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9B02D024 QUINTE MRI David Wright and Kevin Saskiw prepared this case under the supervision of Professors Carol Prahinski and John Haywood-Farmer solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. Ivey Management Services prohibits any form of reproduction, storage or transmittal without its written permission. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Management Services, c/o Richard Ivey School of Business, The University of Western Ontario, London, Ontario, Canada, N6A 3K7; phone (519) 661-3208; fax (519) 661-3882; e-mail [email protected]. Copyright © 2002, Ivey Management Services Version: (A) 2009-11-30 On June 12, 2002, David Wright and his colleague, Kevin Saskiw, business development co-ordinators at Quinte MRI in Belleville, Ontario, were trying to decide what to propose regarding the magnetic resonance imaging (MRI) facility at Benton-Cooper Medical Center (BCMC) in Palmer, New York. Both men were frustrated and confused. Although the BCMC facility was only six weeks old, it already had a waiting list of 14 days for MRI scans. Because of this backlog, physicians had begun to refer their patients to competing MRI clinics. Dr. Syed Haider, Quinte MRI’s chief executive officer, expected Wright’s and Saskiw’s recommendations and action plan in two days. QUINTE MRI Quinte MRI, Inc. was a small (annual revenues of $1.5 million),1 but growing, international service provider specializing in medical diagnostic technologies, including MRI, nuclear medicine, ultrasound, computerized tomography (CT) scanning, bone densitometry, mammography and teleradiology services. The company helped design, install and operate scanning centres, and provided continued training and support for data interpretation. It maintained a variety of exclusive or partnership business arrangements with both fixed-site and mobile service turnkey operations. Quinte MRI’s equipment and components were from many leading manufacturers. Quinte MRI’s founder, Dr. Syed Haider, received his PhD in electron spin resonance and nuclear magnetic resonance from the University of Wales. After a short time as professor at the University of Guelph, he became a physics and chemistry teacher at Centennial Secondary School in Belleville, Ontario, in 1968. When he retired 30 years later, he started Quinte MRI. Haider firmly believed that the residents of small communities deserved the same level of health services as residents of large urban centres. However, MRI systems in small communities were rare. Haider’s first attempt to establish an MRI facility (in Belleville) was unsuccessful because Canadian regulations prohibited private-sector MRI. Thus, he turned to the Caribbean and the United States.

1All currency in this case is expressed in United States dollars. In June 2002, the Canadian dollar traded at about US$0.63.

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Quinte MRI had established facilities in five locations: the company headquarters in Belleville; a partnership arrangement with a radiologist in Laval, Quebec; and private MRI clinics in St. Louis, Missouri, the Cayman Islands, and Palmer, New York. With the exception of the Palmer facility, Quinte MRI held an interest of less than 20 per cent in each clinic. In June 2002, the company employed a total of about 20 people. Quinte MRI served three distinct client groups: 1. Hospitals seeking to outsource their diagnostic imaging services were particularly interested in service

reliability, access to the diagnostic equipment 24 hours per day, seven days per week and reasonable cost.

2. Physicians wanting to be partners in an independent diagnostic imaging centre saw cash flow, accessibility to the equipment and the strength of the relationship with their diagnostic imaging partner as major criteria.

3. Individuals wanting to operate their own diagnostic imaging centre, using Quinte MRI as a consultant in developing and carrying out the necessary steps to establish the clinic, wanted freedom from the hassles involved with establishing the business and were willing to pay a 10 per cent project development fee.

