Shopping for Equipment — Industry Pros Offer Tips on Buying What You Need
By Kathy Hardy
Vol. 14 No. 9 P. 24
Looking for the right imaging equipment involves making decisions that impact treatment, patient and operator safety, and the hospital or imaging facility’s overall bottom line. Industry professionals say radiology equipment buyers need to think about more than slices or magnet strengths. For instance, should they buy or lease? What about purchasing preowned equipment as an alternative to new devices or upgrading existing equipment? How should facility operators evaluate services? Overall, how should imaging buyers assess their needs and how does that translate to what they should purchase?
“You need to ask questions, and don’t just buy based on the best price,” says Mike Ghazal, CEO of Zetta Medical Technologies. “Many times, executives hear the sales pitch and go with the best price. Buyers should find out the qualifications of the sales people and technicians handling the machine. They should visit the manufacturer’s facility and have them demonstrate what they’re talking about when it comes to the technology they’re selling. See firsthand what goes behind the product.”
Potential customers frequently ask Doug Ryan, vice president of Samsung Electronics America’s health and medical equipment division, what criteria they should consider when shopping for radiology devices. “I turn the question back to them and ask ‘What are your challenges, and how can we help you address them?’” he says.
Know What You Do
Medical Structures President Tom Miller asks customers to reflect on their patient base then determine what they’re trying to accomplish. “What type of patients are you seeing 90% of the time?” he asks. “You can send out the remaining 10% of patients who need more specialized imaging services. Build your financial model around this and then look at the technology that fulfills the needs of the majority of your patients.”
Miller’s company provides permanent or temporary attached or freestanding structures for hospitals or imaging centers to handle new or growing radiology services. Specializing in MRI, CT, PET, and radiology and cardiac cath facilities, he and his brother, Tim, see their clients struggling with equipment purchasing decisions on a regular basis.
Zetta Medical Technologies, based in Lake Zurich, Illinois, provides MRI and CT services as well as installations and upgrades of refurbished and preowned equipment and replacement parts. Whether new or preowned, Ghazal says that when qualifying equipment for potential purchase, the criteria for buying can be the same.
One fact to consider is the longevity of a particular modality and the progression of imaging technology. What does the imaging crystal ball show as the future’s leading-edge technology? No one wants to spend hundreds of thousands of dollars on equipment that will soon be obsolete.
“Will mainstream modalities be here in 10 years?” Ryan asks. “Look at the advancements in digital imaging and the changes that have occurred in that technology. Imaging professionals should look at equipment that can be scaled upward. You’re buying for the future.”
Samsung’s health and medical equipment division itself is a new development in the imaging landscape, announcing its entry into the industry at RSNA 2012. The Ridgefield Park, New Jersey, company expanded its presence in the medical equipment industry with its GEO medical device brand of ultrasound, digital radiography, and in vitro diagnostic equipment.
Ryan cites the progression of CT and MRI machines in the past 10 years as evidence that facilities need to think one step ahead of today’s needs. That’s where upgradeable equipment could be a viable and cost-effective alternative to replacing major components, such as an MRI magnet, just a few years after an initial big-ticket purchase.
“The key is to remember that everything is changing,” he says. “There’s been more change in the health care industry in the last 24 months than there’s been since the passage of the Medicare Act in 1965. With all the change, medical facilities need to think about what they need and how they can move forward.”
Miller notes that leasing equipment can be a good way to “test the waters” and see where a particular technology is headed. Customers can always upgrade as technology advances. “If you’re not sure where the business is going, the best thing to do may be to lease or purchase used equipment and place it in modular structures,” Miller says. “With this strategy, a facility is better able to make their business profitable. Unless you’ve been in business a long time, this is a good way to go.”
Once a hospital or imaging facility manager makes the decision to move ahead with the business end of the purchase, the next step is to assess the purpose for acquiring this new piece of equipment. “Make sure the machine you’re considering meets your objective for buying the machine,” Ghazal says. “What’s your need and what’s the purpose for this new piece of equipment? If you need to do cardiac CT scans, you need to purchase a machine that’s cardiac ready. However, not all 64-slice machines are cardiac ready, so check the specs before making your final decision.”
In another example, Ghazal says if a customer wants to purchase a new MRI machine in order to operate a low-consumption magnet, the customer should make sure the system has zero helium boil-off. “If your objective is to save money on helium, you need to know if it has zero boil-off,” he says. “But not every system meets that criteria.”
Next, Ghazal recommends buyers review the condition of the high-cost/high-fail aspects of the equipment they’re considering. He suggests that a qualified engineer evaluate any device before purchasing to check the machine’s condition and performance. “For example, with a CT machine, you need to know the life expectancy of the tube,” he says. “Is it at the beginning or the end of its life? If you install a machine and then you need to replace a key component, then the purchase isn’t very cost-effective.”
Another factor to consider is the tech-savvy side of the facility’s user base, especially when it comes to something Ryan refers to as “smart health care.” The cost model comparison between today and the future includes consideration of using phones and other mobile devices. This is an important consideration as radiology practices continue to welcome new, younger practitioners fresh out of medical school. “Do we really need a keyboard and a mouse anymore?” Ryan asks. “Residents today have Twitter accounts and are comfortable using mobile devices.”
