The Market May Be in a "Pause Mode"

Overall, the market for new equipment may be at somewhat of a standstill, several experts reported.


"The U.S. [market is] in a pause mode right now. It is trying to digest three distinct forces -- the DRA, political transition, and changing technology. Once those free up, the market in the U.S. will replicate [the growth] we see globally," said Dominick Smith, General Manager of Marketing and Advanced Applications for CT Global Business, GE Healthcare, Waukesha, WI. "The fundamental demand in terms of patients needing procedures is there. People are not getting younger and there are a lot of fundamental demographics which are favorable to healthcare," he said of America's aging population.

The OEMs did not deny that prices are down for new CT scanners. "There is a natural price reduction that happens over time and we have seen a slight reduction of the existing multi-slice platform," Cooper said. "There has been a big decline in the market in the free-standing imaging center space. However, there are increased opportunities in the hospital space. There is consolidation in imaging centers. A lot of hospitals are trying to partner with the imaging centers .... There is definitely going to be an increase in the opportunities to provide imaging services or equipment to these providers."

Some industry insiders predict a greater demand for the more expensive, higher-slice and faster scanners.

"There is a fair amount of consolidation going on among imaging centers. Where there is consolidation, there is a movement toward larger scanners, which do more volume," said Martin E. Zimmerman, President and CEO, LFC Capital, Chicago, IL, specialists in equipment financing. "The cost cutting is driving providers to examine all possibilities to generate greater efficiency. And that means merging or consolidating, reducing overhead, and providing better service to attract patients. Having the latest equipment does count for something when it comes to referrals, more than that is the ability to handle high volumes and variable volumes."

"The only ones that will be left are big centers that can afford to buy new OEM equipment," predicted Sal Aidone, Vice President, Deccaid Services Inc., Deer Park, NY. "But that is not a way to reduce healthcare costs. And it will put the small imaging center out of business [as well as] brokers that sell older equipment. It hurts everybody in the industry."

"I have noticed a lot of free-standing centers in the Southeast closing due to not being able to afford an 8-slice or higher scanner. The larger, health system-owned centers can afford 16-, 32-, or 64-slice systems. They get a better deal [when buying CT technology] because of the higher volumes of [multi-modality systems they purchase from manufacturers]," said Billy Paniaha, Right Coast Medical Imaging, Huntersville, NC.

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