PROFIT W100: Red-tape diaries

Written by Jim McElgunn

#19 KMH Cardiology & Diagnostic Centres

2005 revenue: $20.3 million

Neena Kanwar isn’t the sort of person to deliver a barnburner speech on “How the Private Sector Can Help Save Medicare.” But you can’t miss her pride in the fast, efficient patient care her chain of diagnostic clinics delivers to the health-care system. You also can’t miss her frustration at the regulations that prevent her firm and Ontario’s 1,000 other independent health facilities (IHFs) from doing even more.

As a nuclear cardiology research technologist, Kanwar saw that thousands of patients had to suffer long waits for test results from hospital labs. When her own father endured this white-knuckled ordeal after a heart attack, she and her husband, Vijay Kanwar, did something about it. They started small in 1988, selling their house to finance a cardiac diagnostic clinic. By last year, Mississauga, Ont.-based KMH Cardiology & Diagnostic Centres had 130 employees; its eight Ontario clinics served more than 75,000 patients and generated $20.3 million in revenue. And, as KMH’s president, Neena Kanwar has steadily climbed the ranks of the PROFIT W100, going from No. 59 in 2000 to No. 19 today.

Her achievement in building one of Canada’s largest diagnostic services is especially impressive, given that IHFs are stifled by regulations. Ontario’s refusal to green-light all but a handful of new private clinics since introducing licensing in 1991, for instance, reflects cynicism of the role profit-making enterprises can play in medicare. Kanwar attributes this to a misconception: “When people think about the private sector’s involvement, they think about U.S.-style health-care services. But the IHFs are community-based clinics and are an integral part of the public health-care system.”

For the past 17 years, Kanwar has been their chief advocate, working to get Ontario to recognize the superior patient care they deliver, write regulations they can live with and give them breathing room to adopt new technologies. Kanwar points to one measure of IHFs’ importance: they carry out half of the 10 million diagnostic procedures per year in Ontario, in a range of specialties. KMH’s are nuclear medicine (assessing organ function by tracking a tiny amount of a radioactive substance introduced into the patient), cardiology diagnostics and magnetic resonance imaging (MRI). Other clinics offer X-rays, ultrasounds and mammography. Kanwar thinks IHFs’ share of tests should grow to more than half, because they’re based closer to patients and generally offer shorter wait times — although hospital labs still need to provide imaging for in-patients and emergency patients.

The near-freeze on the licensing of new clinics has forced KMH to grow largely by acquisition. Through a series of deals financed by personal capital and bank loans, it has added five clinics to the three it had when licensing began.

Superb patient care has been the other key to growth. Patients whose doctors refer them to KMH normally get an appointment within a week for nuclear medicine and cardiology procedures, and test results are turned around in five to 10 days. Urgent tests are done even sooner.

But there’s more to the formula than being fast. KMH insists its staff consistently deliver high-quality service, with a “no excuses” policy for non-performance. It uses custom software to centralize scheduling, billing and resource allocation. It surveys referring physicians, using the feedback to help shape its business planning. And it makes same-day follow-up calls to doctors to ensure they act immediately once they receive urgent test results. KMH’s 95% approval rate among referring physicians fuels more referrals to its existing clinics.

Kanwar champions her industry as president of the Independent Diagnostic Clinics Association. She founded the group in 1989, when Ontario announced plans to license diagnostic clinics to ensure they met quality-assurance standards. Kanwar worked with the bureaucrats to write regulations IHFs could work with. Since then, she has been a tireless presenter to the committees that advise the government on policies affecting IHFs.

Yet, they still face roadblocks. The health ministry lets IHFs expand their offerings only after it identifies a need to add capacity for a specific diagnostic service, then chooses from among existing clinics that apply to deliver it. Even when the province licensed the first IHF-run MRI clinics in 2003, it allowed only five (two owned by KMH) and forced them to operate on a not-for-profit basis. The regulators have also made it hard for IHFs to shift away from outdated technologies. “Say you’re licensed to do X-rays, and 10 years down the road X-rays become obsolete — you can’t move to a new technology because it’s not part of your licence,” says Kanwar.

Still, KMH has found room for innovation. It’s now testing a service in Mississauga to help high-risk cardiac patients change their lifestyles. It is also in the early stages of looking at offering MRI tests in the U.S.

For Kanwar, this growth isn’t just a way to make money. It also makes it possible to give back to her adopted country. (Born in India, she moved to Canada when she was 16.) This year, Kanwar and Vijay, KMH’s CFO, donated $5 million to open an ambulatory care centre at a Toronto-area hospital. Her ultimate satisfaction is the efficient and compassionate service KMH offers to patients in crisis. “To be able to provide faster diagnostic tests is very rewarding,” says Kanwar. “We’re helping people in their time of most need.”

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