SCANNING TECHNOLOGY2 Various scanning technologies produced high quality images of the human body. The most obvious imaging technique was to use a camera to capture a visual image on photographic film. Although this technology was simple, it could be invasive, as surgery or probes were required for images of internal tissues, and it was normally limited to the wavelength range of visible light. Modern scanning began in 1895 with the discovery that tissues absorbed X-rays. Although X-ray technology was relatively easy to use and gave high-resolution scans, the rays were penetrating and potentially dangerous,3 and gave unclear images of some body features. They were particularly suited for examining tissue abnormalities, such as fractures, malignant tumors and respiratory diseases. The 1970s saw the first of an explosion in imaging techniques, all of which relied on computers to help gather and analyse scanning data in electronic form. Computerized tomography (CT) relied on a series of X-rays from various angles that were combined to provide a three-dimensional picture from which two- dimensional images from any angle and at any depth could be derived. In positron emission tomography (PET), the patient ingested a positron-emitting radioactive substance that could be monitored as it proceeded through the body. In the closely related technique known as single-photon emission computed tomography (SPECT), the ingested active component emitted high-energy photons. In ultrasound (US), sound waves were bounced off tissues or objects inside the body; the reflected sound waves were converted into an image. MRI relied on the fact that diamagnetic nuclei (those with magnetic moments) interacted with strong magnetic fields to create their own small magnetic fields. The induced fields were studied using variable

2Much of the material in this section was adapted from the Web site:

www.whitaker.org/94_annual_report/over.html, September 20, 2002. 3Although X-rays were potentially dangerous, the low intensity of the radiation and the short duration of typical scans had effectively eliminated the danger to patients. However, medical personnel faced a much higher risk, as they received repeated exposure to this radiation.

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frequency electromagnetic signals. At a certain frequency, the induced field resonated with the electromagnetic signal; this resonance was measured. Water comprised some 70 per cent of the human body, making hydrogen, which was diamagnetic and thus gave an MRI signal, the most common atom in living tissue. Although MRI did not involve the radiation danger of many other scanning techniques, it could heat up the tissues if the radio frequency was too intense. Also, because ferromagnetic materials — those containing iron, nickel or cobalt — interacted strongly with magnetic fields, people with screws, plates or other ferromagnetic materials such as pacemakers or metal fragments in their bodies could not be scanned with MRI. Doing so gave poor resolution scans and could be dangerous to the patient. The many types of scans were valuable and complementary because they relied on different physical phenomena and gave different information. Although X-ray scans differentiated among tissues based on their density, MRI differentiated based on the tissues’ water content. Whereas X-rays and MRI gave information about internal structures, PET, SPECT and US could be used to observe biochemical processes, such as metabolism and fluid flow, as they occurred. Active research continued in scanning technology and techniques. Although conventional MR machines were multi-purpose and expensive, many newer ones were smaller, cheaper, tailored for a particular part of the body and more patient-friendly, with reduced noise and open on one side to reduce the patient’s feelings of claustrophobia. Other research streams aimed to (1) improve the MRI image and scanning depth capabilities by modulating the frequency of the electromagnetic signal; (2) broaden the scanning technique to other diamagnetic atoms, such as carbon, sodium and phosphorus; (3) develop ways to monitor body processes with MRI, (4) combine two or more scanning techniques; and (5) expand the ways in which these technologies could be applied. Image quality depended critically on the strength of the magnet and the time required to produce the image. In 2002, the newest generations of magnets approved for clinical use were 3.0 Tesla, whereas the previous standard had been 1.5 Tesla and 0.7 Tesla for the closed and open MRI unit, respectively.4 Exhibit 1 shows a photograph of a 1.5 Tesla short-bore MRI system. A typical exam took from 30 to 45 minutes, although some exams could be completed in 10 minutes. MRI had become increasingly popular within the medical profession. In 1998, an estimated 11.9 million MRI procedures had been performed in the United States; by 2001, this number had risen to 18 million procedures. In addition to growth in the number of scans, the number of hospital and non-hospital scanning sites had risen from 4,490 in 1998 to 5,550 in 2001.5 MRI equipment represented a significant investment. In 2002, the approximate cost of an MR machine was $1.5 million to $3.5 million. In addition, the facility required space6 and the equipment required shielding from magnetic fields. Installation, including shielding, cost $250,000 to $500,000 depending on the extent of renovations required. The typical reimbursement from United States insurance companies was $700 per scan. Exhibit 2 shows operating costs, which Quinte MRI’s managers believed were conservative, for a typical MRI facility.

