by Colby Coates

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.

The business of supplying new and used equipment for use in a wide variety of endoscopic procedures is steady, and shows no signs of abating.

An aging baby boomer population, and its preoccupation with taking early preventative steps to avoid long-term medical problems, leads most observers to predict that this positive growth trend will continue in a multi-million dollar market. Generally, new scopes range in price from $20,000-$50,000, depending on the type. Endoscopy is used for diagnosis and therapy in the respiratory, gastrointestinal and urinary tracts, for plastic surgery, in a wide variety of applications for the male and female reproductive systems, and arthroscopic
equipment is a sub-set of endoscopy.

Moreover, new technological developments such as highdefinition image clarity and narrow-band imaging are expected to drive the market in a positive vein for years to come.

According to Edward Soto of The Scope Exchange, Greensboro, NC, "The move to high definition is one [development], as well as the ability of the practitioner to use image capture software to attach images to his records."

That's a point endorsed by Comel Cacuci of Apex Endoscopy, Lawrenceville, GA, who points specifically to "significant= advances in rigid endoscopes that include smaller diameters that allow more light to pass through, providing
brighter, larger and crisper images."

And Stuart Jackson, president, Pro Scope Systems, Cincinnati, OH, notes that, "the manufacturers have developed higher resolution systems with instruments that have smaller outer diameters and larger working channels, facilitating more therapeutic procedures being performed on an outpatient basis." That, he says, "spares patients potential surgical procedures" and, at the same time, "lowers the overall cost of health care, benefiting both the government and private insurance providers."

Finally, ongoing developments in the sterilization of scopes have the potential to unleash the replacement of existing equipment with a new generation of scopes, further heightening long-term demand for both new and refurbished scopes.

Endoscopy a Diagnostic Workhorse

In brief, endoscopy means looking inside the body using either a rigid or flexible scope (depending on the internal organs being examined), sometimes according to an individual physician's preference.

It's widely known that physicians are extremely loyal to particular scopes manufactured by particular OEMs, often the equipment that they were first trained on.

The endoscope usually has several channels containing a light source, a lens and camera, and such channels as necessary to perform a wide variety of procedures.

Endoscopes run the gamut in size, are characterized as being minimally invasive and, in addition to being a primary diagnostic tool, sometimes are used as an alternative to surgery. Various scopes are used to perform biopsies, repair sports-related injuries and remove polyps and other growths.

Though not a primary application, endoscopes are also used in a few non-medical situations including architecture, law enforcement (e.g., inspecting suspicious packages) and the analysis of complex, nanotechnology-based systems.

The OEM Picture

The leading endoscopic equipment manufacturer, Olympus, has certainly lived up to its name, as today it looks down on the rest of the field from its "king of the mountain" status. Though estimates vary, the company is thought to have at least a 75% share of the market. Other players in the discipline include: Pentax, Fujinon, Storz, ACMI,Wolf and Stryker.

Although lengthy FDA reviews often discourage newcomers from entering the market, such companies as Vision Sciences, for example, are looking to expand their presence by bringing technological advances to the fray. Even so, new innovations often take several years before approval and introduction to the market.

According to Philip Mothena of Simple Solutions, Inc., Blacksburg, VA, "Olympus seems to have a greater market share in flexible endoscopy," indicating the company's brand name recognition is especially strong.

Adds Dan Spivey of Tampa-based Front Line Medical Corp., "Olympus dominates the world market. They are the Mercedes-Benz of endoscopes in that nearly every part can be removed and replaced with a new part, rendering even an older model scope as new." Spivey does, however, have issues with the company's pricing and level of post sales service.

As is the case with other pieces of medical equipment, the introduction of lower-cost devices from manufacturers in other countries poses both performance and competitive threats. This problem is especially prevalent in countries where the healthcare system is not as advanced nor as well funded as in the U.S. or Europe.

Vasant Sohoni of Vasant Sohoni & Associates, which does business in Mumbai, says, "There are too many brands, many of them newcomers from low-cost producers like China, which are fragmenting the market." In addition to the fragmentation, however, looms the prospect of inferior diagnosis and therapy from similarly poor equipment.




The Role of The Independent Service Organization

As new developments move the market for endoscopic equipment, buyers face the prospect of what to do with older models.While the OEMs show diminished interest in such equipment, it does open the door for independent service organizations that refurbish, service and repair the scopes. Some ISOs specialize in specific scopes, while others tackle the full range. In addition, ISOs are more responsive to hospitals' needs, and better able to deliver whatever service is required without getting bogged down in the bureaucracy that characterizes OEM procedure.

Asked about ISOs' prospects in picking up the slack, Dave Bello, who runs Endoscopy Replacement Parts, Newberry, FL, suggested, "It is difficult to pinpoint any one challenge or opportunity. I believe that quality in the aftermarket is a challenge that we are helping to improve everyday."

