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  • MARCH 2008contentsfeatures

    departments

    10 Code Blue?Hospitals, Independent Healthcare Centers Feel the Pain

    12 Hospitals Seek New Approachto TrainingOutsourcing with Benefits

    13 IAMERS Takes Leadership RoleLabeling Used Medical EquipmentActs Before FDA

    14 Medical TrailersThree's the Right Crowd

    19 Lab EquipmentFrom Alchemy to Diagnostics

    22 PACSCrowded, Complex, Competitive Market

    28 LasersIt’s Sky's the Limit for Potential Applications

    2 Letter from the Editor4 Letters to the Editor6 Hospital & Health News8 What’s New32 People & Companies43 Marketplace & Classifieds48 Blue Book Price Guide 28

    22

  • DOTmedbusiness news I MARCH 20082

    letter fromthe editorBackstoryIn the news business, there’s the story you see, hear or read.

    There’s also another one, the backstory. The story behind the story, ifyou like. Often, they’re far more interesting than the one for the consumer.

    So here’s one backstory from this issue of DOTmed Business News.In our medical trailer feature you’ll find mention of KC Spurlock,

    founder of Spurlock Specialty Vehicles. The Tennessee company builds crit-ical care and other emergency vehicles to “signature” designs, Spurlock says.

    Almost rings of a bit of Hollywood hyperbole. Unless, of course, yourmoniker once used to be KC “Hollywood” Spurlock, champion IHRA“funnycar” drag racer, who once hurtled down quarter-mile drag strips, strappedinto 1000 horsepower, exotic fuel burning, fire spewing bombs on wheels.

    Professional drag racing is not a sport for anyonewho comes up short in thenerves of steel department. To succeed in it, as Spurlock clearly did, also takesenormous dedication, commitment and a keen aptitude for business.

    Sponsor dollars drive all forms of auto racing and the drivers that winchampionships are part of multi-million dollar, ultra slick teams. Such wasSpurlock’s, whose purple “funny car” was dressed in Fruit of the Loom livery.

    Racing is certainly a sport about details, minute, painstaking ones.When a cross-threaded lug nut costs a driver a race win or puts him into

    a concrete wall at 300 miles per hour, manic preoccupation with systems,checks and balances is understandable and requisite.

    And that’s the same approach Spurlock brings to his medical and emer-gency coach building business.

    “We started with a clean sheet of paper,” he says. “We went to thepeople in the field who use the equipment and began each conversation bysaying, ‘pretend we know nothing’.”

    That’s an approach with roots from Spurlock’s “Hollywood” side, wherecrew chiefs are always asking drivers, “How’s it handle?”, “Tires grippyenough?”, “Too much tire spin at 15,000 rpm’s?”.

    Applying that kind of attention to detail won Spurlock many drag races.Now, it’s being used to design and produce emergency and critical care ve-hicles, exactly like those on duty at racetracks around the world.

    Colby CoatesEditor-in-Chief

    DOTmed Business News

    DOTmed provides the DOTmedbusiness News to its registered users free of charge. DOTmedmakes no warranty, representation or guarantee as to the accuracy or timeliness of its content.DOTmed may suspend or cancel this service at any time and for any reason without liability or ob-ligation to any party. All trade names, trademarks and trade dress contained herein belong to theirrespective owners and are used herein with the intent to represent the goods and services of theirrespective owners. If you think your trade name, trademark or trade dress is not properly repre-sented, please contact DOTmed.com, Inc.

    March 2008PublisherPhilip F. JacobusEditor-in-ChiefColby Coates212-742-1200 Ext. [email protected] EditorBarbara Kram212-742-1200 Ext. [email protected] Creative EditorBradley Rose212-742-1200 Ext. [email protected] DirectorsStephanie BiddleRudy CardenasReportersJoan [email protected] [email protected] Johns212-742-1200 Ext. [email protected] EditorRobert Garment212-742-1200 Ext. [email protected] Manager: Mitch Aguirre212-742-1200 Ext. [email protected] Executive: David Blumenthal212-742-1200 Ext. [email protected] Executive: Mike Galella212-742-1200 Ext. [email protected] Executive: Sandy Jablonski212-742-1200 Ext. [email protected] Executive: Wayne Saffold212-742-1200 Ext. [email protected] ReleasesIf you have news regarding your companysubmit it to: [email protected] WritersIf you have an article or feature story youwould like the editors of DOTmed BusinessNews to consider publishing, submit it to:[email protected] to the EditorSubmit letters to the editors to:[email protected]

    AuctionsIf you want information about auctioningequipment on DOTmed.com, please call:212-742-1200 Ext. 296, or email us [email protected]

    DOTmed Business News is published byDOTmed.com Inc., 29 Broadway, Suite 2500,

    New York, NY 10006

    Copyright 2008 DOTmed.com, Inc.

  • DOTmedbusiness news I MARCH 2008 www.dotmed.com4

    letters to the editorReMedPar’sEd Sloan LaudedAn outpouring of appreciation for EdSloan, who is retiring from ReMedPar(DMBN, January, 2008), is apparentfrom DMBN readers’ emails.

    “I have dealt with Ed Sloan of ReMed-Par for the last 14 years. It truly has beena pleasure doing business with him andhis counterparts. He has always run asmooth and honest operation.”

    Cesar MairenAmpronix Inc.

    “I just wanted to go on record sayingthat I have known Ed during his entiretenure in this industry. There has neverbeen a more honest and decent person towork with. He is truly an example of anice guy that can be successful too.

