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GE OEC 9900 Elite

DOTmed Industry Sector Report: C-Arm Sales and Service

by Keith Loria, Reporter
This report originally appeared in the April 2009 issue of DOTmed Business News

May 5 of 2008 was a monumental day in the C-arms world, as for the second time in as many years, GE Healthcare and its OEC surgery business rocked the very foundation of the entire C-arms landscape.

Let's rewind back to January of 2007 when the FDA revealed that the current good manufacturing practices with the OEC C-arm were deficient at two OEC facilities, which resulted in a consent decree that effectively shut down shipments of the industry-leading OEC products, including the 9900 Elite C-Arm System, 9900 Elite NAV C-Arm System, 9800 C-ARM System, 2800 UroView System, 6800 MiniView System, Insta-Trak 3500 NAV System and ENTrak 2500 NAV System.

While this may have seemed like good news to the other OEMs, the sudden influx of orders created some chaos and supply problems. Philips came away with the lion's share of the business thanks to their introduction of their new generation of C-arms, which included the Pulsera, offering 3D imaging.

Philips BV Pulsera



"Just when we finished developing Pulsera to the new platform, GE had the consent decree and shut down operations for 18 months," says Scott Burkhart, Vice President of general X-ray for Philips. "Three years ago we were a relatively minor player and we really set about to fix image quality and be world class in image quality, which was accomplished."

But everything changed again last May when GE/OEC was cleared to release some of its product and began manufacturing the popular OEC 9900 C-Arms once again. Even though they have still yet to get clearance for their vascular or mini C-arms, their return has changed the entire marketplace for both new and refurbished equipment once more.

"We came back in May with the OEC 9900 Elite, the most reliable product in our history, and sales have been great," says Elizabeth Usher, Chief Marketing Officer for GE Healthcare Surgery. "We see growth in the market in 2008 primarily driven by our re-entry."

In the full size C-arm market, GE reports high single-digit market growth and the capture of more than 40% share of this specific segment in 2008, climbing even higher in the year's final quarter.

"That trend is very encouraging and speaks to the quality and reliability our customers see in the product," Usher says. "In today's economy, it is reasonable to anticipate some pressure in the market, but given C-arms are used in critical surgical procedures and that these surgical procedures are growing with increasing focus on minimally invasive approaches, we continue to anticipate growth."

Not to say that the other OEMs are hurting. Although they may have been caught off guard when the original stopgap was announced, over the past two years many of them have better positioned themselves into the market and even with the reemergence of GE, have continued to be successful.

Siemens Medical Solutions had a very profitable year by gaining popularity with their Artis zee system, which uses contrast media for spatial visualization of blood vessels. Without competition from GE, Hologic picked up about 90% of the mini C-arm business - more on that later. Meanwhile, Philips took control of the vascular part of the C-arms business and will soon release their new flat plate technology.

"Our market share skyrocket and our reach into the market skyrocketed and we had a free run at the market for 18 months. We took advantage of it and that made us a much better company in terms of operations, quality and procedures," Burkhart says. "Philips has inherited the vascular end and when we come forth with this flat plate technology, we will have not only inherited it, we will have refined it. The customers who have seen the platform and seen the images are excited about that."

At the time of the GE shutdown, industry experts pegged them as having held 70% to 80% of the market. That percentage now stands at closer to 50% to 60%; not bad for a product that has been gone for so long.

"We had many customers who have been waiting for us to come back into the market and I think we have been welcomed with open arms," Usher says. "The OEC 9900 Elite has a strong following in the U.S market and meets the surgeons' needs in a number of surgical specialties."

Domino Effect

It's not just the OEMs who were affected by GE/OEC, as the refurbished market for C-arms had to deal with less inventory, which was bad for business.

"In the last 6 months to a year, the supply has been slow and the demand has been high so prices have been high for everyone-the end users, dealers, everyone involved," says Robert Serros, Jr. President and CEO of Amber Diagnostics. "GE had such a large market share and has a lot of loyal OEC buyers who were willing to wait. When they are not selling new, people aren't buying; there are no trade-ins and nothing coming in on the used equipment market."

Bill Adkins, President of National X-Ray Corporation, based in Palmetto, Fla. has a 5,000 square foot warehouse for parts, but has seen a drop in sales over the past two years on equipment.

"Two years ago it was just incredible," Adkins says. "Before OEC had their problem, we would get a truck load of C-arms a month. At any given time I could have 20 to 25 C-arms in the shop. Now, we're talking a handful. The used market is still not back to where it used to be. Our volume has dropped drastically since the OEC shutdown. The amount of used C-arms in the marketplace has been reduced quite a bit in the past two years."

