From the June 2011 issue of HealthCare Business News magazine


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.”

June 2011 Magazine

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