    Scooter ChildsG-Tech Medical Services

    “Ed is a true giant in our industry. Hewill be missed.”

    Rick StocktonAtlas Medical Technologies

    Good Luck to Mr. Sloan!Fred Jackson

    Custom Trailerwerks, Inc.

    Riggers andCraters CheeredI wanted to get in touchwith you (writer JoanTrombetti) once again tothank you for all of yourhelp with the DotMed arti-cle about Riggers andCraters (DMBN, February’08). I read the articletoday and it turned outvery well.

    Aaron BuckleyChick Packaging Group, Inc.

    Doctor DiagnosesOne ParticularHealthcareAilmentThank you for yourDecem-ber coverage about issuesrelating to Universal HealthCare in the USA. Howironic that the featured arti-cle originates in Pennsylva-nia, where out-of-controllawsuit awards for “painand suffering” (non-economic damages),have driven many physicians out of that

    state. Myself being one.I personally have

    never ever been sued in 17years of medical practice,but found that my monthlycost of medical malprac-tice had gone up to $3000per month — while reim-bursements have remainedflat. Something has to bedone to address the law-suit issues, like the Fed-eral Tort Claims Act

    covering physicians working within theVA system or in the Public Health Sys-tem. Likewise, we need to resolve

    whether illegal aliens areentitled to taxpayer-sup-ported free healthcare,under the mantra of Uni-versal Healthcare.Robert Greenhalgh, MD

    Sparks, Nevada

    CORRECTION:The sidebar accompany-ing the proton therapy

    report, “Proton Beam Therapy: AnAccelerating Market” (Feb 2008)incorrectly listed the sites underconstruction. The Central DuPageHospital and Northern Illinois sitesare under consideration, but havenot yet broken ground. The Okla-homa site is called the OklahomaProCure Treatment Center, not IN-TEGRIS Health. (INTEGRIS willprovide patient care at the center.)

    Also: Still River Systems’ protontherapy system has a capacity 350plus patients a year, not 250 as re-ported. Says Still Rivers’ LionelBouchet, “Our customers are ex-pecting 350+ patients per year in asingle shift, more, if running in adouble shift.”

    Ph: 613-726-7811 • Fax: 613-828-1097www.andamedical.com • email: [email protected]

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  • DOTmedbusiness news I MARCH 2008 5

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  • DOTmedbusiness news I MARCH 2008 www.dotmed.com

    AHA On Bush BudgetThe federal budget blueprint would have adisastrous impact on the healthcare thatmillions of patients and families de-pend on. Plain and simple: thisplan slashes vital health programsfor the elderly and children andmust be rejected.

    That’s the AHA’s view of the pro-posed Bush budget as disseminated bythe organization’s president and ceo, RichUmbdenstock.

    “America’s hospitals strongly opposethis budget’s outrageous cuts to Medicare andMedicaid. In the real world, these enormous budgetnumbers come with enormous consequences, makinghospitals’ job of caring for patients even more difficult,”Umbdenstock said.

    His statement reminded that at a time when physicians are

    in short supply, the budget calls for cutsto teaching hospitals that prepare tomor-row’s physicians. “At a time when oureconomy is faltering, this budget cutshospitals serving some of America’s

    poorest patients. At a timewhen an aging America

    depends

    on modernhospital care, this

    budget drastically reducesfunds that help hospitals keep cutting-edge

    technology available for communities. This budget cutsprograms that help rural communities keep their health-care, train the nurses and caregivers of tomorrow and assist chil-dren’s hospitals in training pediatricians and other specialists.”● [DM 5429]

    Medtronics Wins Supreme Court Ruling onFederally Approved Medical DevicesIn a case with enormous consequences to medical devices andequipment, the Supreme Court, by an 8 to 1 vote, has ruled thatMedtronics cannot be sued under state law as a manufacturer ofa federally approved medical device.

    The Court affirmed that Medtronics and other manufac-turers are protected under the Medical DeviceAmendments of1976, which, among other things, bars states from imposing onmedical devices any requirement which is different from what'salready won FDA approval.

    6

    You’ll see an ID code such as [DM 1234] at the end of everystory. If you enter that ID code – be sure to enter the “DM” – inany search box on www.dotmed.com, you’ll see the originalstory as it ran in our online News. You’ll find convenient anduseful links in many of those onlinestories. Try it!

    � [DM 1234] What does this ID code mean?

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    Medtronics lawyer and former USSolicitor General Theodore Olson suc-cessfully argued that the FDA and notthe courts was the right forum for impos-ing requirements on cutting-edge med-ical devices.● [DM 5524]

    Medical Devices NeedRigorous Reviews,Researchers SayThe approval process for medical de-vices does not involve the same rigor-ous review used for pharmaceuticals,and this needs to change in order to im-prove health outcomes, say researchersfrom the University of California, SanFrancisco.

    The UCSF team analyzes the prob-lem and proposes steps toward a solutionin a “Perspectives” article in the January2008 issue of the “Journal of General In-ternal Medicine” devoted entirely tomedical devices.

    The research team concluded thatafter a device achieves Food and DrugAdministration (FDA) approval, a tech-nology assessment by an independentorganization can help identify medicaldevices that are truly beneficial and safe.The researchers also suggest that this as-sessment follow an “evidence-based”approach to information-gathering thatincludes data on the device’s success inclinical application.

    “These days, patients are askingtheir doctors for the newest technologiesfrom genetic tests to specific radiationtreatments, and many physicians don’tknow where to turn for the latest evi-dence-based information,” the study said● [DM5437]

    PET Outperforms CT inCharacterization of Benign/Malignant Lung NodulesResearchers involved in a large, multi-in-stitutional study comparing the accuracyof positron emission tomography (PET)and computed tomography (CT) in thecharacterization of lung nodules found thatPET was far more reliable in detectingwhether or not a nodule was malignant.

