This report originally appeared in the June 2011 issue of DOTmed Business News

Welcome to the yearly round-up of the top topics in nuclear medicine imaging. The last 12 months have provided a lot to talk about, from the first glimpse of new modalities, to the end of an isotope shortage, to market shifts and developments in radiopharmaceuticals.

Hybrids are a hit
The high desirability of PET has led to a number of hybrid offshoots. PET/CT has been around for a decade but some new combinations may not be far off. For example, at RSNA 2010, Siemens Medical Solutions introduced the world’s first PET-MR, the Biograph mMR. The system still requires 510(k) review by the Food and Drug Administration.

While Siemens had the big reveal, Philips Healthcare was the first to make it to market with its own PET-MRI system, which has receive CE marking for sale in Europe. The Ingenuity TF PET/MR is the first new imaging modality introduced by the company in a decade.



The case for SPECT
PET hybrids may be cutting into the SPECT pie, but the SPECT is still a workhorse used in about 7 million procedures each year and will likely hold that position for some time. In part, the large install base in the United States provides security as the devices work off their debt to the facilities utilizing them. Few facilities will readily discard a machine performing the required imaging, to pay a significantly higher price for PET especially with the fast and furious rate new hybrids and radiopharmaceuticals are being developed.

A second point in SPECT’s favor is what may be antiquated insurance regulations. “If you have a patient with a high BMI and they’re going to need a PET scan, why not go straight to it?” says Joe Mathews, director of sales and operations for Nuclear Medicine Professionals Inc. “The only reason preventing that direct move to PET is that an insurance company is mandating a certain sequence of testing.”

However, the SPECT story isn’t all good news. Shortages of certain radioisotopes may darken its future.

The give and take of Medicare
According to Mathews, certain steps must be taken to meet mandated insurance requirements, like a non-nuclear stress test, followed by a nuclear stress test, and then a PET exam. That means a lot of hoops to jump through and health care insurance providers may add or subtract from the number of hoops at any time. Of course, Medicare, the largest health care insurer in the country has had the most impact being directly tied to rules and regulations passed down from the federal level.

After Diagnosis Related Groups, first introduced in New Jersey in 1980, went national, it became lucrative to establish freestanding imaging clinics that could get reasonable reimbursements from Medicare. The situation also increased the client pool for dealers of refurbished equipment. “It was a good time for the refurb market,” says Don Bogutski, president of Diagnostix Plus, Inc., a supplier of new and refurbished nuclear medicine equipment and services. “These freestanding clinics were owned by entrepreneurs, not doctors, and one thing they had in common was the ability to assess the benefits of going with used, as opposed to new, equipment. “


Healthy reimbursement rates coupled with actively seeking the best buys on equipment – whether new or used, meant these facilities were working with a good profit and loss model. But all good things come to an end and the pendulum swung the other way in 2009. That year, Medicare took another look at the situation and reset the clock – deciding it would be cost-effective to bring scans back to hospitals, so reimbursements to private centers were slashed. The blow staggered the industry. It was followed by the current recession and the lending market tightened its purse strings and began to aggressively call in outstanding debts. Once-thriving freestanding imaging clinics were forced to quickly develop new business strategies to remain solvent.

Strategies for survival
Private practices faced challenges few had experienced. Many patients had come to expect a full-spectrum of care which included nuclear medical imaging services. But independent doctors found it difficult to rationalize the purchase of expensive imaging devices when new reimbursement and utilization rules might at best, allow them to break even.

That’s why business has been humming for Mathew’s company, which supplies SPECT cameras via a lease program. “We wheel them in, the exams are done, we wheel them back out,” he explains. “It’s nice for doctors who don’t have high volume, but want to provide a service that will help them retain patients.”

Getting the benefits without the burden is a good way for health care providers to stay afloat. By utilizing a lease service, there’s no need for a hot lab or a technologist, a service contract for machine maintenance or pharmaceutical contracts. But Mathews does point out, the solution Nuclear Medicine Professionals provides doesn’t make sense for everyone. If the service is needed more than twice a week, it’s probably more cost-effective to purchase a system.

A second strategy of the freestanding imaging centers has been to become a little less freestanding. According to Diagnostix Plus’ Bogutski, many of the larger practices have entered into relationships with hospitals. “So instead of the SPECT cardiology clinic of Dr. Jones, it’s now The Outpatient Treatment Center for Our Lady of Leisure,” he says.

A market in flux
Equipment sales for nuclear medicine have also been hit hard by the turmoil. According to a November 2010 report by health care research firm, Bio-Tech Systems Inc., while PET unit orders increased dramatically in 2004 and 2005, they plummeted from 2006 to 2009, with the main cause being reimbursement issues. However, that same report has forecasted growth of nine percent from 2010 through 2017.

Whether that will be good news for the refurbished side remains to be seen. For now, it too is adapting to a strange market. Where before, freestanding imaging facilities were the key buyers for many, they are now approaching hospitals, a much different situation. “That’s because an administrator who saves money by buying used equipment won’t get much of a reward for the decision,” says Bogutski. “But if something goes wrong with the machine and it was purchased from a questionable source — that may mean he’s getting fired.”

