Q: We are considering building an imaging center in a new service area. How do we evaluate the area in terms of estimating market demand?

1. First you should learn everything you can about the new service area including population, demographics, growth rates of various age groups, expected financial class of patients, number of referring physicians in the area, types of competition and services offered. Understand the market potential for procedures by modality. There are national databases and consultants that can assist in projecting these estimates for you. Determine, based on the level of competition in the area, a reasonable estimate of market share range (i.e., 10% - 20%) and calculate estimated volume by modality for your Center. Compile financial projections utilizing "worse case and expected case" scenarios from the estimated volume projections to determine breakeven by modality.

Q: How are most imaging centers financed? How do you go about selecting the financing source?

1. Most freestanding imaging centers usually finance the real estate or tenant improvements separately from the equipment because of the difference in life cycles of the assets. Equipment has several different options including straight debt financing, operating lease treatment or capitalized leases. Real estate will usually require down payments while equipment leases often may not. Owners usually are required to provide equity investment or working capital financing to cover startup expenses and a period of four to six months of operating expenses.
2. Regents recommends developing an RFP (request for proposal) for selecting financing sources in which you would explain the project parameters, objectives, identify your specific needs and criteria for approval. This would be distributed to local as well as national lenders with experience in financing imaging centers. A consultant or a CPA can help you evaluate and compare the proposals.

Q: We are trying to decide whether to buy land and build a new center or to lease an existing building and incur the renovation cost. Which make the most sense and what do I need to know to make an informed decision?

1. Leasing space in an existing building would usually be the least expensive solution in the short term. It could also minimize the initial out of pocket costs for starting the Center. It should also allow you to get the Center opened quickly and start generating revenue. However, leasing may not be the best alternative. In the long run ownership of the real estate and mortgage financing will likely be less costly if you plan to stay in the facility for five years or more. If you are successful you could pay off the mortgage on the property early and eliminate that cash flow drain. You could build equity in the ownership of the building. Many mortgagors will allow a ten year term with a 20 year amortization, spreading out the cost over a term more commensurate with the life of the building. Interest costs on long term real estate debt are still relatively low.
2. If building, you need to know if a good site is available and at what cost. You need to know what the cost to build would be and what your lender would require for a mortgage. You need to get an estimate of closing costs for a construction and permanent mortgage. On the leasing side you will need to identify a suitable site and have it evaluated by an imaging consultant or an architect. You will have to plan out the site with a schematic drawing to get an estimate of what it will cost for tenant improvements which will usually have to be financed or funded separately. Evaluate the proposed lease to understand what costs will be borne by you the lessee. There are a lot of other details that must be handled and understood before proceeding on either course.
   • Strategic Planning
   • Financial Planning
   • Marketing Planning

     Regents' Image Works™ program is a comprehensive marketing plan designed to increase patient volumes and improve relationships with referring physicians. Regents evaluates your market and potential gains in market share by service line and zip code in order to define the target audience, key products and service differentiators. These elements will form the basis of an effective, focused marketing action plan.

     The goal for a successful marketing program specific to imaging services is to build a strong awareness in the community and among referring physicians. The key in doing this is to deliver a message that you have superior customer service which is critical for retaining and growing market share. Regents presents a complete menu of services that provides an elite program that best fits your marketing needs for medical imaging.

   • Joint Venture Planning
   • Operational Assessment

     A customer service plan includes an evaluation to identify key issues for both professional and technical services. Regents observes customer service from a holistic approach proving that the entire network of the department directly affects the positive or negative patient experience. Every element of the patient process directly influences the patient and referring physicians' choice and satisfaction with your imaging services. A referring physician satisfaction survey will be conducted along with key interviews that help identify strengths and weaknesses for service improvement. Regents will make recommendations for corrective action categorized by customer support, technical service and professional service. The customer service plan includes:

     • Referring Physician Survey
     • Physician Interviews
     • Patient Surveys
     • Internal Customer Evaluations
     • Valuations