    “CT and PET have been widely usedto characterize solitary pulmonary nod-ules (SPNs) as benign or malignant,” saidJamesW. Fletcher, professor of radiologyat Indiana University School ofMedicinein Indianapolis, IN. “Almost all previousstudies examining the accuracy of CT forcharacterizing lung nodules, however,were performed more than 15 years agowith outdated technology and methods,and previous PET studies were limited bysmall sample sizes.”

    In a head-to-head study addressingthe limitations of previous studies, PETand CT images on 344 patients were in-dependently interpreted by a panel of ex-perts in each imaging modality.

    The researchers found that whenPET and CT results were interpreted asprobably or definitely benign, the resultswere strongly associated with a benignfinal diagnosis—in other words, themodalities were equally good at makingthis determination. PET’s superior speci-ficity (accuracy in characterizing a nod-

    ule as benign or malignant), however, re-sulted in correctly classifying 58 percentof the benign nodules that had been in-correctly classified as malignant on CT.Furthermore, when PET interpretedSPNs as definitely malignant, a malig-nant final diagnosis was 10 times morelikely than a benign.● [DM 5451]

    Ambassador Medical EarnsISO CertificationAmbassador Medical has received ISO13485:2003 certification as a refurbisherof ultrasound equipment by BSI Man-agement Systems. This certificationserves as recognition of Ambassador’sQuality System in meeting the require-ments of the International Quality Stan-dard for Medical Devices.

    “This was an immense effort by theentire team,” said Patricia Seguim-Arnold, Site Quality Leader for Ambas-

    7

    continued on page 37

  • DOTmedbusiness news I MARCH 2008 www.dotmed.com

    Genetic Research:Key to Understand-ing ProstateCancerDr. William J. Catalona,first to develop prostate spe-cific antigen blood tests(PSA), is now focusing ongenetic research to betterunderstand what causesprostate cancer, as well asguide the way to effectiveand preventative treatmentsand cures.

    Under the umbrella ofthe Urological ResearchFoundation (URF), severalnew genetic regions statisti-

    cally associated with prostate cancer have been discovered,suggesting doctors may be able to determine which men carrya mutated gene that predisposes them to the disease. In thatvein, Dr. Catalona’s newly formed Familial Prostate CancerCenter is also examining the connection between prostate andbreast cancer and whether mutated genes in the two sexes causethe respective cancers. Moreover, Catalona is studying such in-triguing questions as whether a mother can pass prostate can-cer to her son while a father passes breast cancer to a daughter.

    Other URF initiatives include: recording family historiesof men with and without the cancer, supporting a biorepositoryto retain tumor tissues and blood samples and encouraging col-laborative research with other leading scientists. Catalona is aprofessor at Northwestern Feinberg School of Medicine andDirector of Northwestern’s Robert H. Lurie ComprehensiveCancer Center. For more information: www.drcatalona.com.● [DM 5475]

    New Device Vacuums Out Brains’ ArteriesCalifornia based Penumbra Inc. has won a surprisingly speedyapproval from the Food and DrugAdministration for a tiny vac-uum cleaner for the brain.

    The device, which will be formally presented at theupcoming meeting of the American Stroke Association, suc-tions out clogged arteries in the brain in an effort to preventstrokes.

    One perplexing question, however, deciding which pa-tients are the right candidates for the procedure. Oddly enough,for some unclogging arteries isn’t always the best option.

    “Is the patient at a stage of stroke where you’re going tohurt them by pulling a clot out, or show benefit?” asks Dr.Wal-ter Koroshetz of the National Institutes of Health. “It’s goodwe have devices. Now we have to learn how to use them.”● [DM 5476]

    Never Say NeverIn a first known to medical science, anAustralian girl has spon-taneously switched blood types to that of her liver donor. Facedwith imminent liver failure, the nine year old received a trans-plant. Nine months later it was discovered that not only had herblood type changed but that her immune system had switchedto that of her donor after stem cells from the new liver migratedto her bone marrow.

    What doctors obviously want to know now is whether thesame kind of transformation can be replicated in other trans-plant patients.● [DM 5477]

    what’s new

    8

    Dr. WilliamJ. Catalona

  • DOTmedbusiness news I MARCH 2008

    RSNA’s ’07 Attendance Up Again, Interna-tional Visitors Big PlusThough veteran observers thought attendance was a bit offfrom previous years, The Radiological Society of NorthAmer-ica’s (RSNA) 93rdAnnual Meeting, last November in Chicago,attracted a record 62,501 total attendees.

    The meeting posted all-time highs in several categories in-cluding professional and international registration. Fueled bythe meeting’s enhanced educational offerings along with a fa-vorable exchange rate on the dollar, international attendancewas up 7 percent in 2007, totaling 8,792.

