Note: This report originally appeared in the May 2008 edition of DOTmed Business News. A list of registered users that provide sales & service can be found at the end.

Versatile. Affordable. Portable. Safe. It's hard to think of a downside to ultrasound.

"People think of MR, CT and beautiful images, but in fact many more studies are done with ultrasound - it's the workhorse of the imaging world," says Barry B. Goldberg, MD, a clinician, researcher and educator at Thomas Jefferson University and renowned expert on ultrasound. "Another aspect is that ultrasound is not just used by sonographers. It is increasingly used by many different types of physicians - from emergency room doctors, to anesthesiologists, to cardiologists, and internist, the list goes and on and on. It's even used to guide needle placement for treating nerve pain," Goldberg noted.

Ultrasound's widespread usefulness has led to more than 30 million patient exams each year in U.S. hospitals. Most hospitals have multiple ultrasound units and the majority of these were installed after 2002. This indicates the market may be approaching a saturation point that could temper sales of new equipment somewhat in the future, industry insiders told DOTmed Business News. Nevertheless, the market size in the U.S. exceeds $1 billion, with yearly growth estimates between 5-7%. As with many areas of technology, the trend is toward consolidation into the large OEMs. For instance, Siemens acquired Acuson in 2000; Philips acquired ATL Ultrasound about 10 years ago.

While medical imaging reimbursements have been cut by Medicare, putting price pressures on sales and service in all modalities, ultrasound's relative affordability has helped it withstand the Deficit Reduction Act cuts.

"DRA didn't impact ultrasound tremendously as it did MR and CT. Ultrasound is still considered a very cost-effective modality," says Jim Brown, Senior Director of Clinical and Technical Marketing, Philips Healthcare Ultrasound Division. "If you are going to spend your money on making a diagnosis, many times ultrasound is well worth the value. With ultrasound going into interventional and guidance, the emergency department, and screening procedures, we are seeing increased utilization."




But the cuts are taking a toll on smaller practices and imaging centers.
"Reimbursement costs are under constant downward pressure by the managed care groups which ultimately make it less attractive for a medical practice to purchase ultrasound equipment," says Abe Sokol, Marketing Director, Absolute Medical Equipment, Wesley Hills, NY. "However, since the cost of reconditioned ultrasound equipment is also receding and clinics need to offer better service to retain and attract patients, demand remains strong."

Multiple Clinical Uses and Markets

How do the many clinical applications for ultrasound stack up? "If you look at the major 'food groups' if you will, in terms of applications, number one is general imaging of the visceral organs including liver and kidneys," reports G. Wayne Moore, President and CEO, Sonora Medical Systems, Longmont, CO. "Historically the other applications are cardiology as number two, OB/GYN number three based on the volume of studies done, followed by vascular, where surgeons do pre-surgical staging."

Rather than straightforward organic growth in ultrasound use, Moore sees a complex shift with ultrasound gaining clinical users in new areas. "It's a realignment of where the ultrasound is deployed and who the customers are for that ultrasound. That is growing. So the traditional radiology cart-based system may be slowing down but the slack is being picked up by the handheld, clinically specific types of systems that fuel growth."

Future ultrasound sales are forecast to be strongest in highly sophisticated equipment such as hand-carried ultrasound (HCU) and advanced 3D (volume images) and 4D (motion picture) equipment that are driving the industry.

"The portable market is clearly the fastest-growing segment, and for most new models in this segment, the demand is high. End-users are still aware that unless you are in the highest price HCU range, the full-sized consoles still offer better performance for the price," Sokol notes.

Some smaller OEMs are emerging to challenge the big name manufacturers in the HCU segment. "You can have a small, portable ultrasound system without compromising performance," says Grace Palma, Vice President of Sales and Marketing, Terason Ultrasound, Burlington, MA. The company makes laptop-sized systems with the performance capabilities of a cart-based system. "In terms of clinical applications, it does everything an ultrasound system does: from OB/GYN, radiology guidance, vascular, cardiovascular, musculoskeletal, small part, ICU, OR, to wherever it is needed because we have a full set of transducers (probes) as well."

