On May 1, 2007, Eastman Kodak Company (Rochester, NY) sold its
Kodak Health Group to Onex Corporation (Toronto, ON). The new,
independently run corporation, now known as Carestream Health, Inc.
(Rochester, NY), instantly became one of the largest health imaging
and information technology (IT) companies in the world, with an
expected $2.5 billion in annual sales, operations in more than 150
countries, and more than 8,000 employees.
Carestream's Chief Executive Officer, Kevin J. Hobert, recently
about this new company and its plans for the future.
Now that the transition is complete, what is the first order of
Kevin J. Hobert:
Our first order of business is to get back to running the business.
We are putting together a Board of Directors. We've brought in a
number of functions for which we had previously relied on Kodak,
such as logistics, finance, and IT. We are making sure that we are
taking care of our customers. We are looking at aggressive plans to
grow the business.
What is the nature of the relationship between Carestream and its
new parent, Onex Corporation?
Carestream will be managed as an independent company. Robert M. Le
Blanc, the Managing Director for Healthcare for Onex, is going to
be the Chairman of the Board. So there will be a lot of interaction
with him. I and our Chief Financial Officer, Michael Pomeroy, will
sit on the Board along with a number of other independent
directors. Through this, we will interact quite a bit with Onex.
They have a lot of great ideas for us, and they have extensive
experience in mergers and acquisitions. So, we're going to them all
the time right now to get advice and ideas, and we're using them as
a sounding board for our growth plan.
Will this independence change the way the company is able to
Absolutely. Everything that we do in terms of strategy development
and investment will no longer be evaluated and weighed against
another business unit. Instead the questions will be: What is the
return? What is the opportunity? Are we creating value for
customers? Are we creating business value? If the answer is yes,
then we will move forward rather than having to evaluate ideas
within the overall context of a larger company. We no longer have
to trade off our opportunities against other opportunities within
Will the company headquarters remain in Rochester?
We do business in 150 countries around the world, and our revenue
is spread out around the world. We have a portion of our employees
based here in Rochester and many of our business units are
headquartered here, and we'll maintain that. We are doing some
upgrades to the facilities, many of which are just to separate
utilities and other things that are shared across several buildings
within the Kodak complex.
How will this change in corporate structure affect customers?
Our customers can expect the same level of service and commitment
that they have had from us for the last 110 years. Nothing is more
important to us than our relationships with our customers. I think
that this change will result in a net benefit to our customers
because we are embarking on a more aggressive growth strategy for
the company that will involve enhancing and expanding our portfolio
of products and truly investing in this business. We've been
investing in research and development (R&D) over the last
several years at a very high rate, but now we have even more tools
and opportunities to drive growth.
How are the business units organized within Carestream?
The basic business units are the medical market and the dental
market. We are the number-one dental film provider worldwide, and
we have the largest installed base of dental digital imaging
equipment and dental digital radiography. We also have the largest
installed base in the world of dental practice management systems.
In addition, we manufacture and sell a number of other imaging
technologies such as intraoral cameras. So serving the oral
healthcare market is one part of our business.
On the medical side, we provide solutions designed to help our
customers move from film and paper to an all-digital workflow
within imaging departments and to improve the cost and quality of
care through this transition. We offer all of the analog film
products. We're the number-one provider of analog film in the
world. We offer printers and the film that goes with them. We offer
products that replace film in imaging departments-computed
radiography (CR) and digital radiology (DR) products-and we offer
IT products that help to convert imaging departments to digital,
such as integrated radiology information systems (RIS) and PACS,
storage solutions, information management solutions, and
professional services to help our customers implement this
technology and get the results that they are looking for in terms
of cost and quality improvement.
We also have molecular imaging systems on the medical side of
the portfolio. We are focused mainly on optical molecular imaging,
serving the research and preclinical healthcare market.
Do you foresee medical imaging becoming truly filmless and
It's hard to say that anything will actually become paperless, but
I've heard people say that the most dangerous item in the hospital
is the pen. The trend is toward the digital exchange of information
and certainly toward digital imaging. Digital technology provides
many benefits in terms of improved access to care, better cost of
care, more integrated care, and the ability to take all the data
that is currently in various file cabinets and systems around the
hospital and bring it all to the care provider. I do see a time
when healthcare will be filmless. But paperless? Probably
not. The data will be stored electronically and exchanged
electronically, but people may always print to paper for easy
display and sharing of data.
What is the role of film today in medical imaging?
Film provides a really nice system solution. With a relatively
inexpensive processor and film, you can capture images, display
them, store them, and share them. It's a low-cost solution that
doesn't require a lot of training or infrastructure. So as
countries around the world are growing and building their
healthcare systems, a lot of them are using film. In emergent parts
of the world, we want to find ways to develop cost-effective
solutions, training, financing, and everything else needed to
implement these systems so that they can offer better access to
There are also many customers out there using film because, to
date, it has been difficult to find the value proposition that can
lead them to digital. We've been developing digital solutions for
years, and they are getting better and better. The standards are in
place, and the costs have come down. Benefits are proven now in
cost and quality, so our goal is to lead customers away from paper
and film to an all-digital workflow.
Film is an important part of our business, but we want to
provide our customers with the best possible solutions, so we are
investing only in developing digital solutions for our
Kodak had been instrumental in China's Million Women Breast Cancer
Screening Project. Will Carestream continue that?
China is expanding access to healthcare at a rapid pace, and they
are building their first mammography screening programs. We are
providing film, film processors, CR systems, storage solutions, and
training to help China expand mammography screening. We have been
working with the Ministry of Health and the government of China to
ensure that the program is successful.
Will we continue to see the Kodak name in medical imaging?
Absolutely. We have access to the Kodak name, and we will be using
it in our products. Our company is no longer the Kodak Health
Group, but we sell Kodak digital imaging products and have full
access to the brand.
What would you say is the overall mission of Carestream Health?
Our stated vision is "to change the landscape of healthcare for
future generations by providing solutions that dramatically improve
the quality and cost of care" and "to build the value of our
business through a passionate, customer-driven global team." We
want to transform the future of healthcare and enable our customers
to improve the quality and cost of the care they provide. We want
to grow the value of our company with a dedicated team focused on
the needs of our customers.