    “The increase in professional registrants was primarilyfrom outside North America. The currency exchange rate anda modest increase of available hotel rooms are plausible rea-sons for the favorable increment,” said Steve Drew, RSNAAs-sistant Executive Director for Scientific Assembly andInformatics.● [DM 5378]

    CMS Proposes Payment Plan to Long TermCare HospitalsThe Centers for Medicare & Medicaid Services (CMS) haveissued a proposed payment rule designed to assure that long-term care hospitals (LTCHs) continue to receive appropriatepayment for services provided, at the same time creating in-centives to provide more efficient care to Medicare beneficiar-ies. LTCHs are a type of acute care hospital that treats some ofMedicare’s most severely ill or medically complex patients.The new policies and payment rates would apply to servicesprovided to individuals who are discharged from these hospi-tals on or after July 1, 2008.● [DM 5386]

    Tesla’s Fictional LifeAs Strange as theReal OneIt’s probably not a summer beachread but Eryn Loeb’s The Inventionof Everything Else (HoughtonMif-flin), a fictionalized account of vi-sionary inventor Nikola Tesla’s lastweek on earth, would figure to havestrong appeal to DMBN readers.

    Tesla was a Serbian inventor,physicist, mechanical and electri-cal engineer celebrated for hisrevolutionary contributions to har-

    nessing electricity and magnetism. His patents are the basis foralternating current (AC) systems and the SI unit measuringmagnetic flux density, widely known as the manetic field. Thetesla was named in his honor in 1960 at the ConférenceGénérale des Poids et Mesures in Paris. He’s been labeled “theman who invented the twentieth centurty “ and “the patron saintof modern electricity.”

    As the novel reveals, much of Tesla’s research borderedon pseudosciences and paid homage to UFOs and new age oc-cultism. Tesla was also said to have invented a “death ray” andhad a love affair with a pigeon. That said, the novel has gar-nered rave reviews and seems particularly relavent to theDMBN crowd.● [DM 5479]

    Chronic Pain Bad for the BrainBrain scans of people in chronic pain reveal constant activity inareas that should normally be at rest. Researchers at North-western University suggest such results from a new study couldexplain why pain patients have higher rates of depression, anx-iety and other disorders.

    Chronic pain seems to alter the way people process infor-mation that is unrelated to pain since enduring it for long peri-ods of time affects brain function in response to even minimallydemanding tasks, it was reported in the Journal of Neuroscience.

    In healthy people, certain regions of the brain take overduring a resting state, something known as a default mode net-work. When a person performs a task, this network quietsdown. That’s not apparently the case for people with chronicpain. Findings suggest a chronic pain patient’s brain is alteredby the persistent pain in a manner reminiscent of other neuro-logical conditions associated with cognitive impairments.● [DM 5478]

    9

    The Invention ofEverything Else(Houghton Mifflin)

  • DOTmedbusiness news I MARCH 2008 www.dotmed.com10

    Probably not yet, though datafrom the system’s economicmonitors is open to widelyvarying interpretation, muchof it ugly.But whatever a hospitals’ woes—

    and there are plenty—it doesn’t rival theupheaval, thanks in large part to DRAre-imbursement cuts, felt by independentimaging and allied healthcare centers.

    In fact, many larger hospitals have

    enjoyed a building boom in recent years,much of it to house new imaging equip-ment that then figures prominently inwell-funded and extremely competitivemarketing campaigns to aquire evenmore imaging business.

    However, for every hospital transi-tioning from big to bigger, there’s an-other closing its doors, usually at a rateof about once every ten days or so.

    With a classic “only the strong sur-

    vive” mentality, many hospitals are con-tributing to the financial problems beset-ting independent centers. Hospitals underpressure to gain revenue are using theirmuscle to compete for business that oth-erwise keeps alternative centers afloat.

    Meanwhile, smaller, communitybased hospitals are either shutting downor being absorbed by regional and na-tional powerhouses.

    As for DRA cuts, some would sayit’s been a nightmare.

    “Hospitals are regulated and gettheir rate but imaging centers don’t,”

    Hospitals, IndependentHealthcare Centers

    Feel the PainBy Colby Coates

    Is it Code Blue for America’s hospitals?

  • DOTmedbusiness news I MARCH 2008

    says Rob Manetta, vp, operations, Nationwide Imaging Serv-ices, Inc. Over the next six to eight months, Manetta believes,change will continue apace in the independent imaging space.It will be a period marked by mergers, acquisitions, consolida-tions and the posting of “closed forever” signs to independentcenters’ doorways.

    In fact, there’s quite a debate about what, if anything, canbe done to stem the high failure rate of these facilities, as evi-denced by emails that have been circulating among the pre-owned sales and service set.

    The campaign, such as it is, urges all interested parties topetition the House and the Senate to repeal DRA cuts for atwo-year period, allowing further analysis of the cuts’ eco-nomic impact.

    “Ask that they (Congress) vote on these bills as soon aspossible before there is no early diagnostic testing availableoutside a hospital setting,” urges one email.

    “We need to be proactive,” says Pamela King, JP Interna-tional. “Is there a surplus of centers? Probably, but the wholematter is not as simple as it looks.”

    King’s seen proof of that from emails from fellow med-ical equipment executives, some of whom eschew this grass-roots effort to overturn or modify the cuts. Instead, someexecutives argue that market forces will determine who sur-vives and that a shakeout of weaker players is positive, makingfor healthier business climate for those left standing.

    Boom and Bust CycleStill, riding out boom and bust cycles is no small accomplish-ment. It’s a concern for any company in the healthcare indus-try, no matter its size or financial resources.

    Hospitals and imaging centers aren’t the only sector that’sfeeling the squeeze. Estimates vary, of course, but the OEMs’sales were said to be off anywhere from 20-35 percent in 2007.

    “It’s industry wide,” says John Desch, appointed to anewly created executive sales solutions post at Philips. “Somethings are out of our control but we’re addressing it and we’rechanging how we go to market.”

