This article is from in the April 2008 issue of DOTmed Business News. A list of registered users that provide sales & service can be found at the end.

In a normal business environment, we would start this report by noting that the Millennium Research Group's Global Markets Report for C-Arms 2008 stated that the U.S. market for fixed C-arm systems was estimated over $1.4 billion in 2007, and is expected to grow to over $1.8 billion in 2012.

But 2007 was not a normal year for C-arms.

The Initial Problem: GE/OEC & FDA

It is no secret that GE/OEC took a big hit in its C-arm market share (once estimated at 65 to 70 percent) in 2007, when the FDA revealed that CGMP (current good manufacturing practices) with the OEC C-arm were deficient at OEC facilities in Salt Lake City, Utah and Lawrence, Massachusetts.

That discovery led to a consent decree, signed in January 2007, that effectively shut down shipment of 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, as well as components and accessories.

GE/OEC Now Waits Hopefully in The Wings

GE/OEC has been working diligently for more than a year to correct deficiencies, and the FDA has just finished an on-site review of OEC's remedial actions. Sometime during the first week in April, the FDA is scheduled to deliver its decision as to whether GE can resume production, first at its Salt Lake City facility.

Peter McCabe, President and Chief Executive Officer of GE/OEC Medical Systems and GE Healthcare Surgery states, "I am hopeful that the FDA will report that we are in compliance with CGMP requirements very soon, and we are ready to go." In fact, McCabe notes, the downtime has allowed GE/OEC to not only address and correct FDA's concerns, "it has also allowed us to take the time to improve on our C-arm products so the quality is the best it has ever been."

We'll be back

Since GE/OEC did have the lion's share of the C-arm market, many in the field are wondering if they can get it back. McCabe is confident that customer loyalty will prevail, and when they get the green light, backlogs will be filled within six months (three to four for the 9900 model - the first machines to resume production). The consent decree did allow GE/OEC to continue to provide routine service maintenance, replacement parts and accessories for the GE/OEC systems.




Filling the vacuum

The OEC shutdown sent shockwaves throughout the new and used C-arm industry, leaving most scrambling to find a way to fill the void. Philips, Siemens, Hologic and Ziehm went into high gear, with Phillips and Siemens snapping up a good deal of the market share that once belonged to GE/OEC.

The circumstance allowed Ziehm Imaging to place C-arms in the United States market and successfully demonstrate their innovative technology in some previously unavailable OEC forums. As of this date Ryan Hales, Product Manager, says, "we believe that Ziehm's technology surpasses that of OEC and we're well-positioned to capture more market share in the US."

Ziehm is very well established in European countries with 60 plus percent of the market share. Ziehm has headquarters based in Nuremberg, Germany, New York, NY and Riverside, CA. Their most notable C-arm line is the Vision family. This line offers a combination of advanced image processing and advanced components in the imaging chain that allows them to provide high quality images while reducing the dose to the patient and physician.

Competition brings out the best in products

Scott Burkhart, Vice President of general X-ray for Philips describes the GE/OEC situation as "the perfect storm" in a good way for Philips. "The consent decree was announced at the same time that we released our new generation of C-arms," says Burkhart. That includes the BV Pulsera with 3D imaging, capable of handling large volume reconstructions, providing large overviews and fine details.

Philips is also promoting the fact that their C-arm systems are developed to get excellent image quality at a minimum X-ray dose. Public interest has grown over the amount of radiation emitted from all diagnostic X-ray equipment. Burkhart claims Philips' C-arms use only enough radiation to produce a clear image, while simultaneously keeping the exposure of the patient and hospital personnel at a minimum.




Siemens Medical Solutions, headquartered in Malvern, Pennsylvania and Erlangen, Germany, has also benefited from the OEC shut-down. In January 2008, Siemens reported revenue of $3.88 billion compared to $3.08 billion January 2007.

Siemens has gained popularity in the C-arm market with the Artis zee system family that uses X-ray technology and contrast media for spatial visualization of blood vessels. The industrial robot technology integrated in Artis zeego allows the physician to move the C-arm to almost any position around a patient, making it easier to visualize internal organs from various sides. Using this system, a surgeon is able to perform complex C-arm movements that are not possible with conventional C-arm systems.