In terms of clinical areas of growth, women's health is a huge and growing application for ultrasound. And it's not only OB/GYN or breast imaging, as important as those are. Heart disease - the nation's number one killer - presents a prevalent disease area and opportunity for women's health intervention.

"We are seeing greater demand of utilization of ultrasound primarily in cardiology service, especially in women's health with more emphasis in screening women and addressing women-specific symptoms and causes. Ultrasound is playing a big role in that area because we can very easily look at the heart and make a primary diagnosis as well as follow-up," says Philips Healthcare's Brown.

A Unique Modality

Ultrasound is unique in many ways. Most notably, it is categorized as radiological even though ultrasound uses sound waves and not ionizing radiation. In an era in which radiation exposure is of increasing concern, ultrasound stands out for its safety profile.




With the technology in the hands of so many specialists, training becomes critical and the skills of the technologist or sonographer are paramount to the quality of the exam. These and other distinguishing characteristics of the technology have important service implications.

"Ultrasound is in a funny spot. It's between an imaging device and a 'biomed' device," observes Christopher Cone, CEO, Echoserve, Golden, CO. He notes that hospitals typically have costly service contracts for high-end equipment such as CT scanners, while lower-cost equipment such as patient monitors are typically maintained by in-house biomedical staff. "Ultrasound is not quite an MRI or CT and not quite a patient monitor [in the sense of service arrangements]. It's one of those assets that hospitals have targeted to bring in house [for servicing], since the value proposition is there and training and parts are available."

Cone and other industry experts report that hospitals have increasingly taken on maintenance and servicing of ultrasound equipment themselves, either through their own staff, asset managers on site, or through independent service organizations. (See sidebar.) Because most facilities have multiple ultrasound units, service issues are extremely important to healthcare providers' bottom line.

"You see a lot of sensitivity on the service side because many sites have 10-20 [ultrasound] machines; you don't just have one system, which is typical with MR or CT scanners," Cone notes. "That is why we see [providers] considering lower-cost alternatives as long as the quality of service is there."

"Ultrasound is very interesting because unlike MR or CT, ultrasound fits very well into the core competencies of the existing biomed department. You don't need a PhD like you do [to service] an MR or CT," says Don Trombatore, Director of Business Development, Axess Ultrasound, Indianapolis, IN.

Preventive maintenance is essential but often inadequately performed, he cautioned. American College of Radiology standards call for two preventive actions per year along with probe testing. Here, as in most service areas, there can be huge difference in the meticulousness of providers.

For instance, simple environmental conditions like linen changes and HVAC can stir up dust particles. "You have to go in and monitor the system and make sure all the fan filters are running clean and free to minimize dust and dirt buildup," says Trombatore. "If you do, uptime increases exponentially. A lot of in-house biomed departments have realized this."

Sales Trends Favor Advanced Applications

Medical equipment industry insiders interviewed for this article report a steady pace of sales for used ultrasound equipment, a market that can save hospitals about 40% off the cost of purchasing and servicing new equipment. There is also heavy activity in trade-ins motivated by significant new product advances lately.

"When a new product introduction comes out that is revolutionary as opposed to evolutionary, that spurs a lot of trade-ins because the customer is getting rid of the entire product. When there are upgrades and evolutionary changes to the product, then they tend to hold on to product," reports Jim Kollai, General Manager, Ambassador Medical, Carmel, IN. "We see quite a few new products coming in and that is why we see trade-ins."

Regarding new products, there's a lot of buzz lately about Philips' "ibox" units, the iU22 for general imaging and iE33 for cardiac imaging. These high-end ultrasound technologies are priced from $120,000 to $200,000 and can perform 2D, 3D, and 4D (real time) studies. Philips doesn't make its HDI 5000 anymore, but the company's HD line continues to include affordable units from $20,000 to $80,000.

Philips enjoys many distinctions in the field of ultrasound. The company is the market leader for cardiology and radiology and has been rated number one in service by IMV for 15 years. Siemens and GE are the other dominant OEMs. But they're not the only game in town.

"Competition from foreign-based entities like Mindray will continue to put pressure on the market for domestic design and manufacturing," observes Alan Gust, Biomedical Engineer, Mobile Instrument, Bellefontaine, OH.