    One bugaboo dealer/brokers are facing: plenty of nearnew equipment from failed centers is becoming available tothem but, at the same time, there’s a diminishing number ofbuyers ready to trade up or replace aging product. Says Na-tionwide’s Manetta, “with the number of independent centersshrinking, sales of new equipment is down.” In theory, how-ever, that should be somewhat positive for those selling usedproduct, often at one-third to more than one-half the cost ofnew equipment.

    While hospitals have fared better than independent centersunder DRA, what looms for many is far from comforting. Overa year ago independent researchers released a report detailingominous trends that still prevail.

    For example, experts predict a shortage of 150,000-200,000beds nationwide by 2012 because of profitability issues.(Source: J.D. Powers, JHACO, Hospital & Health Networks.

    Among the report’s other conclusions:1) Bottom line performance is not improving, as cost cutting

    policies are not working. While hospitals have been going outof business at a rate of one hospital every 8 days for the last 30years, a bankruptcy trend has been accelerating since 2005.

    2) Cutthroat competition has become a way of life.

    3) The public is losing confidence in hospitals. Approximately35 percent of patients indicate they would not return to the samehospital, with 41 percent unable to recommend a hospital totheir family.

    4) Staff satisfaction is low. Nursing shortages could run tonearly 1 million nationwide in less than five years. There arealso looming shortages of pharmacists, lab technicians, andother technical employees.

    5) Medical malpractice has grown at an annual rate that’s 30percent faster than for all other U.S. tort cases. The averagemalpractice settlement has more than quadrupled over the pastcouple of decades.

    All in all, not an especially pretty sight, and one whose inten-sity varies depending on a hospital’s location and existinglegislation.

    11

    continued on page 40

  • The International Association ofMedical Equipment Remar-keters & Servicers (IAMERS) isputting a labeling system inplace for used medical equip-

    ment in the U.S.The voluntary program will issue

    identifying labels for equipment accord-ing to established categories. Companiesselling the equipment will be required tosign documentation verifying the condi-tion of each piece of equipment accord-ing to these categories:• As Is, Where Is• Refurbished• Cosmetically Enhanced, or• Remanufactured

    The impetus for the IAMERS equip-ment labeling initiative is to promotequality and standards through industry

    controls as opposed to government regu-lation. IAMERS is being proactive tomanage the process, according to DianaUpton, the organization’s president.

    “The FDAhas been suggesting for along time that we do something likethis,” she said. “My belief is that, in theabsence of us doing it, they’d eventuallybe telling us how to do it.”

    The industry initiative is satisfactoryto the agency, which is charged with en-suring quality despite limited resources.“They have already been briefed andthey are very happy with what we’vedone,” Upton said of the FDA response.“It is a totally unregulated situation and Ibelieve the goal of the FDA is to get thepre-owned sector to have the same kind— or close to the same kind — of con-straints that OEMs do.”

    IAMERS is striving to make the

    program as uncomplicated as possible.The group is ironing out the legal lan-guage on forms that members will be re-quired to sign before getting theirequipment labels. The organization willkeep a database of all equipment so la-beled. The topic will be discussed fur-ther, and the FDA will attend, theIAMERS annual meeting May 2-3, 2008in Charleston, SC.

    IAMERS Equipment Label-ing Initiative Categories•As Is, Where Is. “As is,where is” systemsare unchanged.These systems are typicallydeinstalled from the hospital/clinic and arethen crated and shipped to the buyer. Noth-ing else is done to the system.

    •Refurbished. Refurbished systems re-tain their original identity and are essen-tially repaired and/or upgraded in amanner which could be achieved byfield service personnel or in a facility ca-pable of such repairs or upgrades. Refur-bished systems include those systemswhich have received software upgradesor basic improvements consistent withthe life cycle of the product. The systemcomplies with the original level of func-tion and at least meets the original OEMdefined specifications or the OEM spec-ified path for upgrades. This is consis-tent with the extended life cycle asproposed by the OEM.

    • Cosmetically Enhanced. The systemis basically as is, where is; but has beenpainted and/or cosmetically improved.However, no repairs or upgrades havebeen done.

    • Remanufactured. Remanufacturedsystems would be newly built systemsusing rebuilt, repaired or new parts whichallow the system to perform substantiallydifferent than the original system. Thiscategory, however, will rarely apply toIAMERS members and their equipment.

    For further information: visitwww.iamers.org● [DM 5526]

    DOTmedbusiness news I MARCH 2008 www.dotmed.com12

    IAMERS Takes Leadership Role to LabelUsedMedical Equipment By Barbara Kram

  • DOTmedbusiness news I MARCH 2008 13

    Most hospitals rely on vendorsor in-house staff to providetraining for new software sys-tems.

    But there is another way.CCT Solutions, Ltd. has a different

    approach to training hospital staff to useclinical software.

    The company, founded in 2005 andbased in New York, trains thousands ofclinicians on physician order entry pack-ages, nursing documentation, and otherapplications.

    “We are just training and educationfocused and not responsible for the soft-ware that the hospitals have already pur-chased or the support of the system orthe configuration,” explains Mike Mc-Calman, CCT Program Manager. “Wefeel the price that we can offer hospitalsthat may not have their own internal ed-ucation entities is much less than a hos-pital might pay a vendor to come onboard and train hospital staff affected bythat new software deployment.”

    Some of the HIT software that CCTspecializes in includes Cerner and IDXphysician order entry and RN documen-

    tation; Siemens medication administra-tion checker; Meditech bar code scan-ning and bedside verification software;SoftMed electronic signature authenti-cation; Eagle and ADT admissions, dis-charge, and transfer applications; andGroupWise email.

