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At the helm of a rapidly rising business

Diana Nole does not yet head Carestream Health Inc.’s biggest division. But if she stays in her current job, she is likely to do so soon.
Nole, 44, is president of Carestream’s digital medical solutions business, the company’s fastest-growing segment.
Created in 2007 with the spinoff of Eastman Kodak Co.’s former health group, the Rochester-based Carestream is in the medical imaging business. As a Kodak unit, its main business for many years was manufacturing X-ray film for medical and dental users worldwide.
Medical imaging technology increasingly is digital. But doctors and dentists still use a lot of traditional X-ray film and equipment.
Nole declines to say what percentage of the privately held Carestream’s approximately $2.5 billion in annual revenue is accounted for by the digital unit. The company still sells more traditional X-ray products than digital, Carestream spokesman Robert Salmon says. But the market for traditional X-ray is contracting while digital imaging products are expanding.
Carestream employs some 1,400 people locally and 8,000 worldwide. Nole is based in Rochester.
The organization Nole heads encompasses roughly 3,000 workers worldwide. She travels regularly to the company’s facilities and to make contact with customers in Europe, Asia and the Middle East.
While the United States remains the single biggest medical imaging market for Carestream and competitors such as General Electric Corp., Agfa A.G. and Fujifilm Corp.’s Fujifilm Medical Solutions USA Inc., some of Carestream’s biggest customers are foreign.
While the United States and Canada remain Carestream’s biggest markets, Nole says, it is in some ways easier to sell elsewhere.
Virtually all other developed, industrialized countries and many developing ones have national health systems, she says. And a sale to a single national health customer often means getting a lot of product into many hospitals and clinics. In Scotland and Israel, for example, Carestream has a healthy relationship with government-run or government-connected health systems and large installed bases.
In the United States, a patchwork of privately run non-profit and for-profit health systems and private physician groups, individual sales seldom have quite the bang for the buck. But Carestream does have equipment in U.S. health systems, including the University of Rochester Medical Center’s Strong Memorial Hospital and Rochester General Health System’s Rochester General Hospital.

The digital business

Digital medical solutions break down into two broad categories: equipment and supplies, and software systems, Nole says. The equipment and supplies category in turn breaks into two subcategories: computed radiography and digital radiography.
Roughly half of the Carestream unit’s sales come from computed radiography, a transitional technology known as CR. Digital radiography is known as DR. The highly specialized computer and software systems adapted for medical imaging and for storage and retrieval are known as RIS/PACS, acronyms for radiology information systems and picture archiving and communications systems.
Carestream makes and sells equipment, supplies and software systems for DR and CR. Though it has been independent from Kodak since 2007, Carestream’s equipment is sold under the Kodak brand name. Part of the $2.5 billion that the company’s Toronto-based owner, Onex Corp., paid for Carestream was for the right to keep using the Kodak brand.
Carestream does not make or sell big equipment such as the full-body CT and MRI scanners used in hospitals and large clinics, which cost $1 million or more. Its imaging units are smaller and less expensive, so its markets extend to smaller practice groups as well as to larger hospitals and clinics.
The company ranks No. 2 in CR, with a 24 percent share of the global market, Nole says. In DR equipment, Carestream ranks as the fifth-largest global supplier with a 7 percent share. It has roughly the same position in RIS/PACS.
“I keep telling my team: ‘There’s no reason why we can’t we have a 20 percent share in the DR market,'” Nole says.
Digitally captured medical images are more versatile than photochemical pictures and can be directly stored on computer hard drives-strong incentives for users to convert to digital. But making the conversion had required making a complete break from traditional X-ray and installing a new suite of costly equipment.
A new DR product that Nole is excited about is the DRX-1, a wireless digital cassette system that lets users adapt traditional X-ray systems for digital use. The single-size DRX-1 cassette was developed at Carestream’s Rochester-area research and development facility and introduced commercially last year. It provides a relatively inexpensive way for users, such as small private-practice orthopedic groups, to move into digital for less than the $500,000 to $600,000 they would otherwise have to invest.
“DRX will mean a lot more retrofitting,” Nole predicts. “People can convert to digital for one-third of what it would cost them to do a full conversion, and nobody else has anything like it.”
Ken Rosenfeld, president of eHealth Global Technologies Inc., concurs. A former Carestream employee who once worked under Nole, Rosenfeld is the chief technology officer for a Brighton-based firm that helps hospitals and health systems manage medical imaging information.
“My guess is the DRX will have good acceptance in the industry,” Rosenfeld says. “It relieves staff of several steps in the process.”
Unlike CR cassettes, Rosenfeld says, DRX plates do not need to be removed and placed in a reader to get information onto a hard drive. And where CR cassettes need to be wiped before they can be reused, the wireless DRX cassettes can send information and be reset with a keystroke.
Other products Nole’s unit has developed, such as a lower-cost archiving alternative, would serve Carestream well in the current economic environment, positioning the company to maintain sales if not grow, Rosenfeld believes.
“It’s probably true that health care is somewhat recession-proof,” Rosenfeld says. “But hospitals are also having to cut back on expenses, including equipment. It doesn’t hurt to be a supplier of lower-cost equipment.”
Rosenfeld left Carestream some six months before its spinoff from the photo giant. He sees Carestream as less encumbered and able to move more nimbly than it was under Kodak. He also sees Nole’s unit as being at the forefront of Carestream.