4By way of comparison, a 1.0 Tesla magnet had a magnetic field about 20,000 times stronger than the Earth’s natural magnetic field. 5Van Houten, Ben, IMV Census Shows MRI Growth, Decisions in Imaging Economics, 15 (8), August 2002, page 8. 6For example, a model facility proposed by General Electric occupied 167 square metres gross and 154 square metres net.

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BENTON-COOPER MEDICAL CENTER Benton-Cooper Medical Center was a private, not-for-profit, 144-bed community hospital and regional cancer centre that provided primary care to the nearly 16,000 residents of Palmer and regional services to the 118,000 people in Adelaide County, which was in a largely rural area. BCMC had an active medical staff of more than 40 physicians, representing over 20 specialties. Although Creston, another Adelaide County community of 19,000, about 40 kilometres from Palmer, had two 200-bed hospital facilities with MR machines, BCMC’s administrators believed that there was an opportunity to compete successfully with a third MR machine. The primary reason for this view was that there appeared to be enough demand — in the United States the annual scan rate was approximately 68 per 1,000 people and the cancer rate in Adelaide County was somewhat higher than the national average. Second, the administrators anticipated that overall demand for MRI scans in Adelaide County would continue to grow at approximately 15 per cent per year. However, they recognized that the number of scans depended critically on the number of doctors practising various specialties. Because the MRI centre would get referrals from the hospital doctors and promotional support for advertisements with the local print and radio stations, the administrators believed that they would be able to generate sufficient volumes for their own fixed MR systems. In conjunction with the hospital administrators, Quinte MRI staff developed the monthly demand forecasts shown in Exhibit 3, which reflect seasonality owing to doctor vacation schedules and statutory holidays. And finally, the administrators were concerned that if they did not have an MR machine, BCMC would become a second-rate hospital. During the winter of 2001-02, BCMC decided to replace its MRI service provider because the medical centre wanted to increase the number of days of operation beyond the current two days per week. As they searched for a replacement, the administrators became aware of Quinte MRI’s impressive capabilities, such as availability for 24 hours per day and seven days per week, and Haider’s integrity and personal attentiveness. In February 2002, BCMC’s chief executive and board approved the outsourcing of MRI services to Quinte MRI. The agreement specified that Quinte MRI would own 100 per cent of the MRI centre, including imaging equipment, and would be responsible for most of its operation and management, including the hiring and salary of MR technologists to conduct the actual procedures. Quinte MRI would bill the hospital on a fee per scan basis. In the negotiation process, the anticipated average revenue was adjusted based on the expenses that would be covered by BCMC. The hospital would pay the salary and expenses of the radiologist, who would analyse the MRI scan and report the results. The hospital would also schedule the MRI clinic. It would charge Quinte MRI $140 and $5 per scan, respectively, for these two activities. The imaging suite was housed in a trailer connected to a hospital corridor. The other required functions were housed inside the hospital, some distance from the scanning suite. Exhibit 4 shows a layout of the radiology department. The MRI clinic began operations on May 1, 2002. At the hospital’s request, Quinte MRI leased one 1.5-Tesla General Electric (GE) short-bore high-speed MRI system, as shown in Exhibit 1. Although the rated capacity of the machine was two patients per hour, the actual number of scans in any period of time would depend on the types of exams being performed. For example, as shown in Exhibit 5, an abdominal MRI scan without contrast was projected to take 30 minutes, whereas an abdominal scan with contrast was projected to take 45 minutes. Contrast, which provided a more detailed image, was usually required in about 25 per cent of scans.

