The Doctor Will See Through You Now

Capitol Health

Capitol Health Ltd is an Australian public company providing medical diagnostic imaging services. It is the only ASX-listed company operating exclusively in diagnostic imaging. Its aim is to build a leading primary healthcare business, generating sustainable growth and profitability for shareholders and delivering superior patient experiences at its centres…

Capitol Health is dedicated to providing the best of care to healthcare practitioners and their patients across all imaging modalities and since commencing operations in 2006, has grown to become Victoria’s second largest provider of diagnostic imaging services by number of clinical facilities. Capital Radiology, which is what might be termed the retail end of the business, is a wholly owned subsidiary of Capitol Health.

John Conidi is Managing Director. A businessman accountant rather than a doctor, he founded this business seven years ago although he first got involved with radiology in 2001 when he financed a friend who wanted to set up such an operation. As that business slowly grew and prospered, John recognised the opportunity to expand with additional sites, and by 2007 had nearly a dozen outlets. At that point the decision was taken to make the company public (in this case via the already-established Capitol Health which had acquired a series of dental health clinics) and expand, initially through takeovers further into radiology.

There are now 37 such centres around Victoria, most on high streets (and mainly metro although there are a couple of rural centres, the furthest away being at Mildura in the far north-western corner of the state) and one in a hospital. The way Australia’s heath service is set up, with the government the predominant funder, means that a patient will typically begin by going to a general practitioner and if the diagnosis requires further testing – for example, pathology or radiology – typically that testing would be done outside the hospital environment in a private practice who may charge a fee above that which is funded by Medicare. John says that more imaging is carried out in Australia per capita than in most other countries because of this structure. More imaging does not necessarily equate to better care, he acknowledges, “but the key is that there is easy access to diagnostic imaging for most Australians, in that they can go to a local private provider and get work done relatively quickly – within one or two days if not the same day – whereas if they go to a public hospital they may have to wait several days or possibly weeks.”

Australian radiology is considered world-leading, he adds, especially in terms of the qualifications of technologists and specialist clinical consultants involved. A potential drawback in the system is its openness to abuse – it is possible for more imaging to be ordered than is strictly necessary and since this is a matter of exposure to ionising radiation, this is not a good thing. “You don’t want someone referring you [to radiology] just for its own sake or getting tests done that you don’t need.” But on each of the most important criteria – accessibility, cost and quality – “it’s the best in the world.”

Unfortunately, radiology has become somewhat commoditised. “It’s one of those things where value is not necessarily recognised and as with everything else in the world at the moment, people are looking for a cheaper alternative,” especially on the internet where people can search for a cheaper imaging service. “Our main differentiator is the quality and safety of our service; it’s something we spend a lot time and money on. In the past 12 months we’ve invested heavily, upgrading our CT fleet to Low (radiation) Dose machines and have upgraded the non-ionising radiation modalities MRI and Ultrasound.

“We also invest heavily in IT because we need to be able to distribute information.” Capitol Health is in the data business – scanning and capturing, storing and distributing information – “That’s our job.” If that can be done in an efficient, quick, stable and safe environment, John says, the chances are you will be providing better quality than the competition, meaning repeat business from the referrer.

Radiology technology today is tremendously expensive and labour-intensive. This is no longer a case of producing a simple X-ray looking like ghostly black-and-white negatives of bones. Modern techniques such as MRI (magnetic resonance imaging) scanning use machines that cost well over a million dollars and a CT (computed tomography) scanner costs more than half a million dollars. “We also need people to run those machines,” adds John. The nature of the business is such that it would be illegal to enter into contracts with referrers, or to arrange volume discounts, “so it is all based on providing great service day in, day out. It’s that simple – and it’s also that difficult.”

Emerging and ever more sophisticated technology has helped Capitol Health. Not much had changed in radiology for some 60 years, John explains, until the last decade. “Especially in the last five years,” he says, “new technology and things like increasing bandwidth have created enormous opportunities in terms of the way we capture information and then distribute it. Four years ago we made the decision to invest heavily in IT, especially in broadband so all our sites are connected by fibre-optic cabling. Our information system records all patient data – not just details such as date of birth but also archives all images taken in a standardised format across all sites. Our intention is to retain the data indefinitely with the objective of fostering loyalty, encouraging the patient to choose our clinics should they require imaging in the future.” Capitol Health is then in the best position to diagnose that patient by being able to compare current with previous images, which is what diagnostic medicine is all about. “This is one area we have really been able to leverage in terms of offering better service. We can have results within one hour,” whereas five years ago it would take a full day and would typically involve physically transporting images from one location to another. Today the images wing their way through the broadband connections, almost in real time – although the time-honoured practice of walking down the street with a very large envelope has not yet entirely disappeared!

John is not particularly excited by the prospect of a national broadband network because the company has already set up its own version which is very similar in the absence of NBN anywhere near most of the company’s centres. However, in the near future, “we may start to see the benefits of NBN because hopefully we can access faster speeds at lower cost.” Those two factors do remain a hindrance, he says. “We spend over a million dollars a year on data transfer so if we could reduce that cost I would be more than happy. Any IT development usually requires more and more bandwidth over time, so if NBN can benefit the operation at all it would be very welcome.”

There is a web portal, a ‘cloud’ in today’s jargon, where consultants and surgeons, anyone authorised to access it, can view images direct. “We are in the process of developing our own iPhone and iPad applications too, and we’re looking at giving patients themselves access to their images and reports as well so they could keep their own database.” This would be useful for people travelling interstate or overseas, for example, to be able to access their medical record (or at least one aspect of it) at any time. It almost goes without saying but should be emphasised that Capitol Health takes extreme pains over security and data protection for patient confidentiality and just because someone calls our centres and says they are a doctor needing to see patient X’s information it doesn’t mean the caller really is a doctor, “so we have all the necessary protocols to ensure that the people who get to see reports are who they say they are.” This is an issue currently being examined by the government, which is looking at issuing each Australian with their own medical number for storing all their personal records together in a secure, portable and accessible way.

Capitol Health has ambitions to expand with more centres, although “any expansion will be measured and targeted and would rely on having good relationships with partners… In terms of the market in Melbourne, we enjoy about 10 per cent market share, which is still relatively small with room to grow.” The company needs to ensure that any further imaging centres would be able to operate under the same quality mindset that Capitol Health already practises.

“Overall,” John says, “our biggest priority is to the patient, to ensure he or she receives the best possible care from our perspective. Radiology plays an extremely important function in terms of health care and we take our job very seriously. But Capital Radiology’s underlying principle is good patient care. If we do that, everything else takes care of itself.”

Making Sense of Management

Management is the art, or science, of getting things done through people. Sounds fairly straightforward – except for the fact that people are not robots waiting to do our bidding. People have their own minds, motivations, and goals. So how do managers keep operations – and the people behind them – running as planned?

December 16, 2018, 3:54 PM AEDT