A start at Kodak

Nole agrees that life in many ways is easier for Carestream as a private company. But Nole, who started working for Kodak out of college and spent time in several Kodak divisions before landing in the health group, has no unkind words for the former owner.
“One great thing about working for Kodak is that they handed you a lot of opportunities,” she says. “It was really good preparation for being a general manager.”
Rosenfeld recalls Nole’s managerial style as low-key. She was not an intimidating boss, he says, but was clearly competent and always definite and firm in making her wishes and policies clear.
Nole started at Kodak as a systems analyst after graduating from SUNY College at Potsdam in 1987. She had majored in computer science and math.
“Kodak was very well known; their salary was competitive, and I knew several classmates who had gone there who spoke very highly of it,” Nole says.
The idea of living in Rochester, “the biggest place I’d ever been,” appealed to her.
Nole was born in Michigan and grew up mostly in Missouri and Iowa. Much of her childhood was spent in the small towns of Warrenton, Mo., and Knoxville, Iowa. Her father was a manager for Continental Telephone Corp., which was then the country’s third-largest independent non-Bell telephone company. Nole’s mother was a homemaker.
The telephone company later changed its name to Contel and then was acquired by GTE Corp. Nole’s family then moved to Gloversville, a Fulton County town of 55,000 in New York’s Leatherstocking Region. Nole, who has a brother and a sister, is the youngest of the three.
After her father retired, her parents, who had been living in the Albany area, moved to Penfield, where they still live. Her sister also moved here and is a nurse at Highland Hospital.
Nole describes her first systems analyst job at Kodak as a somewhat Dilbertian experience: “I was sitting in a cubicle, working on systems all day, and I thought: ‘It’s going to be a long, long life.'”
After three years in systems analysis, she transferred to a position as a warehouse supervisor, which she found surprisingly enjoyable. After three years, Kodak transferred her to Florida as part of a companywide restructuring. In Florida, Nole worked in film production, a move she says “seemed kind of illogical” but was interesting, nevertheless. In 1997, the company moved her back to Rochester in an engineering management position.
At that point, she says, “I got more concentrated about my career.”

MBA and marriage

Shortly after returning to Rochester, Nole started working toward an MBA at the University of Rochester’s Simon Graduate School of Business. She completed the program in 2001.
While she was at the Simon School, Nole, then a thirtysomething, complained to classmates about the difficulty of meeting eligible men. Two male classmates fixed her up on a blind date, and a year later she was married. She now lives in Pittsford with her husband, Angelo Nole, a commercial real estate broker with C.B. Richard Ellis’ Rochester office.
Because she was working toward her MBA, the couple planned their honeymoon around her work and school schedule, delaying the trip so Nole could take an exam. Now married nine years, they have no children.
The Noles take frequent jaunts to Utica, where Angelo Nole is from and still has family, spending a fair number of weekends watching nieces’ and nephews’ sports events. She enjoys golf, Diana Nole says, but does not get out as much as she might like. She sits on the SUNY Potsdam Foundation board and has served on the Hillside Family of Agencies board since 2001, until recently as vice chairman.
Nole moved to the Kodak health group roughly a year before its spinoff. She came in as chief of operations for the group’s U.S. and Canadian operations, the largest sales organization. She next moved to director of business strategy and marketing for the health-care information solutions unit, where she oversaw the unit’s R&D and marketing. Her present position came with the merger of the information solutions and digital capture units.
Kodak’s intention to sell the health group did not become fully clear until roughly six months before the spinoff, Nole says. When the photo giant started to shop the health group to potential buyers, Nole and Kevin Hobert, now Carestream CEO, were part of the presentation team.
In the transition to an independent company, Hobert says, “Diana has played a lead role in forming and reinforcing our culture. Her talent and hard work have contributed to our initial achievements and will help ensure our future success.”
While she acknowledges a debt to Kodak, Nole says the spinoff was good for Carestream. The company, for example, no longer has to cut into its budget to help cover expenses such as the cost of Kodak’s Summer Olympic Games sponsorship, a levy that, she says, was not cheap. Disengaging from the photo giant involved a good deal of customer handholding and behind-the-scenes reassurance of her staff, but Nole is happy with the change.
“I think it worked out absolutely best for everybody,” she says.
rbj@rbj.net / 585-546-8303

Diana Nole
Title: President, digital medical solutions, Carestream Health Inc.
Age: 44
Education: B.A. in math and computer science, SUNY College at Potsdam, 1987; MBA, University of Rochester Simon Graduate School of Business, 2001
Family: Husband Angelo Nole
Residence: Pittsford
Activities: Time with family, golf
Quote (on Carestream’s spinoff from Kodak and acquisition by Onex Corp.): “I think it worked out absolutely best for everybody.”

05/01/2009 (C) Rochester Business Journal

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