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THE SCANNING PROCESS To receive an MRI scan at BCMC, patients first had to receive a referral from their doctor. The scanning process commenced when the patient or doctor’s assistant contacted the MRI scheduling department to arrange an appointment. Although the expected lead time for referred patients was 48 hours, some patients, called “walk-ins,” required a scan that day. When the scheduling department received a call, the receptionist wrote the patient’s name and type of procedure on a form with eight time slots, each for a one-hour increment. Exhibit 6 gives the schedule for June 12. Upon arrival at the MRI clinic for their appointment, patients checked in with the receptionist at the front desk and waited for the MR technologist to escort them to the MR machine in the magnet room. Some patients had difficulty walking or were confined to stretchers or wheel chairs. As the patients were escorted, the MR technologist asked questions to determine whether there were any health reasons that would prevent the patients from having an MRI. Patients who indicated possible health risks were further tested. The technologist took approximately five minutes to pick up the patient and determine if there were health conflicts. Patients not fit for the MR test were sent home. In such cases, the machine sat idle. During the first month of operation, an average of 1.2 patients per day were rejected for these reasons. In addition to checking possible health risks, the MR technologist ensured that patients were not wearing clothes with metal components. If the clothes had metal, the patient was required to change into a hospital gown at the change room, which took an additional four minutes, on average. Approximately 25 per cent of patients were in this category. Once in the magnet room, the MR technologist took one minute to provide a brief orientation and verify the paperwork. Patients would lie on a movable bench protruding from the bore, or tunnel, of the MR machine. A surface coil was positioned around the part of the patients’ anatomy of interest, such as the head, and the patients were then moved into the bore where the scanning began. It took approximately four minutes to position the coil and move the patient into the bore. The MR tunnel was relatively small, dark and noisy, which caused a feeling of claustrophobia in some patients. In addition, during scans it was important for patients to remain as motionless as possible. The MR technologist was responsible for conducting a set number of procedures to obtain the images requested by the referring physician. These procedures took a specific amount of time that was easily measured and consistent. For a 30-minute scheduled MRI scan, the actual time in the MR tunnel was 16.5 minutes. While the scans were in progress, the MR technologist sat in the tech room and entered the patients’ information into the hospital information system so that the patients could be tracked. Data entry took one minute, on average. Upon finishing the MRI scan, the MR technologist printed the MRI films and removed the patient from the machine. The technologist then took two minutes to escort the patient back to the front desk, stopping at the change room, if needed, for approximately four minutes. At the receptionist’s desk, the MR technologist checked off the patient’s name on the log to confirm that the task had been completed. Then, the technologist greeted the next patient. Throughout the day, the receptionist printed the confirmations and reports for billing purposes. Because each patient required between four and 16 sheets of film per MRI scan, averaging eight sheets, and it usually took 45 seconds to print each sheet, the MR technologist waited until after the fifth or sixth patient before collecting, sorting, labelling and then transferring the film to the radiologist’s office on his or her way to pick up another patient. The radiologist took approximately five minutes to read the patient’s film and dictate a diagnosis into a recorder. The dictation was transferred electronically to the transcription