GE resuming shipment of C-arms has increased the supply of used systems available, decreasing the wholesale price to pre-shutdown levels.

"Since the gates have been opened up with OEC there's been a good influx of good equipment and prices have come down substantially. That's good for everyone," Serros says.

Russ Surratt, President of Bighorn Biomedical Services, Inc. in Wyoming isn't so sure. While the company has done anywhere from 60 to 120 C-arm refurbishments in the last five years, he sees GE's return as a bad thing for business.

"When OEC was down we sold a whole bunch and now that they are delivering again, we aren't selling as many," he says. "OEC is doing everything they can to get business so that includes price and offering a much better warranty."

Surratt's business is concentrating on the vascular and mini C-arms for now, but once GE is cleared to distribute those, he expects another drop.

The economic crisis has also played a role in the refurbished market. You might think that people looking to save money would be good for the refurbished market, which offers prices at as much as 70% cheaper than new, but the financial uncertainty has been felt by all.

"It seems like the smaller clinics do not have the money to spend or are just unwilling to part with it," says Adkins. "Many doctors that I know have personally lost quite a bit in the stock market; therefore they appear to not be willing to risk their remaining funds even on their own business."

The refurb process

Amber Diagnostics sold about 80 to 100 refurbished C-arms last year, and have a very stringent refurbishing process.

"When it first comes in, we do proper inventory and assessment of the machine. From that point, it gets disinfected and is totally stripped down with all major components taken off the machine and disinfected again because of blood and other things," Serros says. "From that point, they are sanded, prepped, primed, painted, re-decaled, and replacement parts are added and reassemble. We add upgrade features and replace worn parts and then put it back together and we do a burn in where we try to make it not work and put it under the most stressful circumstances. When it passes that portion, we take it through quality control measures."

When it comes to refurbishing the C-arms, Wayne Horsman, VP Columbia Imaging Inc. a C-Arms dealer based in Columbia, has a different view than many others.

"One of the things we decided, through our experience, is that the usual process of refurbishment, we completely disagree with," Horsman says. "Normally, they get equipment at the end of life and rewire, repaint and redo them. Our philosophy is to find the nicest, newest, best piece of equipment we can find so we don't have to do all that to it."

At Bighorn Biomedical, the company completely dismantles the C-arms and goes through them at the component level. "We put about 120 manpower hours into the unit," Surratt says. "We replace the batteries that power up the unit and the little batteries that run the computer system, which most people don't."


Mini C-Arms strong

As noted previously, Hologic had just introduced a new digital version of their mini C-arm when the GE decree came down, so they inherited about 90%t of the mini market.

"The timing was good because we had a good, solid product but the manufacturing couldn't gear up any faster so we did have a supply issue with lead times going from 30 days to as much as 90 days," says Richard Keil, National Sales Manager for Hologic Fluoroscan. "We've been quick learners and have gotten the lion's share of the business over the last two years and really saw business boom."

Since GE still hasn't been cleared to ship their mini C-arms, Hologic should continue to be the OEM leader.

"The business of the mini C-arm is healthy because there's a big demand and need for it," Keil says. "It's hard to get a hold of a large C-arm sometimes so when an extremity surgeon wants to do a foot or hand or ankle surgery, the perfect solution has been this lower cost, lower dose, mini C-arm."

Over the last few years, the biggest changes in the mini C-arms have been the switch from an analog system to digital system and from regular to flat panel monitors.

One troubling trend that Keil has noticed in the last few months is that some customers are starting to be scared off by the economic uncertainty in the U.S.

"Although the last two years have been a big boom for us, since January, the opportunity for sales has dropped down and we are hearing a lot of customers saying they are going to hold off," he says. "They aren't saying they are not going to buy, just going to hold off six to nine months to see how the financial landscape evens-out before they purchase."

Customers are also turning more towards the refurbished market for minis.

"Mini C-arms sell as fast as you can get your hands on them. This is a very fine example of supply and demand," says Adkins. "We haven't been able to part a mini C-arm out for two years. Their value is so high on the market. They are hard to get and you can sell them as soon as you get them in. I could sell three or four today if I had them. OEC still isn't putting any out so it's a big problem. People want OEC."

Future Looks Bright

Philips will soon introduce their flat plate technology, which will provide much better special resolution and contrast resolution.

