Imaging Firm Likes Look of New Jersey Prospects

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In yet another example of how Obamacare is reshaping the health care industry, Westwood diagnostic imaging firm RadNet Inc. has doubled down on a joint venture in New Jersey with Barnabas Health, the Garden State’s largest health system.

The two formed the New Jersey Imaging Network three years ago to build scale and gain leverage with local payers – objectives that have been driving lots of consolidation in the health care industry.

The venture has built or purchased seven imaging centers, and now RadNet will sell the partnership the 10 imaging centers it owns in New Jersey; Barnabas will sell one.

The move comes as the Affordable Care Act has aligned the interests of insurance companies and providers in a way that encourages cost-efficient providers to take responsibility for the total health of large patient populations, what’s known as population health.

“There’s more and more patients going into the system who were previously not covered by health insurance, large patient populations who need all sorts of services,” said RadNet Chief Financial Officer Mark Stolper. “There’s been a jockeying for position between the insurance companies for these lives as well as other more vertically integrated systems such as Kaiser.”

By aligning more closely with Barnabas through the joint-venture expansion, RadNet will get higher reimbursement rates from insurance companies for the services provided at the centers while continuing to manage the facilities on behalf of New Jersey Imaging Networks, Stolper said.

He added that Barnabas also wants to buy or build more locations, a sunny prospect considering the health system’s imminent merger with New Jersey’s Robert Wood Johnson Health System, a deal that will create a system with annual revenue of $4.5 billion.

New Jersey Imaging Networks will pay RadNet $35.5 million in cash for the 10 imaging centers, which Stolper said is a big benefit considering the increase in management fees RadNet will get for running the centers and the higher reimbursement rates the joint venture will yield.

“From a financial perspective, we’re not materially adversely impacted,” Stolper said. “The financials don’t change a whole lot, and yet we put $35.5 million in RadNet’s coffers that allows us to us to expand the business.”

Big Patient Data

Pasadena analytics firm Helynx, co-founded earlier this year by two computational neuroscientists, is having a good run.

The company, which designs data-analysis software for the life-sciences and medical industries, last week took a $20,000 first prize in an international clinical trial innovation competition run by the Bonnie J. Addario Lung Cancer Foundation and Free to Breathe, which also funds lung cancer research.

Helynx’s software can be used by hospitals or health insurers to parse large sets of anonymized data from electronic medical records or billing data to predict which patients are more likely to die or need more serious treatment.

“Health care is moving toward a more data-driven model,” said co-founder Chess Stetson. “For example, an insurer on the health care exchanges has to report information about the risk of their patient population, and for that they need analytical tools.”

Both Stetson and partner Boris Revechkis got their Ph.D.s at Caltech and had been working on the project out of Stetson’s garage for the past few years. Earlier this month, they took space in the offices of Pasadena incubator Idealab, which has not invested in the venture.

Helynx has also partnered with Dr. Jae Kim, a cardiothoracic surgeon at City of Hope, to use its software to mine medical records and match eligible cancer patients with ongoing clinical trials for their disease. Right now, such patients must either comb online resources to find such trials themselves or rely on their doctor being aware of every new one, Stetson said.

“One of the biggest challenges is going to be getting buy-in from health care institutions,” Stetson said. “We have to go through administrative hurdles in order to be able to have access to parts of the patient records.”

He added that Helynx is exploring implementing its software at a number of L.A.-area hospitals and medical centers.

Check Ups

Long Beach managed care provider Molina Healthcare Inc. has elected Richard M. Schapiro to its board. … Monrovia biotech firm Xencor Inc. has appointed Yujiro S. Hata to its board. … Implantable lens maker Staar Surgical Co., also in Monrovia, has named Keith Holliday vice president of research and development and Dr. Jon K. Hayashida to the newly created position of vice president of global clinical and medical affairs. … Pasadena lens maker Calhoun Vision Inc. has added Chris Cox, former chairman of the Securities and Exchange Commission, to its board.

Staff reporter Marni Usheroff can be reached at [email protected] or (323) 549-5225, ext. 229.

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