Smart Choice MRI gets investment from Colorado health system

Company moves headquarters to Chicago

Smart Choice MRI
A scanner at a former Smart Choice MRI clinic.

Last updated on July 2nd, 2019 at 09:19 am

Smart Choice MRI announced today it has received an undisclosed investment from Colorado-based UCHealth and plans to expand nationally with new clinics. 

The company, which recently moved its headquarters from Mequon to Chicago, has 17 clinics in Wisconsin, Illinois and Minnesota.

The investment from UCHealth, a system that includes seven hospitals and more than 100 clinics, is Smart Choice MRI’s largest to date, said Rick Anderson, chief executive officer of Smart Choice MRI. It’s the third hospital system to invest in the company since late 2015.

“We’re excited UCHealth has chosen to partner with us and provide us with our largest capital infusion to date,” said Rick Anderson, chief executive officer of Smart Choice MRI. “When it comes to health services, consumers want more control over their expenses and options. UCHealth understands this movement, and its investment will help us increase consumers’ access to a new experience in MRIs.”

Smart Choice has plans to expand regionally and nationally over the next five years, including adding new locations in the Denver area, Anderson said. 

Anderson said the company also has plans to build clinics in La Crosse and Green Bay, and possibly add more clinics in Illinois.

Smart Choice currently has six locations in Wisconsin, eight in Illinois and three in the Minneapolis/St. Paul area.

With its expansion into the Illinois market, the company added offices in Chicago, which now serves as its headquarters, Anderson said. It still has an office in Mequon, which houses about 35 employees.

“It’s not moving our business from Wisconsin to Chicago — it’s just an expansion,” Anderson said.

Smart Choice MRI has built its clinic network on a flat fee model, in which it provides an outpatient MRI for $600 or less. 

“The reality is health care is incredibly expensive and it’s being borne on the consumer now more than ever before,” Anderson said. “So the self-insured employers and the employee are having to make shopping-based decisions … You wouldn’t go buy a car and just drive it home, put it in your garage and then get the bill later and find out how expensive it was. You want to know what you’re spending. And I think health care is becoming that now.”

Another advantage, Anderson said, is the proximity of its imaging clinics to popular franchises — clinics are often placed near a Starbucks or FedEx, for example — rather than on a medical campus.

“We’re meeting people on their terms where they want to receive care,” he said.

The company has raised $22 million in capital investment from hospital systems and strategic investors to date. 

In May 2016, Smart Choice MRI received a $7 million investment from Chicago-area health system Edward-Elmhurst Health. In December 2015, the company raised a $6.5 million round led by Milwaukee-based F Street Capital LLC to fund its national expansion, and in February 2016, it received a $3 million investment from Appleton-based ThedaCare for the same purpose.

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