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department, where it was typed. The transcription department was located in a building adjacent to the hospital. One to three hours after they received the transcription, the transcription department returned the typed diagnosis to the radiologist for final approval. About every two hours, the radiologist verified and signed a group of transcriptions as a break from reading images. Once approved, the signed transcriptions and MRI films were transferred to the scheduling department, where a copy of the signed diagnosis was printed. The original transcript report and the MRI films were attached to the patient’s files, and together they were sent to the basement for filing and storage. The copy of the transcription report was sent to the referring physician. IMPLEMENTATION ISSUES Now that the BCMC MRI clinic had been in operation for six weeks, Haider was becoming increasingly concerned about its performance. The MRI clinic was not meeting promises made by Haider and GE to scan patients at a rate of two per hour. The hospital’s administrators continued to complain about the MR machine’s low productivity, the strain resulting from the MR technologist’s heavy overtime schedule, and the loss of patient referrals from doctors within the hospital and in the surrounding community. Doctors expected to receive the transcription report within two days of their request. BCMC, Quinte MRI’s customer, was dissatisfied because the backlog had exceeded 14 days by early June and doctors had begun to refer patients to competing clinics to obtain more timely MRI scan results. On June 11, 2002, Haider asked Wright and Saskiw to address the problems. Wright and Saskiw were halfway through the two-year honors business program at the Richard Ivey School of Business, at The University of Western Ontario, London, Ontario. Both of them were seeking challenges in entrepreneurial environments and wanted to avoid positions in large corporate environments, which limited business exposure and responsibility. They viewed the opportunity of summer jobs at Quinte MRI not only as being consistent with this career goal, but also as an opportunity to assist Wright’s long-time family friend, Haider, by applying some of the tools they had learned. Although none of Quinte MRI’s employees had a job description, Wright and Saskiw understood that, as business development co-ordinators, their job was to establish new relationships with doctors and investors, review existing operations and make and implement recommendations to improve operations. MR TECHNOLOGIST Before operating an MRI machine, most MR technologists had earned a two-year degree in radiological technology. If the technologist planned to work solely with MRI, the minimum education requirement was a one-year MR technician diploma. In upstate New York, MR technologists earned approximately $32 per hour; MR technicians earned about $25 per hour.7 Employee benefits typically added an additional 20 per cent to salary figures. After earning a degree and finding employment, new MRI technologists were typically trained by their employer on its MR systems for about three weeks. Jeff Sinclair, BCMC’s sole MR technologist, was scheduled to work 40 hours per week, Monday through Friday, 7:30 a.m. to 4:30 p.m. The first half hour of each day was occupied with setup and debugging of the equipment, called “phantom scanning.” During May, Sinclair had worked an additional 40 hours at a rate of 1.5 times his regular hourly wage. Although the MR machine was scheduled for one scan per hour, 7As a comparison, in 2002, the United States Department of Labor established the minimum wage rate at $5.15 per hour. In upstate New York, an assistant for an MR technologist would earn about $10 per hour.

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it was not meeting that rate (see Exhibit 7). When Wright asked Sinclair about his productivity, Sinclair responded:

Due to poor communication between the patient and the scheduling department, many patients fail to show up on time or cancel their appointment at the last minute. At the other extreme, patients experience frequent delays at the clinic. Some wait as long as an hour before I can start the MRI scan. I alternate between sitting on my butt for an hour or two to running around frantically attempting to placate angry and impatient customers.

I’ve got to deal with a lot of mistakes in the scheduling department. Patients are booked at the wrong times and they aren’t being screened properly. I’m getting patients that shouldn’t receive an MRI — but they are scheduled and I have to deal with them. Since they had to take a day off work, they get angry when I send them home. And I’m sitting here twiddling my thumbs! The scheduling department really causes me a lot of headaches. They write down that I’m supposed to do scan A, but when the patient gets here, the form says do A and B. Another time there were only three appointments scheduled for a day, and the scheduling department thought the day was full because they couldn’t understand what other people had written on the form. The previous MRI provider handled all of the scheduling. Now, however, the scheduling department is expected to buck up and cope with the additional workload.

In addition to the scheduling department, I’ve got to put up with the radiologist. He wants the images right after each patient is scanned. There is no way I can do that. It takes way too much time. I do it when I have a slow moment.

I’ve been putting in a lot of overtime since I started here and, to be frank, I am getting sick of it. The money is nice, but I have a family and my son is experiencing some medical problems. I need to be there for him. I really don’t want any more hours.

Things are improving a bit, though. I was originally trained on equipment from GE, but during May, the clinic used a Siemens unit. It took me a while to get used to it. Now, we’ve got our GE equipment and I’m much happier with it.