Referring to the sometimes-contentious relationship between OEMs and ISOs, Scott Mason of Endoscopy Resources, Port Orange, FL, says, "The biggest opportunity is that many facilities are willing to use an ISO for more repairs, due to the over-inflated prices from the OEMs."

The actual work involved ranges from the simple to the complex. In some cases, ISOs rebuild an entire scope, while others concentrate on cleaning or replacing a scope's lenses, lights or the functions of working channels. Scopes are often damaged during routine operations, meaning that many DOTmed-registered companies have ample work.

Alberto Voli of Med Fix Solutions, Tucson,AZ, says, "the easiest repairs are those that involve broken lenses. The hardest," he adds, "are those requiring
repairs to a scope's fiber optics."

Another observation about the repair and refurbishing side of the business comes from Mitchell Guier of North American Medical, Sweet Springs, MO. For the succinct albeit accurate Guier, the main issue facing ISOs is the acquisition
of "parts, parts, parts."

One huge factor that's also propelling the ISO side of endoscopy is financial.
As pressure to control costs looms larger with every passing day, more and more hospitals are considering the advantages of purchasing refurbished equipment. It's generally estimated that refurbished scopes cost approximately half of what a new piece of equipment sells for.

Cost savings extend to the repair side too. While an OEM might charge something in the neighborhood of $8,000-$10,000 to overhaul a scope, an ISO might price the same overhaul anywhere from $3,000-$5,000.

From One Patient To The Next

Finally, there's some debate as to exactly how sterile is sterile when a particular scope is used from one patient to the next. Before each successive use, and depending on the type of scope, it undergoes an intense sterilization, sometimes using chemicals, autoclaves and other methods.

The question asked by some, including Carlos Babini of Vision Sciences, Orangeburg, NY, is whether any matter remains in a channel after it's been sterilized. "There is a potential that material can be passed from one patient to another," Babini says.

That contention has led Vision Sciences to introduce a throwaway sheath that is placed over a scope prior to its insertion into a human being. Once the procedure is completed, the sheath is discarded.

The company, which has 50 patents on this and similar innovations, has already introduced the sheath to European medical communities. Next up is displaying what Babini says is a breakthrough to conventions of urologists and gastro-intestinologists.

"The sheath covers the tube," he says, "and the scope never comes in contact with the patient."

Though the jury remains out about the sheath, several manufacturers are known to be working on modifications that guarantee sterilization.

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

Domestic
Alberto Voli, MedFix Solutions, Inc., AZ
DOTmed Certified
Scott Carson, Med1Online.com, CO
Michael Dudeff, Metro Medical Ind., Inc., CT
EW Schadow, FLS, FL
Adrian Bias, Advanced Endoscopy, Inc., FL
DOTmed Certified
Harvey Buxbaum, HMB Endoscopy Products, FL
Jorge Fernandez, ABC Med, Inc., FL
David Bello, Endoscopy Replacement Parts, Inc., FL
Bruce Mason, Advanced Endoscopy Devices, Inc., FL
DOTmed Certified
Scott Mason, Endoscopy Resources, Inc., FL
DOTmed Certified/100
Jacob Glaser, Endoscopy Specialists, Inc., Fl
DOTmed Certified
Dan Spivey, FrontLine Medical, FL
Cornel Cacuci, Apex Endoscopy, Inc., GA
George Albulescu, Medifix, Inc., IL
Sam Kanan, Laproman, MI
Mitchell Guier, North American Medical, MO
DOTmed Certified/100
Edward Soto, The Scope Exchange, NC
Adam Rudinger, Lex-Tech, Inc., NY
Carlos Babini, Vision-Sciences, Inc., NY
Stuart Jackson, Pro Scope Systems, OH
DOTmed Certified
Jeff Schell, EndoscopyMD, SC
Scott Townsend, Townsend Surgical, TN
Addam Arrington, Pilot Medical, Inc., TN
DOTmed Certified
Shannon Moore, STAT Biomedical Sales and Rentals, Inc., TX
DOTmed Certified
Philip Mothena, Simple Solutions, Inc., VA
John Mendez, Med-Lab Exess, VA
Monte Montain, BPI Medical, Inc., WA

International
Antonio Alves Dos Santos, Video Imagem, Brazil
Ed Mundle, Endofocus Medical Technologies, Inc. - Endofocus, Canada
Marco Pazmino, Alem, Ecuador
Vasant Sohoni, Vasant Sohoni & Associates, India
Mario Galluzzi, MD, Italy
Nasir Khan, Deans Medical Equipment, Pakistan
Samuel Chilcon, Techno Standard S.A.C., Peru
Edwin Pelet, MedServ Latin America, Puerto Rico

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