Issues of Probes and Service

The most essential part of the ultrasound system is the transducer (or probe), which contains a costly and delicate array of high-tech crystals that send energy through the body to create visual images from sound waves.

"Transducers are small, hand-held devices that transmit inaudible, high-frequency sound waves into the body and record the subtle changes in the sound waves' pitch and direction," explains Michael Parnell, EquipStat Medical Equipment, Tampa, FL. "As with any repair, you must have trained technicians to repair transducers. Replacement of broken ultrasound transducers represents a significant cost area for hospitals."

"The probes are like the glassware tubes for X-ray and CT," says Christopher Turner, Owner, C&C Medical Solutions, Noblesville, IN, comparing the ultrasound probe to the most essential and costly component in other modalities. "Customers drop [the probe] and the array gets damaged and that's an expensive part and hard to get." For example, a new probe used in transesophageal echocardiogram (TEE) can run $20,000.

Like most medical equipment parts, probes can be serviced and replaced with new or used ones. But only a few companies are able to repair ultrasound probes. Some notable examples of transducers repair shops include Sonora Medical Systems, Echoserve, and Axess Ultrasound. Wetsco is a low-profile transducer repair company which only works with the OEMs, and Specialized Technologies, Tulsa, OK, only repairs one type of probe, the TEE, or transesophageal probe.

"The growth for us in probe repair activity has been very robust? Hospitals are taking an ever-closer look at all of their expenditures and how they can realistically save more bottom-line dollars," says Moore. "Sonora's whole value proposition was to give the hospital another choice to get something repaired and get aftermarket products without going to the OEM."

"An enormous library of castings, testing adapters, adhesives, and electronics are necessary for an ultrasound transducer repair company. These are all engineering challenges and any company able to provide quality repairs with the amount of research and development involved has found a special niche," Gust says.

It is possible to get a service contract just for the probe but regular preventive maintenance of the whole system is also important, including two preventive actions per year. The other systems in the ultrasound unit that require maintenance include the electronics, monitor, keyboard, cables and mechanical parts.

Service response time is most critical. "If your machine goes down you may have to stop doing cases, so sometimes equipment decisions are made on the basis of prompt service," Dr. Goldberg says. "Especially if you are sitting in an office with a single machine, or even if you have many machines, if a few are out of action it causes bottlenecks."

Future Trends in Ultrasound

From imaging a newborn's brain (because sound waves can penetrate a baby's soft skull), to advanced real-time cardiac imaging and surgical planning, to spotting venous disease such as thrombus, the applications for ultrasound are nearly limitless.

"Continued advances in 4D technology may open doors to better visualization of slower-motion defects of systems related to smooth muscle or glandular function. Therapeutic ultrasound applications continue to make gains in terms of options for surgical ultrasound for cutting, coagulation, and deeper ablation," says Gust. "Ultrasound-guided drug release is an interesting concept that will continue to evolve with reduced cost and the rapid market cycles. Ultimately, portability will drive the market for diagnostic imaging ultrasound. Pocket-sized scanners will be a cornerstone of exams in the future and the imaging modality will be seen as a basic tool rather than its current status as an independent diagnostic procedure."

While CT and MR enjoy an advantage because of the use of contrast agents, that too is being challenged by ultrasound. "Some of these contrast agents have proven to be toxic, so ultrasound has been used more often and we are seeing, in most of the world, the use of ultrasound contrast agents, which do not appear to have toxic effects," Dr. Goldberg reports. Besides the established use of ultrasound contrast to identify and differentiate liver masses, in the future we will be able to identify tumor-bearing sentinel nodes. Dr. Goldberg has an NIH grant related to this area.

He also confirmed that a rapidly growing application for ultrasound in the United States is in musculoskeletal ultrasound, an area of increasing importance given the aging population.

Another promising application is elastography, which refers to the study of the rigidity or softness of masses. "Malignant masses are harder while benign masses are softer. We are just at the beginning of this new ultrasound technique," he says.

Dr. Goldberg also envisions a world in which pocket-sized ultrasound technologies or "ultrascopes" will be as widely used as today's stethoscopes. "I have been in this field more than 40 years and each year I am astonished about how much further we are able to go."