When it comes to parts, Ghazal says to make sure they all meet the original equipment manufacturer (OEM) specs, particularly when it comes to performance levels. The same concerns apply to software, which can negatively affect the machine’s integrity if it does not meet OEM specs. “If a machine was repaired with unauthorized parts, you need to consider how that will impact performance of that machine,” he says.
In addition, buyers should make sure their service company has replacement parts on hand. Companies that are low on inventory may need to source parts to cover their service obligation or try to repair components instead of installing immediate replacements while repairs are under way.
Beyond the actual piece of equipment, buyers also should consider where it will be housed, Ghazal says, particularly which floor of the building. If specialized rigging is necessary to move the new piece of equipment into place, it could cost more than the actual machine.
Check Out Support Staff
When looking at support services, Ghazal says buyers should determine that the company employs qualified personnel rather than subcontracting system repairs to another company with which the buyer may not be acquainted. “Make sure the company is using proper tools to ramp down your magnet to deinstall, package, and rig the device out of the hospital,” he says. “They also need to know how to properly cable up and calibrate machines to OEM specs. In addition, they should also use the proper trucks to safely transport equipment, especially when it comes to the MRI magnet.”
If new equipment is part of a facility addition, Ghazal says to make sure there is an open line of communication between the architect and equipment vendors. In addition, engineers, from structural to electrical, should be involved in all aspects of the project. “Share drawings and information about the design of the space,” he says. “Make sure everyone is on top of what their roles are in the project to minimize mistakes. You could have a big mess on your hands if they’re not coordinating all efforts.”
Also, when it comes to on-site work conducted by equipment vendors, Ghazal recommends that buyers ask for a certificate of liability insurance in their company’s name prior to allowing any work to begin. This certificate should shift the responsibility from the imaging facility to the service provider in the event of injury of service personnel while on site.
Industry professionals agree that some of the decision-making process can change depending on whether customers operate a small or large facility or whether they are a for- or nonprofit entity. Ryan says small facilities need to consider the value in making new equipment purchases. Larger facilities may have greater advantages when it comes to making the final decision on which machines to purchase, he says. For example, research is one way to learn more about equipment, and applying for research grants is one way to make that happen. This may not be a viable option for a smaller facility.
“Looking at clinical trials is another way to evaluate equipment,” he says. “Clinical trial results will prove how equipment will affect outcomes.”
While analyzing the nuts and bolts and reviewing spec sheets are vital aspects of making purchasing decisions regarding radiology equipment, Ryan introduces another aspect of the decision-making process: health care reform. Imaging is at the forefront in ongoing discussions involving health care cost controls and containment, with radiology targeted as a high-cost, high-utilization service. This makes it even more imperative for hospital and imaging center executives to make the most cost-effective choices for their organizations.
Ryan points to cost-containment measures introduced with the Affordable Care Act (ACA) and their overall fiscal impact as factors driving decisions today regarding new imaging equipment purchases. Cost controls will need to be evolutionary, not just a one-time event, and hospitals and imaging centers are making decisions today for the long term.
“What’s changing with the health care model in the US are cost controls and containment,” he says. “Hospitals and imaging practices are looking at what affects patient workflow and patient diagnosis. Will bringing in a new piece of equipment improve workflow speed and, with that, reduce costs?”
According to Ryan, readmission is another aspect addressed by the ACA that also could be reduced by installing the right equipment for the facility’s needs, particularly in triage areas. “Ultrasound and IV diagnosis have both changed so much in the last four to five years,” he says, “especially in the emergency department, where personnel need to rapidly adapt and may not be able to keep up. Administrators should consider how a piece of equipment can positively enhance an inpatient diagnosis in the emergency department and in the patient’s treatment plan.”
Also along financial lines, Miller cites mistakes in which facility executives, particularly those setting up new imaging practices, purchase all new equipment from OEMs but then can’t make the purchases work because of circumstances such as a lack of reimbursement. Buyers need to consider reimbursements before making final decisions on new equipment, he says, using MRI as an example. “Most coils are eight channels, and that works for many of our customers,” he says. “They can always upgrade to 16 or more later if they start to get into offering more specialized imaging services. Some groups are pushing for 64-slice machines for cardiac purposes. That’s OK, but there’s no reimbursement there.”
The phenomenon of chasing after new technology just for the sake of having the latest and greatest equipment does play a role in some equipment purchases. “There will always be new technology,” Ryan says. “But what they need to do is look for things that are important to patient care. They need to consider which equipment is best for them to give a better diagnosis for the patient and outcomes for the hospital.”
According to Ghazal, the customers he deals with are more likely to stick with products they are familiar with than pursue the latest devices just because they are new to the market, especially when it comes to big-ticket items. “They may want to try the latest technology in smaller items but not with big things, especially because of the price,” he says. “They think a long time before spending $400,000 on a piece of equipment.”
Despite a marketplace full of uncertainty regarding reimbursement and the ACA, Miller says he still finds customers who want all new equipment as it hits the marketplace, “but they pay the price.
“You need to make decisions that are best for the practice,” he cautions.
— Kathy Hardy is a freelance writer based in Phoenixville, Pennsylvania.