Cleveland Clinic-partnered low-cost MRI provider nabs $6.5M to kick off national expansion

Wisconsin-based Smart Choice MRI hopes to start a low-cost revolution for magnetic resonance imaging (MRI). The startup already has 6 Wisconsin locations where it charges $600 or less for an MRI, as compared to the Wisconsin average, which the company said is almost $3,000. Smart Choice MRI shaves those costs down by not housing its own radiologists--it has a deal with the Cleveland Clinic to provide radiologist interpretation of its MRI images.

The company started in Milwaukee, WI, in early 2006 and now has more than 2,500 referring physicians. With this latest cash infusion, it will kick off what it hopes will be a national expansion by moving into the Chicago area.

"With consumers assuming more of their medical expenses than ever before, they want to know their options. They deserve a choice," said Smart Choice MRI CEO Rick Anderson in a statement. "We are changing the way healthcare is delivered, starting with complete price transparency at a fair rate. Our investors share this vision, enabling us to achieve this significant milestone. With 6 clinics to date, Smart Choice MRI will now be able to significantly expand its footprint outside of Wisconsin."

The company noted that consumers are increasingly responsible for healthcare costs, with a rising absolute amount and consumer share of deductibles. That gives them an incentive to shop around for the best deal, particularly when it comes to diagnostics and imaging services that are increasingly becoming commodity businesses.

Milwaukee-based F Street Capital, led the financing with $2.5 million, alongside a group of undisclosed legacy and new investors.

"It's clear to us that Smart Choice MRI is on the leading edge of a new era of healthcare--one that empowers patients," said F Street Capital Managing Partner Todd Gruen. "The changes in our healthcare system have fueled consumers who demand to understand their options--quality at a fair price has never been more important."

- here is the announcement