Hologic, (the first company to produce mini C-arms), reported record revenues exceeding $370 million for the quarter ending December 2007. The acquisition of BioLucent and the completion of the merger with Cytyc last October allowed Hologic to double in size in a 12 month period and gave Hologic the status of holding the number one position in nine technology areas serving women's health, including breast cancer diagnosis and treatment, cervical cancer screening, prenatal testing, and osteoporosis detection. Of its four reporting segments, mini C-arms are included in Skeletal Health. The Fluoroscan InSight mini C-arm - a system specifically designed to deliver high resolution, low dose images - was demonstrated at RSNA'07. "Hologic has invested substantially in the development of its mini C-arm system," states Keil. "Hologic holds a niche in the mini C-arm market with 90 percent of the market share."

OEC shut-down "neither unique nor extraordinary"

Don Bogutski, President of Diagnostix Plus, Inc., Rockville Centre, NY, offers a positive spin to the GE/OEC outcome. "FDA shutting down production of C-arms at GE/OEC is neither unique, nor extraordinary," states Bogutski. He feels that it is the FDA doing their job and a manufacturer responding by correcting a shortcoming before it becomes a problem. Historically, other major and minor OEMs have experienced these types of problems. "Several years ago, production was closed for more than six months as ADAC, Philips nuclear medicine worked to comply with FDA testing/reporting requirements," notes Bogutski. "Like GE will, they eventually worked back to compliance and resumed manufacturing." Bogutski also states that Siemens is currently working with the FDA on a PET/CT problem and there have been instances where smaller companies have had to suspend production as well. Diagnostix Plus sells reconditioned imaging tables for C-arms as a low cost alternative to new patient imaging tables.

Bogutski believes that third parties will succeed if they understand the need to be part of larger groups such as DOTmed.com and IAMERS. "We must use every tool available to successfully compete as strong competitors to the OEMs, especially for previously owned equipment," asserts Bogutski. Wayne Webster, Managing Director of Diagnostix Plus, will be presenting a DRA update at the May Annual Meeting of IAMERS that will include an overview on DRA and the imaging modalities, and what to expect during the next three years.

The 2007 situation from the grass-roots level

C-arms were one of the least expensive imaging devices in the ISO market, but because of the OEC situation, there has been a run on the new and used C-arm equipment. Prices are up across the board for equipment and parts, causing positive and negatives effects for third party vendors.

We asked a number of C-arm-dependent ISOs how the OEC situation affected their business in 2007.

Huestis Medical, Taunton, MA is a re-manufactured GE/OEC 9000, 9400 and 9600 C-arms, and sells throughout the U.S. and worldwide. According to Dan Bond, Sales Coordinator, Huestis Medical had a good year in 2007, and is looking forward to a banner year during 2008. As far as economic factors go, Bond states that imaging standards and reimbursement rates are two prime factors that influence the demand for re-manufactured equipment. "As these factors change, so will the future of the re-manufacturing business," says Bond. The company provides a 12-month warranty on all parts except glassware, and used image intensifiers have a 24-month, non-prorated warranty.

Med Imaging Systems, Inc. of Bartlett, TN, sells and services all OEM C-arms - but primarily OEC. Ward Huddleston, CEO, says Med Imaging did extremely well in 2007 and Huddleston is expecting modest growth for 2008. "We believe our company will continue to prosper, since we provide service on all modalities and digital systems," states Huddleston. 'I feel, however, that some ISOs will be forced out of business over time."

Adapting and adjusting

Dan Edwards, Director of Sales and Marketing, Image Diagnostics, Inc, Sterling, MA - a manufacturer of specialized tables for mobile C-arms - states that GE/OEC has been a distributor of IDI tables for many years and was one of its largest customers. "With the stoppage of GE/OEC C-arm shipments, there was a corresponding drop in C-arm table activity that had a significant impact on IDI's business in 2007," notes Edwards. He does see a bright side, however, because he notes, "The GE/OEC situation caused us to step back and take a serious look at our market, our distribution and our path to business growth." Since mid-2007, IDI has significantly expanded its distribution through other C-arm sales organizations and has put much more emphasis on new product development.

Russ Surratt, President of Bighorn Biomedical in Pine Haven, WY, feels that OEC is about to swing the doors wide open after being in the penalty box for a while. "I believe that GE/OEC customers are loyal and are either waiting for back orders, or ready to resume 'business as usual' with OEC -- once the okay is given," says Surratt. He notes that Bighorn has met its customers' needs with an extraordinarily large inventory of refurbished equipment that is sold to customers worldwide. Bighorn specializes in and carries a full line of refurbished OEC products.

