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Equipment dealers will need GPO contracts to compete

by Loren Bonner, DOTmed News Online Editor | July 18, 2013

We have a contract with the Greater New York Hospital Association for refurbished equipment and our safe CT dose reduction product. That puts us in a great position here in New York. And we're pretty close with three other major GPOs nationally, so that's how we focused our strategy.

DMN: How does refurbished medical equipment fit into the changing health care landscape and what opportunities are out there for sellers and dealers?
JW: Long ago, whatever was presented at the RSNA people went out and bought it. There was easy money out there and entrepreneurs could open up an imaging center next to a hospital and do well. Those days are long gone. Today, people are looking at return on investment and if you don't get that, you won't buy equipment — be it new or refurbished.

The Affordable Care Act should have a purely positive effect on refurbished equipment sellers and dealers. It is all about driving costs down for the hospital-based providers. Do you really need a new 128 detector CT? Do you really need a new 16 channel MRI or a new 3T to make a differential diagnosis? Do you really need to replace your angiographic and special procedure labs? For the most part, the answer is no. If you do need to replace a piece of imaging equipment, is a new product really worth up to twice as much as a refurbished product? Ask yourself the question: will CMS reimburse me more for having a new CT? A new MRI? Again, the answer is no. So, if you want to compete as an ACO, you are going to need to find ways to maintain a lower cost basis. Refurbished equipment, or extending the life of your current equipment, combined with aftermarket add-ons and excellent lower-cost service contracts on your equipment answers the need for a lower-cost basis perfectly well.

DMN: Any final advice for facilities who are preparing for large equipment purchases?
JW: Again, you'd better take a hard look at the overall costs of ownership between buying new technology versus quality refurbished products. Understanding that you don't get one cent extra from CMS just because you have a new piece of equipment should give you pause as a buyer.

Where you still see private imaging centers, and the number is shrinking fast, the trend over the past several years is for the radiologists to purchase refurbished rather than new equipment for their centers. This same mentality should also be a viable solution within the ACO.

Finally, one should also consider cost effective, efficiency-producing aftermarket products like CT IR solutions and dose monitoring solutions.

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