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DOTmed Industry Sector Report: CT Sales and Service

by Barbara Kram, Editor | June 13, 2009

You are typically selling the [new CT] in the million dollar-plus range and the service contracts can be $130,000 to $200,000 per year," said Ted Nemetz, Vice President of Service, Toshiba America Medical Systems. "Operating costs may not meet that so we have to be more creative and flexible on the service side to wrap the deal together for the customer." Toshiba, with nearly a 90% capture rate for service contracts on its equipment, enjoys an impeccable reputation in the marketplace with top rankings for service from major research firms. Its line of Aquilion CT scanners has not been in the market long so that few third parties are servicing them and few are available for re-sale. "We don't have that many out there," Nemetz said. "It's like a Toyota Corolla thatkeeps running."

While Toshiba would not tell us how many service engineers it employs, it was clear that the quantity and coverage they hold, as well as its quality are big reasons for the high service ratings. But hospitals are cutting corners here, too. "Many clients are choosing to modify or reduce their service contract coverage on CT to a bare minimum and put greater focus on the [other] modalities that generate the revenue," Knight said.

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OEMs and service companies offer a range of contracts from full parts and
service including the pricey X-ray tube, to a partnership deal where the hospital biomedical staff assumes some risk, down to a time and materials bare bones contract.

Preventive maintenance is critical and must not be skipped. ISOs suggest that the OEM general requirement for quarterly PM is a minimum standard. "You MUST keep a good eye on the rotate brushes and rings. X-ray tube dielectric oil must be checked; oil fans and filters cleaned. If a PM is done only four times a year as many OEMs recommend the mechanical systems must be inspected," urged Sal Aidone, Vice President, Deccaid Services, Inc., Deer Park, N.Y.

CT: A "Green" Machine?
You may not think of a CT scanner as part of the solution to the world's environmental challenges but the industry is doing its part. Both ISOs and OEMs have programs in place. For example, ISOs pride themselves on recycling equipment back into the marketplace, an inherently conservative business. "Any reprocessing has a benefit," said Serros. "We also chop up machines for parts and scrap metal. A recycler separates the metals by type after we take out the major components." But the best way to save the planet is by design, which the OEMs are pursuing in their equipment.

"A lot of our heritage comes from Western Europe, which tends to be more progressive in terms of sustainability and 'green' initiatives. That has an impact in our product roadmap today," said Jason Plante, Director of CT Product Marketing for Philips Healthcare. He explained that lead is a common metal used in imaging equipment to block radiation, but the X-ray tube in the Brilliance iCT is the industry's first "green" glassware since it contains no lead.