When Kip Hallman took the helm at InSight Health Corp., a diagnostic imaging service provider, he had his own diagnosis to do.
He watched the cash flow dive from about $100 million in fiscal 2005 when he joined the company to barely $40 million in fiscal 2008, which ended two months after he became president and CEO in April. He also saw fiscal 2007 revenue of $287 million drop to $265 million in fiscal 2008.
While the numbers dwindled, Hallman was in the field picking up clues that pointed out some underlying problems.
“When I was very new to the business, I’d be out traveling with one of our managers. I’d be talking with one of our partner radiology groups,” he says. “They get paid by us based on our collections, so one of them might say, ‘Gosh, you guys just don’t seem to collect as much money as you should for these services.’”
Other companies, for example, charge $100 for a product and receive $100. In health care, you may bill $100 and only see half of that. And at InSight, some of that was slipping through the cracks.
“It wasn’t clear why, but it was very clear that, for some reason or another, there were holes in our revenue cycle,” says Hallman, citing their fragmented revenue cycle management department as a possible culprit.
So while the symptoms weren’t all obvious, Hallman knew InSight was ailing. But he also knew the right treatment could bring it back to health.
“It was clear to me that there was a lot of low-hanging fruit there, and that if we just focused the right people and the right energy and put in place the right systems, that we would benefit significantly by that,” he says.
