The Health Imaging Group’s president shares his views on differences in corporate cultures, PACS offerings, and other pressing industry issues

Dan Kerpelman is the president of Kodak’s Health Imaging Group and senior VP of Eastman Kodak Co (both of Rochester, NY), a position he’s held for just under 2 years. Kerpelman brings almost 17 years of management experience in medical imaging to his current position, which entails responsibility for developing strategies, growth opportunities, and the day-to-day operations for Kodak’s second-largest business. Previously, Kerpelman was with GE Healthcare, most recently as general manager of the global diagnostic X-ray modality. Fluent in Italian and French, Kerpelman has a number of academic degrees from France and the United States, including an MS from Rensselaer Polytechnic Institute (Troy, NY) and an MBA from Northwestern University (Evanston, Ill). With his global insight and extensive industry experience, Kerpelman is leading Kodak’s Health Imaging business to new frontiers.

You’ve spent a significant amount of time abroad, especially when working for GE Healthcare. How has living and working in Europe influenced your philosophy on global adoption of digital imaging technologies?
I’ve had the opportunity to experience different healthcare systems, each with unique approaches to the conversion to digital imaging and information management. Japan and France, for example, have reimbursed digital procedures sooner than other countries. Germany has been very studious and methodical about all of the issues associated with digital before pulling the trigger. And the United States is largely private, more competitive, and based on a more individualist approach. So the influence all of this has on me has been to simply recognize that one size doesn’t necessarily fit all. To be successful, you need to either focus on the common denominator or focus on regional variance. Concurrently, it has helped me understand the commonalities, and many exist, to enable more efficient product portfolio development.

Have you noticed any differences in US corporate culture versus that of Europe, and are the relationships with customers different?
If I were to talk about business in general, I’d say absolutely yes. Because Europe’s been around for a longer time socially, some traditions do apply. For example, it’s typical for a relationship to be established on a personal level before engaging in business discussions, particularly in some of the Mediterranean cultures. Although in healthcare, it’s such a global village that everybody knows everybody else. Second, the members of the profession expect strong, long-lasting relationships everywhere in the world, and US radiologists want to make sure they’re dealing with people they know and can trust. So in this case, the United States looks more like Europe. Still, US companies are quicker to sign agreements and partner with one another, showing more speed and decisiveness than in Europe, where relationships typically are forged for a longer period of time. Of course, for every rule, there are hundreds of exceptions.

Converting to digital and PACS is a sizable financial investment for a facility, which is why it can take years for these purchases to reach the top of the budget. What advice would you offer to radiology administrators who are battling the CFOs?
The key point is to not look at the equipment and software cost in isolation. For example, if you compare owning a PACS to not owning a PACS, obviously all you see is the purchase cost without any recognition of the benefits derived from ownership. What you really need to look at is what you are gaining in terms of overall life-cycle productivity and clinical value. Are you, for instance, increasing patient throughput and, therefore, getting more reimbursements? Are you able to detect and diagnose disease sooner and more often, avoiding greater costs to treat the disease downstream?

An example that illustrates what I mean is the emergency room, where we sell many DR systems. Having the ability to image in the department, to transmit the image electronically to wherever the radiologist is at that time of day or night, and to then receive an instant report back from the radiologist is obviously a great example of productivity. Still, as facilities look to cost justify the investment in PACS, they must look at the cost of nonquality—the cost of lost images; the cost of delays when critical images and other data aren’t readily available at the point of care; the cost of having to reschedule exams and of associated patient wait times; and so forth. PACS can help reduce or eliminate the costs associated with nonquality, and it’s important to quantify this aspect when presenting cost justification to the CFO.

Additionally, there are all kinds of ways to optimize the financial structure of a project to more quickly achieve desired benefits.

Some radiologists and other PACS users have claimed that these systems overpromise yet underdeliver. What are your thoughts as the manufacturer?
Actually, I would argue that Kodak might be a little bit of an exception to that rule. I sometimes criticize my own team for underpromising and overdelivering. In other words, many providers announce a product as soon as their engineers come up with a neat idea, and then it’s a long time before it hits the market. And as with many engineering projects, the scope changes so that by the time the product does get to market, it’s not quite all it was supposed to be. Kodak tends to be conservative in this regard, opting to announce products only after R&D and testing have been completed, start to finish. Sometimes, that has put us at a disadvantage, because we’re competing with those who are talking about their products sooner. Now, are there glitches when we do installations? Of course we’ve had such situations, and we view those occasions as learning experiences. But largely, we’ve been very careful not to announce products until they are thoroughly tested and ready for market, and then we try to deliver what we’ve announced.

