The bottom line for CT is not just its reimbursement rate but the growth in procedures that now top 70 million per year. While the rate of growth has slowed to about 7% from double digits three years ago, that's still not too shabby. The OEMs told DOTmed Business News that they anticipate the markets should unfreeze in the second half of this year.
Regarding access to capital, which is a challenge of our current economic crisis, it bears noting that Philips Healthcare provides financing through Philips Medical Capital, a joint venture with AAA-rated Dutch bank De Lage Landen.
As for long-term trends, watch for forthcoming clinical studies on the effectiveness of CT in applications such as CT colonography, which suffered a setback in February when Medicare said it doesn't want it covered. (Note that the final rule was not out as of this writing.) CT as a modality is in need of a "killer app" like virtual colonoscopy that is routinely used for widespread screening in the healthy population. Another example might be screening symptom free smokers to spot early lung cancer. Meanwhile, cardiac and ER remain important applications for CT and evidence of effectiveness is mounting.
The bottom line
for CT is not just
its reimbursement rate
but the growth
in procedures that now
top 70 million per year.
Mixed Signals on Third Party Impact
Fewer new scanners are being sold, and those that are sold may suffer from a reversal of recent slice wars. "People are being very cautious, measured and calculating," said Greg Kramer, President, C&G Technologies, Inc., Jeffersonville, IN speaking of CT comparison shoppers. "People are asking - do I really need a 64-slice CT? They may say a 16-slice is just fine." Providers may not be able to do a cardiac exam on a 16-slice machine, but for common applications like chest or spine it does the job. "There are also hospitals that never considered buying refurbished equipment before and are now doing it," Kramer said.
"People were waiting till after the election and to see what happens with the economy," said Robert Serros Jr., President and CEO, Amber Diagnostics, Orlando, FL. "All industries took their foot off the accelerator. Now people are revisiting their capital expenses and looking at refurbished equipment without a doubt because they have to." Conservatively, purchasers can save 30% and often much more, by opting for used equipment. As an example, one independent company reported that a new 16-slice CT that goes for $500,000 can sell for $175,000 used on the open market. "Reimbursements always play a large role in driving the market, but the recent economic downturn has only served to make our business model more attractive," said Greg Mullen.