Monica Zimmerman, manager of the radiology department, was concerned that Sinclair was working too hard and for too long. She was pressuring Wright and Saskiw to hire another MR technologist to alleviate Sinclair’s load and improve the lead-time. She believed that the most appropriate move would be to add a partial second shift in the late afternoon and early evening hours. In considering this option, Saskiw said:

Hiring another MR technologist is a big decision for Quinte MRI. While Jeff worked a lot of overtime in May, he hasn’t worked much overtime yet in June — even though we are doing more scans. Hiring another MR technologist would increase our costs, since we would have to pay $38 per hour plus benefits for someone to come in for the second shift, and it might mean more idle time. It would alleviate the problem of allowing Jeff vacation time, or leave for illness or other extenuating circumstances. As it is now, it would take a while to get an MR technologist through a temporary employment agency specializing in medical personnel, and we would have to pay at least $60 per hour. In addition, using that source would eliminate our control of quality. The bottom line, though, is that we lose

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over $6,000 in revenue for every day we are down. Whatever the decision, two things need to be considered — Quinte’s relationship with BCMC, which is getting fragile due to the backlog, and providing quality patient care. There is a shortage of good MR technologists, especially in rural areas, so I think it will be virtually impossible to find someone competent enough who would be willing to work part time.

In attempting to solve the problems at BCMC, Wright was focused on trying to find the bottleneck. From his reading of The Goal, he remembered a boy named Herbie, who hindered his boy scout troop’s ability to reach its destination quickly during a hike. Wright commented:

Finding Herbie is our first order of business. I know that if we can find out where he is, then we can take the appropriate action and make him more efficient. We are committed to keeping things simple and moving quickly because we are working within such a short time frame. I know decisions have to be made and action taken, and we can’t sit around waiting for Herbie to find us. We need to hunt him down. But, where is he?

We are tossing around the idea of developing a pay-for-performance system for Jeff so that he has an incentive to work harder and faster. Jeff is our most valuable asset at the clinic and he needs to be treated that way. We need to find a way to maximize his consistency so we are able to maximize the number of scans performed. I know we can grow the number of patients that we can handle in an eight-hour shift. But, if we continue to follow the same process, we won’t be able to continue to grow.

I am worried since we have only two days to provide a detailed action plan on how to solve the problem. Haider expects us to identify the problem and outline, in detail, the steps that should be taken to solve the capacity issues. He also expects us to make any additional recommendations to improve the performance of the MRI clinic. I wonder what would make sense here.

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Exhibit 1

AN IMAGE OF A 1.5-TESLA SHORT-BORE, HIGH-SPEED MRI SYSTEM

Source: GE Medical Systems.

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Exhibit 2

TYPICAL ANNUAL OPERATING COSTS OF AN MRI CENTRE

Leases Equipment $240,000 Building 50,000 Salaries and wages Radiologists 140 per scan MR technologist 60,000 Support staff 30,000 Office manager 45,000 Other Medical supplies 50 per scan Insurance 15,000 Leasehold improvements 10,000 Utilities 15,000 Advertising 15,000 Maintenance 110,000 Miscellaneous unforeseen expenses 100,000 Total annual operating expenses $690,000 plus variable costs per scan

Assumptions: Revenue per scan $700 Number of referred scans per year 1,600 Number of walk-in scans per year 600 Operating days per year 250 Effective tax rate 25%

Source: Quinte MRI files.

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0

50

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May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr

Exhibit 3

FORECAST OF SUSTAINABLE DEMAND FOR MRI SCANS AT BENTON-COOPER MEDICAL CENTER

Source: Quinte MRI files.

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Exhibit 4

LAYOUT OF THE RADIOLOGY DEPARTMENT

Note: This diagram is approximately to scale. Source: Hospital files.

