Mequon-based Smart Choice MRI has received a $7 million investment from Chicago-area health system Edward-Elmhurst Health.
Smart Choice has built a clinic network on a flat fee model, in which it provides an outpatient MRI for $600 or less. The company says it is one of the most affordable MRI providers in the country. According to the Wisconsin Hospital Association, the average cost of an MRI is $2,948. The company in December raised a $6.5 million round led by Milwaukee-based F Street Capital LLC to fund its national expansion, and in February received a $3 million investment from Appleton-based ThedaCare for the same purpose.
Edward-Elmhurst Health operates three hospitals—Edward Hospital, Elmhurst Hospital and Linden Oaks Behavioral Health. Its main campuses are in Naperville and Elmhurst, Ill. The company has more than $1 billion in total revenue and more than 50 locations and about 7,400 employees.
Using the Edward-Elmhurst investment, Smart Choice will fund the groundbreaking of its continued expansion in the Chicago area. It plans to begin building clinics in Bolingbrook, Oswego and Lombard in the fall. Smart Choice already has three Chicago-area clinics, in Schaumburg, Glenview and Skokie, and has another clinic planned for downtown Chicago in July. It will also begin offering services in the Minneapolis area, with four clinics in the works in that city.
The company started in Wisconsin, and has locations in Milwaukee, Sheboygan, Richfield, Waukesha, Kenosha and Appleton. Rick Anderson, chief executive officer of Smart Choice MRI, said he hopes to open Madison and Green Bay clinics in 2017.
“We’re typically looking for our markets where there’s a great disparity between the lowest cost MRI provider in town and the highest cost MRI,” Anderson said.
Nationally, Smart Choice is also considering expansion into Denver, Indianapolis and Salt Lake City.
“The forward-thinking health systems in those markets are what we’re looking for. I think at the end of the day, Smart Choice is something that should be in every market,” Anderson said.
As part of the $7 million investment agreement, Edward Hospital president and chief executive officer Bill Kottman will join the Smart Choice board on July 1 to represent Edward-Elmhurst’s system interest in the partnership.
“A major market shift is occurring in the health care industry that’s driving more value-based medicine and consumerism, safe and effective care at a reasonable cost that also recognizes patient choice. The most forward-thinking hospital systems are responding to that shift by forging unique partnerships that better serve people,” Anderson said. “We’re proud to partner with Edward-Elmhurst. They understand that offering a high quality health care choice to its community benefits everyone.”
“This new partnership is in line with our mission to always advance the health of our communities,” said Pam Davis, system CEO for Edward-Elmhurst Health. “With our commitment to improvement, collaboration and innovation, this investment in Smart Choice MRI will provide greater service and choice to our patients as well as improved efficiency within our System.”