Advertisement
The leader in healthcare business news, research & data

Edward-Elmhurst invests $7 million in growing MRI business

Edward-Elmhurst Health is investing $7 million in a growing MRI business, a deal that underscores how hospitals are responding to cost-conscious patients.

Smart Choice MRI arrived in the Chicago area earlier this year, offering MRIs for no more than $600 each. That's a deal for some consumers, depending on their insurance, for a procedure with a fluctuating price tag. The national average for a MRI scan of the knee (without dye) is nearly $700, for example, while in Illinois it's nearly $740 on average, according to a price tool for the Health Care Cost Institute.

“Individuals are much more responsible now for their own health, for the dollars that they pay, and the expectations for being able to predict what will happen to them,” said Pam Davis, CEO of Naperville, Ill.-based Edward-Elmhurst.

While the deal could impact the west suburban system's own MRI business, Davis said Edward-Elmhurst is looking to lower costs. Investing in Smart Choice will help do that, she said.

Certain MRI procedures, such as breast or heart scans, likely still would be done at the hospital. Smart Choice typically caters to less risky patients, such as a teen with a sports injury.

The three-hospital system's infusion will help the imaging business open five new clinics in Illinois, including in Bolingbrook, Lombard and Oswego, and four more around the Twin Cities in Minnesota.

Smart Choice CEO Rick Anderson said the company expects to have 19 clinics by the end of 2016 and plans to perhaps double that amount a year later by opening clinics in a few more additional markets.

Anderson said he's not in talks with other Chicago-area hospitals and instead wants to focus on the relationship with Edward-Elmhurst. The system's investment gives it a 10 percent stake in Smart Choice and a board seat that will be taken by Bill Kottmann. He becomes president and CEO of Edward Hospital on July 1.

“If we're going to truly adapt or alter the way healthcare is experienced based on what the consumer wants, you can't go it alone,” Anderson said.

So far, Smart Choice has raised about $14.5 million from investors, including Edward-Elmhurst. Anderson declined to provide annual revenue figures.

"Edward-Elmhurst invests $7 million in growing MRI business" originally appeared in Crain's Chicago Business.


Tags:

Comments

Loading Comments Loading comments...
Advertisement