Another dilemma in the refurbished market is the scarcity of the latest technologies. By nature, the used market’s supply will always be a little behind what OEMs are offering as the next big thing. So there’s a lag as the market waits for the new to become old.”Very few PET systems come onto the market,” says Jeremy Basterash, marketing manager for MEDX Inc., a provider of remanufactured and refurbished molecular imaging equipment.

And once a unit does hit the market, enough buyers have it on their wish lists that bidding wars erupt and by the time the dust settles, there’s little profit to be made.

But newer, more efficient machines are on many wish lists since they enable a faster throughput of patients, making up in volume what has been lost in reimbursement for individual procedures. And although the profit margin may be small, it’s still profit and delivering what the customer wants is still a good business decision.

Glen Witherbee, regional sales manager for Med-Engineering, a company providing service to the molecular imaging community, has seen another troubling trend. “We’re seeing facilities cutting service contracts, either not renewing or renegotiating to cuts costs. Some are totally going without, gambling on saving by just having to pay time and materials,” he says. “They’re looking at it like car insurance, if you don’t have an accident, you don’t need it.”

DOTmed Registered Nuclear Medicine Sales & Service Companies

Names in boldface are Premium Listings.
Domestic
David Stopak, A. Imaging Solutions, AL
DOTmed Certified
DOTmed 100
John Allaire, All-Tech Medical, AZ
Chuck Coco, Chuck Coco, CA
Phil Lonbeck, DB Medical Electronics, CA
Ken Matayor, Jaken Medical Inc., CA
DOTmed Certified
Ted Huss, Medical Imaging Resources, CA
DOTmed Certified
Debbie Wong, Spectrum Dynamics, CA
Raj Sandhu, West Coast Imaging, CA
William Carroll, Eclipse Systems Inc., CT
Stewart Farber, Farber Medical Solutions, LLC., CT
Christine Holland, Parker Medical, Inc., CT
Erin Diaz Faes, AlmA Imaging, FL
DOTmed Certified
Rick Ebling, Ebling Imaging LLC, FL
Moshe Alkalay, Hi Tech Int'l Group, FL
DOTmed Certified
Rick Staab, InterMed Biomedical Services Inc, FL
Joe Mathews, NMPI, FL
Larry Sprague, Imaging Resources, GA
Paul Eaton, Southeast Nuclear Electronics, GA
DOTmed Certified
Steve Basterash, Technological Horizons Enterprises, GA
DOTmed Certified
David Askew, Scandia Corporation, IA
Eric Allingson, MEDX, Inc., IL
Greg Kramer, C&G Technologies, Inc., IN
DOTmed Certified
DOTmed 100
Grant Norris, Associated Imaging Services, KS
DOTmed Certified
Joseph Sciarra, Marquis Medical, LA
DOTmed Certified
DOTmed 100
David Pac, American Radiology Source, MD
DOTmed Certified
DOTmed 100
JOHN GEBHARDT, HEALTHCARE SYSTEMS INC, MD
Steve Rentz, Block Imaging International, MI
DOTmed 100
Jeff Rogers, Medical Imaging Resources Inc., MI
DOTmed 100
Richard Allen, R.A. Services, MI
Justen Harness, Universal Medical Resources, MO
DOTmed Certified
Shanna Flanagan, DMS Health Technologies, ND
DOTmed 100
Lisa Wiggs, Absolutely Medical Solutions, NC
Kevin Larcher, Larcher Medical, NC
Don Bogutski, Diagnostix Plus, Inc., NJ
DOTmed Certified
Marcus Carter, M5 MEDICAL, NJ
Victor Landeros, OMED of Nevada LLC, NV
DOTmed 100
Edward Zingman, EGro LLC, NY
Leon Gugel, Metropolis International, NY
DOTmed Certified
DOTmed 100
Ian Alpert, Tandem Medical Equipment, Inc., NY
DOTmed Certified
DOTmed 100
Michael Lies, Medical Advantages Inc., PA
DOTmed Certified
Chris Reilly, CER MEDICAL, SC
DOTmed Certified
roger rae, Mobile Resources, Inc., SD
Rick Rippin, ABT Molecular Imaging, TN
Bart Browning, Molecular Imaging Solutions, TN
Jack Barker, Rowe Transfer Inc., TN
DOTmed Certified
Richard Armijo, Advanced Nuclear Consultants, TX
DOTmed Certified
Aaron Ortiz, Infinity Medical Imaging, TX
Stephan Anderson, Radiology Equipment Sales & Service, LLC, TX
DOTmed 100
Dan Pakuszewski, Southwestern Imaging, TX
Kenneth Smith, BC Technical, UT
DOTmed Certified
DOTmed 100
Tom Luque, ECS Nuclear, WA

International
Derradji Youcef, Sarl Dtm, Algeria
Emil Atanasov, stsconsult LTD, Bulgaria
Tom McGhie, TSG Instrumentation Inc, Canada
BAOQIANG DING, Beijing Nuclear Medicine Repair Center, China
Sam Eli, Eli Electronics Co.,Ltd, China
Carlos Duran, INGENIERIA CLINICA, Colombia
SAMI SAMIR MOHAMED SALH, ELECTRONIC MEDICAL EQUIPMENT EME, Egypt
Gerd Stockmann, Inter Medical, Germany
Sajid Farooq Babar, Precision Technologies, Pakistan
Gilberto Mangual, ImageTek, Puerto Rico
Rafael Contador, MD Depot Inc, Puerto Rico