    Usually, the company trains a coregroup of instructors and gets training in-formation from the vendor and informa-tion systems community. Instructorsinclude some lay people along with cli-nicians such as doctors in residence withgaps in their schedules, researchers orthose who want to keep up with automa-tion trends. CCT keeps costs down byrecruiting local clinicians and instructorsnear clients’ facilities and shaving oper-ating costs.

    “We save every penny possible be-cause we’re a small company and a newcompany,” McCalman says. “It’s allabout finding the right people. Once wededicate a team, whether it’s formerclassroom instructors or unit support,our job gets a lot easier.”

    The company’s client list includeshospitals and big health groups such as

    Continuum Health Partners, an umbrellafor several New York hospitals; Green-wich Hospital in Connecticut, AlbertEinstein Medical Center in Philadelphia;Valley Health System in New Jersey,Tampa General Hospital, and SetonMedical Center, Austin, TX.

    “Outsourced education, to folkswho may not be expert on the product,is a fairly new model for a lot of hospi-tals. But they’re willing to take thegamble because of the financial pres-sures that most institutions have beenfeeling for the last five to ten years,”McCalman says.

    The company is capable of provid-ing training on a roll-out or facility-widebasis as needed. Ongoing unit support isalso provided.

    The decision to use CCT’s servicesis made early on in the contractualprocess when choosing the software.And the company’s track record speaksfor itself. “We have never been turnedaway. All the clients have asked usback,” McCalman says.● [DM 5527]

    Hospitals SeekNew Approachto Training

    By Barbara Kram

  • DOTmedbusiness news I MARCH 2008 www.dotmed.com14

    Butthe trifecta of OEMs, refur-bishers and broker/dealers isthe engine that’s driving themedical trailer business.Among the fundamental economic

    conditions which the three have to copewith: increasingly stringent installationand service demands by the OEMs man-ufacturing the imaging devices; the pres-sure of DRAcuts on independent imagingcenters; evolving imaging technology re-quiring highly specialized mobile trans-portation; the hospital communities’needto provide sophisticated and expensivetechnology in a cost effective manner,which often means sharing equipmentwith neighboring facilities on a rotatingbasis and export considerations.

    Trailers range in size from 53 feet,suite sized ones with slide outs and insome cases even hot labs and ready toreceive a machine to those no biggerthan a small camper. Fully equipped,brand new trailers set to house certifiedOEM MRIs or CTs can sell for as muchas $450,000; smaller rv types for mam-mography and ultrasound, for example,are in the $100,000 plus category, withclient specifications determining thefinal tab.

    Such lofty prices have generated agrowing specialty field of medical trailerrefurbishing, creating a subset of com-panies, large and small, dedicated to re-building entire trailers or providing spotservice, maintenance and repairing of in-

    dividual components. Medical trailer re-furbishers often rebuild trailers to houseMRI, CT or mammography equipment,usually at one-third the cost of a brandnew piece.

    The new and refurbished mobilemedical business is a bright growth areain an industry that’s seen the equipmentmanufacturers sales slump over the pastcouple of years.

    And despite economic pressureswhich force thousands of manufacturingjobs overseas, producing and refurbish-ing medical trailers is still mostly anAmerican industry. The top four medicalmanufacturers, along with the fully-cer-tified trailer refurbishing companies, areUS based, all in sprawling facilities

    Medical Trailers:Normally, three’s a crowd...

  • DOTmedbusiness news I MARCH 2008

    housing their own welding, painting and air conditioning bays.Oshkosh Specialty Vehicles, based in Harvey, IL, is ac-

    knowledged as the market share leader among manufacturers,with Medical Coaches, Inc., Oneonta, NY (the first and oldest),Ellis & Watts International, Batavia, OH and Calutech Med-ical Solutions, Hammond, IN the other major players. `

    Medical trailers aren’t simply four-walled trucks withequipment inside. Technology’s cutting-edge demands requireinteriors able to include onboard generators, water cooling andair conditioning systems, fully contained lighting heating, com-puter workstations and storage. Because these mobile units,once parked, have to serve as stand-alone medical operations,steel and aluminum chassis must be first rate. Specializedshielding requirements based on the modality is another hugeconsideration, as is ensuring an area both visually attractiveand medically efficient.

    In addition, mobile trailer manufacturers must then passmuster with the top equipment OEMs who then certify, or not,

    the manufacturers ability to install MRI, PET/CT, mammogra-phy or other sensitive systems.

    While several metrics exist for measuring medical trailermanufacturers such as volume of trailers made, plant size, num-bers of employees, the key marker is OEM certification by GE,Philips, Siemens, Toshiba among others.

    Getting certified is costly and demanding and means notonly meeting all OEM requirements, but getting the OEM toagree that your facility is capable of doing the job. Each OEMhas separate divisions that select which companies they want tohandle installation and refurbishing.

    Profiling the Trailer OEMsOshkosh Specialty Vehicles, a $140 million operation, wasestablished in 1991 as AK Associates before merging withCalumet and Oshkosh. It is, the company says, the onlytrailer manufacturer certified to install GE, Siemens andPhilips MRI, CT, and PET/CT medical equipment in allmodalities. Over the years the company has developed an in-novative water chiller/air conditioning system, was the firstto mobilize digital mammography vehicles, and is often thefirst manufacturer selected to install a new equipment froma brace of the OEMs.