The past few years have been big for Kodak in terms of acquisitions, including MiraMedica (known for CAD), Front Porch Digital’s DIVArchive software, and Algotec Systems (known for PACS). How have these acquisitions been integrated into Kodak, and what is the benefit to end users?
These acquisitions were primarily technology plays. For example, we’d been working with Algotec for 18 months before the acquisition in an OEM partnership to develop our next generation of PACS. Consummating that relationship with an acquisition was a logical next step. FrontPorch and MiraMedica offered a way to accelerate bringing complementary technologies into our portfolio, rather than continuing to do all the development work on those technologies in-house. Now, our portfolio contains a mixture of products that we developed internally along with those that we acquired. This approach delivers what our customers want, which is “more and sooner” in terms of offerings that are complementary to our fundamental imaging and services solutions.

Along that same line, what is your view on this industry, which can appear to be unbalanced in terms of the largest quantity of products and technologies coming from a small number of companies, like Kodak, Agfa HealthCare, and Fujifilm Medical Systems?
I’m not sure it’s such a small number. If you look at the portfolios of all three companies, each of us provides PACS and CR solutions. As PACS players, we compete not only with the modality companies—Siemens, Philips, and GE Healthcare, who offer PACS—but also with the many healthcare IT specialist players, such as Cerner, McKesson, and IDX Systems. In the CR arena, some of the modality companies compete by offering CR systems on an OEM basis, so it’s not just Kodak, Agfa, and Fuji competing in this segment of the market. And in Kodak’s case with DR, we’re also competing with the modality companies who offer such systems. By virtue of expanding beyond pure imaging, I think the playing field is a little more crowded. But there’s plenty of room in the industry for multiple players. Imaging continues to grow in its complexity, not shrink.

What do you think are the three most pressing issues in imaging today?
First of all, there’s a race for new technology, because medical imaging is such an effective, life-saving technology. But the consequence is that more and more information needs to be processed by a finite number of people (ie, radiologists). With thousands of slices coming out of a CT exam, versus 10 some years back, the same number of radiologists are experiencing information overload. And it comes in all different forms—new modalities are coming out all the time, and there’s a lot of focus on molecular imaging. Obviously, it’s an opportunity for manufacturers to provide tools that help deal with all of that information to ensure productivity and quality outcomes.

The second issue—and there’s growing consciousness on it all around the world—is the pressure on quality and outcomes. The concern some years back was just to get the basic imaging capability installed; now there’s similar pressure on quality of outcomes. On one hand, technology growth enhances that concern, but it challenges it on the other. There’s still the same number of people trying to process all of this sophisticated information. And you know what they say about IT—it can take a good process and make it better; but it also can take an inefficient process and make the user better at being inefficient (ie, make the same mistakes faster). So it’s not a guarantee of quality if it’s not used correctly.

The third issue is a little sticky. It’s the challenge of allowing medical decisions to be made by medical professionals and not by others who have different, not necessarily medical agendas. For example, there’s a bit of a public relations campaign going on by some large payors claiming that advanced medical imaging technology is bad, that it’s the root of all evil from a cost standpoint, and that it’s being overprescribed. I think that’s a shame, because it distorts the real story. It doesn’t tell the story about the cost of not imaging and, therefore, not diagnosing and detecting early enough and, therefore, the much greater cost of more dramatic treatment downstream. What we have is not necessarily medically motivated folks taking very strong and vocal positions on how to do medicine. Obviously, healthcare is in the public agenda, it always is, and it probably always should be, to a large extent. But not to the extent that decisions, which should be made by trained clinicians, are being made by people who have other, less patient-centric agendas.

In what direction do you see the medical imaging industry heading?
First, I see it going from a diagnostic role to a more predictive role, especially with the advent of molecular imaging. We’ll try to use imaging to not only study anatomy and determine the presence of existing disease, but also to study molecular structures and even genetic attributes to understand the patient’s predisposition to disease before it occurs.

Another trend is the era of the specialist. Twenty years ago, if something was wrong, you went to your family doctor, who knew it all and did it all. Today, you go to 17 specialists. The evolution related to imaging is that, in certain instances, more and more specialists are taking on imaging themselves rather than referring cases to radiologists. Obviously, that’s a subject of great debate. I actually think it can be positive when done correctly. Physicians of other specialties, provided with the proper tools, can handle some of the more repeatable types of diagnoses. For example, I don’t think you need to be a world-class radiologist to detect a compound fracture in an arm. A skilled orthopedist with adequate training could handle that.

Obviously, it’s up to the healthcare profession to allow that evolution of imaging to other specialties to occur in a responsible way. It shouldn’t be motivated by economics. Many physicians do it because they want to get the reimbursement in their office rather than send it down the street to the radiologist’s office, and that’s not the right reason. But when it saves the patient time and unnecessary stress, it’s not a bad thing. Plus, what it does for radiologists is free them to deal with the most complex problems using highly specialized tools. I actually believe that this shift serves both parties well: It allows radiologists to focus on the most demanding diagnostic needs while enabling physicians to handle diagnoses of more common diseases or injuries. And it can take cost out of the system and improve the patient experience.