Tips on choosing an Independent Service Provider

-You can save up to 40% on systems and service by choosing a reliable third party service provider.

-Do your due diligence to check into the reputation of the service provider - www.DOTmed.com is a great place to start.

-Don't be too impressed by long warranty offers. A two-year warranty may be too good to be true if the company or its engineers have not been in business very long.

-Find out if warranties are subject to inspection of equipment before coverage kicks in. Does the service provider have replacement parts during the inspection period? These may or may not be needed, but know what your contract stipulates.

-How fast will service response times be? This may be the over-riding issue in your choice of service provider, all other things being equal.

-Will your service meet standards of the American College of Radiology? You need two preventive maintenance actions per year along with regular transducer (probe) testing.

-Probes are costly and delicate. Find out how the service provider handles probe repair or replacement.

-Remember that OEMs are competing with ISOs for your business so ask the manufacturer to come back with their own long-term service offerings and options.


This story originally appeared in the May 2008 issue of DOTmed Business News.

---

DOTmed Registered Ultrasound Sales and Service Companies
Names in boldface are Premium Listings.

Domestic
Ricardo Armenta, Ultra Solutions, Inc., CA
Steven Kelley, AmeriaMED Ultrasound Corp., CA
DOTmed Certified
Scott Hassler, KPI Ultrasound, CA
DOTmed Certified
Christopher Cone, Echoserve, CO
Elmer J. Ruder, Nova Technologies, Inc., CO
DOTmed Certified
Eddie Henry, Sonora Medical Systems, CO
Rick Reed, Precision Medical, CO
Ed Riley, The Ultrasound Trader, CO
David Denholtz, Integrity Medical Systems, Inc., FL
DOTmed Certified/100
Oswaldo Guio, LET Medical Systems, FL
Bob Serros, Amber Diagnostics, FL
Derrell McCrary, Choice Medical Systems, Inc., FL
DOTmed Certified/100
Michael Parnell, EquipStat Medical Equipment, FL
Mark Asmer, MedCorp, FL
Joe Williams, National Ultrasound, GA
Sherman Weston, U.S. Imaging, Inc., GA
Ben Murray, N & N Medical, Inc., GA
Gerry Gadson, Homebase Health Corporation, IL
Beau White, Advanced Imaging Healthcare, IN
DOTmed Certified
Colin Grady, Ambassador Medical, IN
DOTmed Certified/100
Jerry Scott, GPS Medical, IN
Don Trombatore, Axess Ultrasound, IN
DOTmed Certified/100
Christopher Turner, C&C Medical Solutions, IN
DOTmed Certified/100
Susan Tocci, Terason, MA
Eduardo Paredes, M.E.S. Inc., MA
John Gladstein, Medical Device Depot, MD
Tony Orlando, Complete Medical Services, MI
DOTmed Certified
Robert Grzeskowiak, Midwest Imaging, MO
Bill Cowan, Premier Medical, NJ
Robert Manetta, Nationwide Imaging Services, Inc., NJ
DOTmed Certified/100
Leon Gugel, Metropolis International, NY
DOTmed Certified/100
John Kollegger, Bay Shore Medical, LLC, NY
DOTmed 100
Abe Sokol, Absolute Medical Equipment, NY
DOTmed Certified
Alan Gust, Mobile Instrument, OH
Ken Clark, Precison Transducer Services, Inc., OK
Alan Pettenati, Trisonics, PA
Mark Suffridge, ReMedPar, TN
Will Martinez, Trident Imaging Services, TX
Lynn Williams, Advanced Imaging Management, TX
Richard Maynard, USA Medical International, WA
DOTmed 100
Saulo Waisenberg, Selcon Business Solutions LLC, WA
Charlie Jahnke, MedPro Imaging, Inc., WI
DOTmed Certified/100

International
Himanshu Gupta, EverX Pty Ltd, Australia
DOTmed Certified/100
David Lapenat, ANDA Medical, Inc., Canada
DOTmed Certified
Yuvaraj Sankaran, Orbit Ace Medicare P Ltd, India
Lakshmi Narayana, Man Machine Electronics, India

---