    15

    By Jean Grillo

    Philips Achieva 3.0T X-Series Mobile MRI

  • DOTmedbusiness news I MARCH 2008 www.dotmed.com

    GE, in particular, has signaled that Oshkosh is their pre-ferred installer for all of its mobile scanning equipment.Accord-ing to Mike Bamrick, national sales manager, Oshkosh’scertification track record causes some to believe GE only allowsOshkosh to install its equipment in trailers, even though that’snot true. “However, because we are the only ones certified forevery system, most people prefer us when having GE equipmentinstalled.” And he said, “We stand behind our product with thelargest customer service and support team in the industry.”

    Oshkosh turns out 125 new coaches a year, 90 percent oftravel to hospitals and medical centers in the U.S. Within its110,000 square foot plant, 20 to 25 medical trailers are assem-bled at one time from the wheels up in about two months time,though special situations can also mean as quickly as twoweeks. Oshkosh has its own welding team, electrical team,flooring experts, chassis and super-structure experts, paintingbay and signage team.

    Medical Coaches, which opened its doors in 1949, wasbuilt on the back of a large order to the Cuban government.

    “My grandfather was a minister who helped people securemedical treatment,” Geoffrey Smith, president, explains. “Andmy dad, Ian Smith, always wondered why someone didn’t justput their medical offices on wheels. Medical Coaches, which hecreated, fulfilled this life-long dream.”

    Medical Coaches has 200,000 square feet of manufacturingspace at two facilities, 100,000 at its Oneonta, NY site, another100,000 in Albany, OR. It is certified for Siemens MRI,

    PET/CT and CT, on GE’s PET/CT (although not GE MRIs). Itis capable of working on 10MRI or PET/CT installations at anyone time, according to Smith, who adds, “We also build a vari-ety of other special purpose vehicles that are in production.”Medical Coaches says it can turn-around a trailer in 30 days.

    While Oshkosh is justifiably proud of its close ties withGE, Medical Coaches touts its history and custom design.

    “What makes us different is our attitude toward our

    16

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    product,” Smith says. “We began as a company that built itsmobile trailers as medical trailers from the start. We don’t (re-work) over-the-road trailers.”

    Medical Coaches works closely with Siemens, GE andPhilips. Smith says, “all mobile vendors must have certificationto build specific products to receive support from the OEMs,”since, “they’ve decided their equipment can only operate in aproperly designed and tested mobile environment that is undertheir control.”

    Like other manufacturers, Medical Coaches does the entireinstallation of all OEM equipment, involving placing the modal-ity unit in the trailer, bolting it down, running the cable required,and making the electrical connections. The individual OEM doesthe final calibration, turning on the equipment, calibrating and ad-justing so it works properly.

    The company is rightly proud, Smith says, that it was the firsttrailer OEM to be certified through Lloyd’s Register Quality As-surance. Its resultant ISO 9001 certification, he says, is an inter-nationally-recognized standard “that levels the playing field forsmaller companies like ours to deal with the industry giants of theworld.” In that vein, Medical Coaches, which does not rent orlease its trailers, has scored sales in 110 countries.

    Ellis & Watts Mobile Medical, located in Batavia, Ohio, in-stalls MRI, CT, PET/CT, and mammography systems into trail-ers. E&W also builds and sells trailers for disaster recoveryservices, military and other equipment applications. In its 180,000square feet of manufacturing space, E&W also builds waterchillers for use with medical equipment. In an eight-week period,E&W can build four trailers that carry some certification for se-lected modalities from the OEMs.

    “We work with leasing companies, particularly those of themedical equipment manufacturers, to provide our customers withattractive acquisition solutions,” says E&W’s Bob Freudenberger.The company specializes in custom add-ons, including sinks, firesuppression systems, additional storage cabinets, different doorconfigurations, and so on. E&W says its trailers set themselvesapart from the competition as a result of attention to better envi-ronmental control.

    17

  • DOTmedbusiness news I MARCH 2008 www.dotmed.com

    Other E&W features: sliding doorsthat allow more interior space in the op-erator’s room, lower compartment doorsthat last longer due to one-piece alu-minum construction and durability be-cause it uses more fasteners inconstruction. “When refurbishing E&Wproducts, we also provide manuals, dia-grams, and use genuine replacementparts,” Freudenberger says.

    While only about 10 percent ofE&W trailers make it oversees, it’s quitea different picture at Calutech Solutions,the newest of the mobile trailer manu-facturers, which opened its doors in2001 in Hammond, IN. More than halfthe company’s sales are overseas.

    “In 2005, we sold one mammogra-phy trailer to Saudi Arabia,” says salesmanager Michael Hardesty. “Since then,we’ve sold a CT to Russia and the UAEand have about 15 other leads overseas.”

    In fact, Hardesty’s just back fromDubai, where Calutech delivered amammography trailer at theArab HealthShow, attended by 50,000 visitors.

    Calutech can handle nine trailers inproduction at any one time, with fivemore in the wings outside its 47,000square foot facility. While Hardesty saysthe trailer company is number three inunits shipped, “We are number one inmammography trailer sales.” Calutech iscertified to install some Siemens,Philips and Hologic equipment but isstill working to attain certification in cer-tain GE systems. “The key issue for allmedical trailer manufacturers,” Hardestysays, “is that the OEMs certify your in-stallation.”

    DRA’s Impact AffectsOEMs, RefurbishersAll four trailer manufacturers note someimpact from the Deficit Reduction Actof 2005, which took effect January 1,2007. It mandates reductions inMedicare reimbursement for imaging atfree-standing facilities and doctors of-fices, aiding the refurbishing end of thebusiness by stimulating demand from

    hospitals absorbing patients who onceturned to independent facilities.

