacts for Alliance’s mobile units, Viviano said.
PET scans should get a boost from Medicare’s move to reimburse for more scanning, Viviano said. PET scanning’s been growing at 30% to 40% a year, compared to 15% for CT scanning.
Alliance’s pitch is to save hospitals money on costly scanners.
“This is an era of dramatic capital needs,” Viviano said.
Alliance serves more than 1,000 hospitals in 43 states.
Competitors include Radiologix Inc. of Dallas, Medical Resources Inc. of Hackensack, N.J., and InSight Health Services Corp. of Lake Forest, a privately held company.
R. Brian Hanson, Alliance’s chief financial officer, talked about the company’s money picture. Its debt has been paid down from $747 million in 1999 to about $555 million today.
Getting paid isn’t a big worry for Alliance, Hanson said. The company offers nearly all of its services to hospitals at a wholesale rate.
“We bill them on a fee-per-scan basis,” he said. “The hospitals then bill retail (prices) for Medicare and private payers. It reduces the reimbursement risk for us.”
Alliance had a tough 2004, posting a net loss of $486,000. That was down from a $32 million loss in 2003. Sales last year were up 4% to $432 million.
The company counted a market value of $470 million late last week.
Alliance, founded 22 years ago, returned to Wall Street in 2001. It first went public in 1987 and was taken private a year later.
A second offering came around in 1991. Alliance’s stock traded publicly for about another six years. In 1997, Apollo Management, a private equity firm, took Alliance private again.
Kohlberg Kravis Roberts & Co. now owns about 70% of Alliance’s stock.
Dentists Coming to Anaheim
More than 27,000 dentists, industry professionals and dental products exhibitors are set to gather in Anaheim May 12 to May 16.
The occasion: The California Dental Association’s 2005 spring scientific session at the Anaheim Convention Center.
3M ESPE Dental Products, a 3M Co. unit based in Irvine, Newport Beach-based Glidewell Laboratories Inc., San Clemente-based Biolase Technology Inc., and Kerr Corp., a unit of Orange-based Sybron Dental Specialties Inc., are among exhibitors expected to attend.
Bits and Pieces:
Sutura Inc., Fountain Valley, said its combination with Technology Visions Group Inc. of San Marcos, is on schedule to be done by this year’s second quarter. Last year, Sutura planned to join forces with Millennium Holding Group, a Las Vegas-based company, in a deal that fell through Dr. J. Brennan Cassidy, a past president of the Orange County Medical Association, is the new chair of the California Medical Association’s Board of Trustees Mike Wilson, health and benefits practice leader for Mercer Human Resource Consulting’s Orange office, presents the “Mercer National Survey of Employer-Sponsored Health Plans” at the April 28 meeting of the Orange County Employee Benefit Council. The meeting is set for the Beckman Center (across the street from the University of California, Irvine). Information: (714) 573-8605 Paragon Biomedical Inc., Irvine, said it agreed to buy InDatum Ltd., a British clinical research organization, for an undisclosed price. Paragon specializes in managing third- and fourth-phase clinical trials in various areas.
