In the end it is a financial question, Williams says. "The DRA has lowered reimbursements; people still want equipment but they can't pay now what they were paying for it before, based on the reimbursements." Williams notes that centers have not stopped buying equipment, and new imaging centers are still being built at the same rate as a year ago. What Williams sees is the independent centers adjusting their equipment buying patterns by looking hard at the used and refurbished markets as well as the OEMs, then making decision based on cost-effectiveness.

Others in the pre-owned industry have similar outlooks. John Stringer handles sales for Huestis Medical, a division of Best Medical International, in Cullman, AL. The company offers re-manufactured modalities and service worldwide to hospitals, clinics, and private physician practices. Business for Huestis is still excellent, even with the economy and DRA setbacks, Stringer reports. "Many of our clients are beginning to step back and realize the importance of purchasing re-manufactured modalities. A truly re-manufactured modality performs and appears like new and works like new." Stringer says that his company also offers a longer warranty and cost savings of thousands of dollars with some systems, which frees up funds the imaging centers need for other areas.


"When modalities look new, perform new, and cost less, why waste thousands of dollars?"
says Don Bogutski, President and founder of Diagnostix Plus, Rockville Centre, NY. Bogutski notes that the DRA is but one of the marketing forces at play in the healthcare industry, and not unexpected. Bogutski says the cuts are a predictable governmental response considering the growing national debt of oil, war in Iraq, and fewer domestic exports - something had to give economically. Consumers had come to expect cutting-edge diagnostic imaging as common practice. Many centers responded by investing in high-tech equipment that was not frequently needed, but offered a selling point to patients. Bogutski says a 4-slice CT, for example, may cover 80-85% of a facility's needs and there are many ISOs offering cost-effective service options. A 256-slice CT, by comparison has service contract costs that are up to 500% percent more (not to mention the acquisition costs), and the service can't be contracted outside of an OEM.

"The DRA Medicare reimbursement cycle did not affect independent facilities for the first 90-120 days of 2007; they were still receiving reimbursement on the last of the old Medicare billing 2006 cycle. This slow phasing-in of the cuts lulled the free-standing centers, which became the proverbial 'deer in the headlights on a dark road' once the actual cuts took effect," according to Bogutski. From about April to December 2007, purchases of new equipment basically ground to a halt. The savings that free-standing centers can realize from pre-owned equipment has turned out to be an advantage for the third-party dealers and brokers, and service providers. Right now, Bogutski says, the imaging industry is no longer caught in the headlights, but has seen the light, and faced with the economic realities imposed by DRA, Bogutski sees the interest in refurbished equipment and independent service continues to be on the upswing and should stay strong for the foreseeable future.

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