Bill Adkins, President of National X-Ray Corporation, Palmetto, FL, says his company was drastically affected by the problems OEC faced. "We had a large parts business until OEC had their FDA problems," explains Adkins. The 'problem' did have a rippling force on his business because the supply of used systems to part out virtually came to a halt. National X-Ray services and sells OECs and Phillips on a wholesale basis internationally, and does end-user business in Southwest Florida.

Eastern Diagnostic Imaging, Inc. (EDI), Taunton, MA, remanufactures GE/OEC C-arms. President Steve Walsh reports the company hasn't had a problem with parts because it maintains a large inventory, and purchases parts from the OEM and other parts suppliers. "This has guaranteed our supply of parts and our impeccable service support," states Walsh.

He comments that there are always factors that affect the growth or decline in the imaging business and the DRAs are the latest factor. Walsh feels that once hospitals and healthcare facilities become acclimated to new reimbursement schedules, there will be an increase in the fluoroscopic refurbishing business. "If the diagnostic result of a remanufactured product is the same as a new product, why would someone pay twice the price?" he asks. Walsh comments that economic factors driving healthcare will demand at least a look at the alternatives to new products, especially in the areas of C-arms, portable X-ray and remanufacturing procedures.

Computron Medical Corporation, Mount Prospect, IL, offers a full line of X-ray tables and their own CMC brand of digital C-arms. Mike Cozzi, Sales and Marketing Manager for CMC, reports that business was down in 2007, but the outlook is way up for 2008. Cozzi believes that increased competition from lower cost, inferior refurbishers has affected the business, but third-party services providers will survive.

Amber Diagnostics, Orlando FL, sells and services OEC, Philips, Siemens and Ziehm internationally and throughout Florida. CEO Robert Serros reports that 2008 started out as one of Amber's best years in seventeen years. "The DRA has definitely pushed people closer to deciding to go with refurbished equipment. The weak dollar has increased our exports by 40% in the past six months," notes Serros.

Darrell Kile, Equipment Sales Manager for Classic Diagnostic Imaging, Macedonia, OH, sells refurbished OEC units. Kile says that business was good in 2007 and projects a better 2008. "We have started some new projects that we will be unveiling over the next few months with the hopes of increasing our business," states Kile. One of these projects is a new professional paint booth that offers aircraft paint for more wear resistance.

Gary Benitez, President of Crown Medical International in Beechhurst, NY, says his business was up 30 percent in 2007, but he is anticipating that business may be slightly lower in 2008, due to the C-arm shortage. Crown carries all popular C-arm parts and carries a 12-month warranty on its C-arm equipment depending on the customer's budget.

Benitez notes that the FDA's shut down of GE's C-arm division was great for the re-marketers' business. On the other hand, it is his understanding that GE/OEC will start to rollout the new 9900s in the spring of 2008. "Along with the boom, the OEC dilemma has also created a shortage of used equipment coming into the market," states Benitez.

Leon Gugel, President, Metropolis International, Long Island City, NY, feels that the C-arm business was down overall in 2007 because of the shutdown of GE/OEC. "Because OEC had the largest market share - and still have large and loyal following - they naturally got the majority of the trade-in systems . But when deliveries stopped, the trade-ins stopped, and that hurt everyone." says Gugel. He comments that Philips, Ziehm and Philips picked up some of the slack, but their trade-ins were far less numerous than OEC's. Gugel thinks that the outlook for 2008 looks busy from the second quarter on. He believes that when OEC goes back in business, though C-arm prices will fall into the basement, it should open the door to many more clinics and private surgery centers to acquire pre-owned systems at lower rates and open the doors for third world nations to buy newer machines.

North American Medical, Sweet Springs, MO, sells pre-owned medical equipment, including C-arms from GE/OEC and Philips. "My company is a medical equipment liquidator," says President Mitchell Guier, "we're always looking for quality used medical equipment to sell." He noted that business was okay in 2007, but he expects it will pick up in 2008 when OEC starts delivering their new systems, and there will more used units on the market for third parties like his company.


More projections for 2008

Mike Jackson, President of Combined Imaging Associates, Cottontown, TN, feels that because of economic factors, the demand fluctuates and "2008 looks down a bit." Combined Imaging Associates sells GE/OEC in all regions.