"You can instantly adjust controls and bring out tissue or bones and you can find small fractures or hairline issues that may be going on in the bone," Burkhart says. "Integration of high end technology into C-arms has been spectacular. There are some very innovative things we are working on."

Future developments also include using 3D in urology, seed placement in the lungs and using C-arms to help pain management by finding the nerve bundles with better contrast resolution.

The latest generation of Siemens ARCADIS C-arm family optimizes surgical workflows through numerous improvements. Innovations, such as the new ergonomic monitor trolley and the easy user interface provide optimal user experience, while an intelligent algorithm automatically adjusts and optimizes the image quality in all imaging situations. Their systems are suitable for broad clinical applications in orthopedics, trauma, and neurosurgery, as well as gastroenterology, vascular and cardiac surgery or in urology.

"The next ARCADIS generation continues the pace-setting tradition of achieving a new level of clinical excellence," says Anders Steiner, vice president, Special Systems, Siemens Medical Solutions USA, Inc. "Focused on improving everyday practice and solely led by the customers' needs, ARCADIS incorporates numerous unique to-the-point solutions. From image quality to operability, from versatility to efficiency, the groundbreaking features of our ARCADIS family set benchmarks - with outstanding functionalities that make perfect imaging a snap and an overall ergonomic concept that redefines clinical workflow in many fields of practice."

As for GE, they are continuing to work with the FDA on their mini and vascular models, and expect a resolution to be reached shortly.

"We are working with the FDA very closely and it's very promising," Usher says. "Behind the scenes we are ramping up and getting ready to move forward as soon as we can."

Once that happens, expect big changes again.



DOTmed Registered C-Arm Equipment Sales & Service Companies
Names in boldface are Premium Listings.

Domestic
John Stringer, The Stringer CO, AL
Terry Michel, Radiology Systems Engineering, Inc., CA
Ted Huss, Medical Imaging Resources, CA
DOTmed Certified
Rick Stockton, Atlas Medical Technologies, CA
DOTmed Certified
Ronald Lorg, Allied Resource Technology, Inc., FL
David Denholtz, Integrity Medical Systems, Inc., FL
DOTmed Certified/100
John Pereira, United Medical Technologies, Corp., FL
German Filgueira, PODER, Inc., FL
DOTmed Certified
Robert Serros, Jr., Amber Diagnostics, FL
Bill Adkins, National X-Ray Corporation, FL
DOTmed Certified
Ed Ruth, Managed Medical Imaging, FL
Deon Armes, A.X.S. Medical Systems, Inc., FL
Maddi More, MED iMAGE, IL
Travis Nipper, Clinical Engineering Consultants, Inc., KY
Mark Ardoin, Omni Imaging Service, LA
Davyn McGuire, Med Exchange International, Inc., MA
DOTmed Certified/100
Richard Keil, Hologic, Inc., MA
Wayne Horsman, Columbia Imaging, Inc. , MD
Jason Crawford, Block Imaging International, Inc., MI
Asif Bhinder, tekyard, MN
William Brooks, Salem Medical Electronics, Inc., NC
Robert Manetta, Nationwide Imaging Services, Inc., NJ
DOTmed Certified/100
Kristopher Derentz, KenQuest Medical, NV
DOTmed Certified
Gary Benitez, Crown Medical International, NY
DOTmed Certified
Leon Gugel, Metropolis International, NY
DOTmed Certified/100
John Kollegger, Bay Shore Medical, NY
DOTmed 100
John Patti, NCD, OH
Edward Rawley, Classic Diagnostic Imaging, LLC, OH
Kenneth Saltrick, Engineering Services, OH
DOTmed Certified
Richard Stock, Radiological Imaging Services, PA
DOTmed Certified/100
Chris Popper, Encore Medical International, Inc., PA
David Wingo, Radiology Equipment Partners,TN
Mike Jackson, Combined Imaging Associates,TN
Andrew Herris, Herris Medical,TN
Elizabeth Usher, GE Healthcare,UT
Scott Burkhart, Philips Healthcare, WA
Russ Surratt, Bighorn Biomedical Services, Inc.,WY
DOTmed Certified

International
Christian von Leipzig, Medical Ray, Argentia
David Lapenat, ANDA Medical, Inc., Canada
DOTmed Certified/100
Abdelrahim Khalil, Besisc, Egypt
Rami Wahba, Scope Care, Egypt
Juan Garcia, Issste , Mexico
Andres Lomelli, Movil Salud C.A., Venezuela



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