THE TIMES 100 : The Best Performing Companies in California : The Bottom Line : Medical Imaging Centers Finds Success in Niche : The San Diego-based firm rents diagnostic machines to hospitals.
Medical Imaging Centers of America is not only a newcomer to The Times 100 list, it’s also a new kind of service company that fills a niche created by the profound changes in the medical business during the past decade.
A public company since 1984, MICA is one of the largest independent providers of diagnostic medical imaging services in the nation. Those services include magnetic resonance imaging, X-ray and CAT scanning in 15 standalone centers, primarily in Western states. The company has also placed equipment and staff in 270 hospitals that it rents out on a fee-for-service basis.
The San Diego-based company has greatly benefited from the growth in popularity of magnetic resonance imaging, a diagnostic technique. The number of MRI procedures has ballooned from 200,000 nationwide in 1983 to more than 4 million annually now, Antone Lazos, MICA chief executive, said.
In an MRI procedure, high charges of magnetic energy penetrate the patient and are then given off again at different levels, depending on the organ or tissues. That creates images that are then displayed on film or a video monitor. CAT scans, or computerized axial tomography, use small levels of X-rays to create highly accurate three-dimensional images of the body.
The popularity of MRI and CAT scan procedures, which combined make up 70% of MICA’s revenue, is attributed to their ability to detect some diseases before they show up on X-rays. CAT scans involve small levels of radiation, and MRIs use none at all, thereby reducing hazards to health workers.
Hospitals want to do business with MICA in large part because the San Diego firm assumes the risk of financing the expensive imaging and X-ray machines. That’s also important because imaging and scanning technology has been changing quickly over the years--an expensive investment risks. Those are important selling points in an age when hospitals’ capital outlays are being pinched as government and private insurers clamp down on health reimbursements.
“The hospital industry has gone through a lot of financial uncertainty with the changes in reimbursement schemes,” said Joe Kerr, chief financial officer of North Florida Regional Medical Center in Gainesville, Fla. MICA financed and operates a $2.5-million imaging center adjacent to the Gainesville hospital.
The ever-changing, complex technology has had “an exponential effect on the knowledge needed to best manage an operation as complex as a hospital. Sometimes it’s better to go out and buy that expertise than to expect to have employees who will always be up to date on everything that’s going on,” Kerr said.
Last year, MICA reported a $6.2-million profit on $78.3 million in revenue, up from a $4 million profit on $40.1 million in revenue in 1989. Its 28.9% two-year average return on equity put it on The Times 100 list at No. 21.
The company was founded by Lazos, 48, in 1981. A Harvard MBA with a varied career in the medical supply industry, Lazos formerly was in management at Baxter International, a medical product and services company.