Scott Townsend, President of Townsend Surgical, LCC, Knoxville, TN, sells GE/OEC, Philips and Hologic C-arms. He expects a downturn in the economy, but says that will actually increase used equipment sales, and sees third-party service providers prospering.

Columbia Imaging, Inc., Columbia, MD, sells Siemens and GE/OEC C-arms in the mid-Atlantic region. President Wayne Horsman notes that the company's warranty for C-arms depends and is adapted to customers' need, but the average is six months. He feels that only the strong will survive. "ISOs need to provide quality and value in order to compete with the multi-nationals," says Horsman.

Pete Schliebner, President of Benchmark Imaging Group, Strongville, OH, states, "The demand for motorized film viewers has dropped significantly every year for several years." Schliebner went on to say that when OEC finally satisfies their obligations to the FDA, numerous used C-arms are expected to hit the market, and this will have a significant impact on the price structure of the used C-arm market. For these reasons and others, Benchmark Imaging Group will be focusing business on 'rad' rooms and refurbished systems.

David Denholtz, CEO of Integrity Medical Systems, Inc., Fort Myers, FL, tells us that Integrity sells 80 percent of its C-arms in the United States and 20 percent internationally.
Integrity Medical Systems' typical C-arm warranty covers all parts including the X-ray tube and image intensifier for six months to one year.

"Yes, third party will survive," says Denholtz, "but the DRA has had a definitive effect - driving demand for refurbished equipment."

Joseph Jenkins, President of International Imaging, LTD, Henderson, NV, sells and services GE/OEC and Siemens C-arms in North America, South America, and the Caribbean. The company supports all that they sell by keeping multiple systems in stock. Jenkins states that business was up in 2007 and down a little so far in 2008. He says that the company hasn't really been affected by economic factors because his business is totally international. "Third-party service providers will remain until technology (service software access) is denied," states Jenkins.

Editors note: The FDA had not rules on the re-certification of OEC's manufacturing operations at the time this article went to the printer.

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

Domestic
Bobby Aguillard, Performance X-Ray, AL
Scott Bolsta, WCMA, Inc., CA
Stephanie Espinola, JCF Engineering, Inc., CO
Michael Bushior, Advanced Medical X-ray, CT
David Denholtz, Integrity Medical Systems, Inc., FL
DOTmed Certified/100
Robert Serros, Amber Diagnostics, FL
Bill Adkins, National X-Ray Corporation, FL
DOTmed Certified
Sherman Weston, U.S. Imaging, Inc., GA
Michael Cozzi, Computron Medical Corporation, IL
Nikki Pluta, JEM Medical, Inc., IL
Travis Nipper, Clinical Engineering Consultants, Inc., KY
Dan Bond, Huestis Medical, MA
Dan Edwards, Image Diagnostics, Inc., MA
Steve Walsh, Eastern Diagnostic Imaging, Inc., MA
Wayne Horsman, Columbia Imaging, Inc., MD
DOTmed 100
Mitchell Guier, North American Medical, MO
DOTmed Certified/100
Joseph Jenkins, International Imaging Ltd., NV
Brian Schumer, Crown Medical Systems, LLC, NY
Leon Gugel, Metropolis International, NY
DOTmed Certified/100
Don Bogutski, Diagnostix Plus, Inc., NY
DOTmed Certified/100
John Kollegger, Bay Shore Medical, NY
DOTmed 100
Jim Miller, Miller Medical Imaging, OH
Darrel Kile, Classic Diagnostic Imaging, OH
DOTmed Certified/100
Pete Schliebner, Benchmark Imaging Group, OH
DOTmed 100
Richard Stock, Radiological Imaging Services, PA
DOTmed Certified/100
Ward Huddleston, Med Image Systems, Inc., TN
Mike Jackson, Combined Imaging Associates, TN
Scott Townsend, Townsend Surgical, TN
Lynn Williams, Advanced Imaging Management, TX
Matthew Smith, Emerge Medical Imaging, TX
Russ Surratt, Bighorn Biomedical Services, Inc., WY
DOTmed Certified

International
Felix Donoghue, FX Rays & Imaging, India
Alvaro Di Lorenzo, Ingenieria Tecnica Medica Ltda, Uruguay
Faisal Mirza, Sunshine, Pakistan
Carlos Duran, Ingenieria Clinica, Columbia

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