Computer Room

Tech Room Hydraulic Ramp

Magnet Room

Change Room

Radiologist's Office

Scheduling Department

Waiting Room Reception Desk

Entrance

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Exhibit 5

TIME SCHEDULED FOR TYPICAL PROCEDURES, IN MINUTES Procedure Time Procedure Time

Abdomen with contrast 45 Lumbar spine with contrast 30 Abdomen without contrast 30 Lumbar spine without contrast 30 Abdomen with and without contrast 45 Lumbar spine with and without contrast 60 Bone marrow 60 Magnetic resonance angiogram (MRA), chest 60 Brain with contrast 60 MRA, abdomen 60 Brain without contrast 30 MRA, head with contrast 30 Brain with and without contrast 60 MRA, head without contrast 30 Breast, bilateral 60 MRA, head with and without contrast 45 Breast, unilateral 60 MRA, lower extremity 90 Heart 60 MRA, neck with contrast 30 Chest-mediast with contrast 60 MRA, neck without contrast 30 Chest-mediast without contrast 30 MRA, neck with and without contrast 45 Chest-mediast with and without contrast 60 MRA, pelvis 60 Cervical spine with contrast 60 MRA, upper extremity 90 Cervical spine without contrast 30 3-D reconstruction 15 Cervical spine with and without contrast 60 Orb, face, neck with contrast 60 Lower joint extremity with contrast 30 Orb, face, neck without contrast 30 Lower joint extremity without contrast 30 Orb, face, neck with and without contrast 60 Lower joint extremity with and without contrast 60 Pelvis with contrast 30 Lower extremity with contrast 30 Pelvis without contrast 30 Lower extremity without contrast 30 Pelvis with and without contrast 45 Lower extremity with and without contrast 60 Tempero mandibular joint 60 Upper joint extremity with contrast 30 Thoracic spine with contrast 30 Upper joint extremity without contrast 30 Thoracic spine without contrast 30 Upper joint extremity with and without contrast 60 Thoracic spine with and without contrast 45 Upper extremity with contrast 30 Upper extremity without contrast 30 Upper extremity with and without contrast 60 Source: Jeff Sinclair’s estimates.

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Exhibit 6

THE SCHEDULE FOR WEDNESDAY, JUNE 12

Note: The patients’ names, phone numbers and doctors have been omitted for reasons of confidentiality. Source: Company files.

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Exhibit 7

DATA ON PERFORMANCE SINCE STARTUP ON MAY 1, 2002 Date Number of Scans Number of Patients Rejected Hours Worked1

May 1 (Wednesday)2 2 8.0 2 (Thursday)2 5 2 10.0 3 (Friday)2 5 8.0 4 (Saturday) 0 5.0 5 (Sunday) 6 (Monday) 8 14.0 7 (Tuesday) 4 4 9.0 8 (Wednesday) 10 11.0 9 (Thursday) 6 2 9.0 10 (Friday) 4 2 7.5 11 (Saturday) 12 (Sunday) 13 (Monday) 7 2 9.5 14 (Tuesday) 9 9.0 15 (Wednesday) 11 1 11.5 16 (Thursday) 9 2 7.5 17 (Friday) 6 1 8.0 18 (Saturday) 19 (Sunday) 20 (Monday) 10 2 9.0 21 (Tuesday) 12 1 11.5 22 (Wednesday) 11 1 10.0 23 (Thursday) 13 2 11.0 24 (Friday) 10 2 9.5 25 (Saturday) 26 (Sunday) 27 (Monday)3 28 (Tuesday) 10 8.0 29 (Wednesday) 16 12.0 30 (Thursday) 7 6.0 31 (Friday) 10 2 12.0 June 1 (Saturday) 2 (Sunday) 3 (Monday)4 0.0 4 (Tuesday) 7 3 7.5 5 (Wednesday) 12 12.0 6 (Thursday) 12 2 12.0 7 (Friday) 6 5.5 8 (Saturday) 9 (Sunday) 10 (Monday) 14 1 8.5 11 (Tuesday) 14 11.0

Source: Company files.

1Overtime was calculated based on weekly, not daily, hours worked. 2From May 1 to May 4, Sinclair was conducting application and hospital safety training, in addition to his MRI duties. 3May 27 was Memorial Day, a national holiday. 4On June 3, the clinic was closed to allow for the removal of the Siemens MRI equipment and the installation, testing and training on GE MRI equipment.

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