    Many agree huge savings can beachieved by buying a refurbished trail-ers. But, Hardesty cautions, “if you are alarge image scanning company, youprobably would not want a fleet of usedequipment because the downtime for re-pairs is greater.”

    However, as Medical Coach’sSmith notes, “Good deals and goodequipment are a profitable match thatfunnel funds to a seller for new upgradesand can offer high tech diagnostics forunder-served areas of the country.” Onthe other hand, Smith says, “Bad dealsand bad equipment are a disaster be-cause uncontrolled and uncertified refur-bishers are rarely qualified to performextensive refurbs.”

    Which is why, he says, “The indus-try has to have some form of self-regula-tion, so the top vendors are all certifiedby the top brand OEMs.”

    18

    continued on page 35

  • DOTmedbusiness news I MARCH 2008 19

    Inhospitals, clinics, imaging and other independent healthcenters, doctor’s and dentist’s offices, university, bigpharma and other research facilities and yes, even medicaltesting labs.And it’s been that way forever.The industry has a long history.Witness, for example, how

    many times bubbling beakers and vials in alchemy labs figurein the paintings of the Grand Masters. From the Renaissanceto the 21st Century, the lab has evolved from a place wheremagic was once chased to a place that’s the backbone of sci-ence and state-of-the-art medical treatment and diagnosis.

    However, while every lab has different roles, goals and awildly varying assortment of equipment to achieve its assignedtasks, what they collectively contribute is a bit of modernmagic. The JCAHO reports that almost 80 percent of the infor-mation used for medical decision-making is made based on lab-oratory findings. That’s impressive, not to mention a defining

    statement about lab equipment’s crucial role in medicine.Technological advances in the industry, meanwhile, have

    created a range of new or modified products, mostly ensuringa robust marketplace for new and refurbished equipment.Nonetheless, there are times when equipment sales can still beaffected by the economy’s overall health.

    Lab equipment includes professional and scientific instru-ments for measuring, testing, analyzing and controlling alongwith sensors and accessories, optical instruments (microscopes)and lenses, medical, surgical and dental equipment, furniture,the list is endless.As befitting such panoply of product, the en-vironment for servicing and selling new and refurbished labo-ratory equipment is competitive and always evolving

    Since the importance of lab equipment is only slightly lessthan that of the staff that uses it, replacing or servicing a lab’scontents affects many areas of an organization including fi-nance, workflow, staffing and patient care.

    Lab equipment. It’s everywhere. By Joan Trombetti

    From ALCHEMYto State of the ART

    Treatment and Diagnosis,

    LABS RULE Through the Ages

  • DOTmedbusiness news I MARCH 2008 www.dotmed.com

    Who are the IndustryDrivers in the LaboratoryEquipment Business?In the laboratory, there are layers uponlayers of clinical procedures and teststhat must be performed using a myriadof machines from autoclaves to x-rayfluorescence analyzers. There are indus-try drivers who take the front seat in pro-viding the best new and refurbishedlaboratory equipment from the leadingmanufacturers. Along with selling labo-ratory equipment, many also handle re-pairs, routine maintenance, calibrationand certification on all types of instru-ments and equipment.

    For example, Block Scientific, Inc.,Nutley, NJ carries many categories ofnew and refurbished equipment includ-ing blood gas, electrolyte, chemistry, im-munology, hematology, coagulation,microbiology, urinalysis and more. PeterWill, General Manager, says Block of-fers clinical diagnostic equipment for alllaboratory divisions and supports thisequipment with reagents, spare parts andconsumables.

    In assessing the state of the lab busi-

    ness, Will suggeststhat in the interestsof efficiency andproductivity, buyingand selling labequipment onlinewill only continue togain in popularity.“Many labs are turn-ing to the Internetfor support, andBlock Scientific willsoon have the abilityto streamline onlinepurchases,” he says.

    Proper service of labora-tory equipment is crucialAs with most sophisticated and delicatepieces of medical equipment, much ofwhat’s found in the lab demands proac-tive maintenance.

    Certified Biomedical Consultants,Inc. (CBC), Pompano Beach, FL, serv-ices and sells refurbished laboratoryequipment for commercial labs, clinicsand hospitals that use SYSMEX products– hematology and coagulation analyzers.

    Company president John Necaisesays all lab equipment eventually wearsout, but routine upkeep is essential to in-creasing uptime and MTBF (mean timebetween failures). Necaise says suchmaintenance is key to maintaining labequipment in a satisfactory operatingcondition and to detect and correct incip-ient failures either before they occur orbefore they develop into major defects.“CBC inspects, replaces, cleans, cali-brates to the manufacturer’s specifica-tion and lubricates all equipment,” says

    20

    A Medeq rebuilt door for lab equipment.

  • DOTmedbusiness news I MARCH 2008

    Necaise. “We also include performance assurance and safetytesting.” As for what requires the most service, Necaise be-lieves that hematology equipment is more maintenance inten-sive than coagulation.

    Billy W. Dean, VP, Sales and Marketing at Medequip En-gineering Service, Inc., Central Point, OR, agrees with Necaiseabout the importance of regular maintenance for lab equipment.

    “Routine maintenance always affects the MTBF ratio ofany equipment,” Dean says, reminding that as technology be-comes more sophisticated, both user and preventive mainte-nance becomes more and more critical.

    “High tech equipment usually does not wear out. Instead it’sovertaken and becomes obsolete. Lower technology equipmentdoes wear out, but it usually has a much longer life expectancythan the high tech equipment,” Dean says. Pointing to a new orrefurbished steam sterilizer as an example, the Medquip execsuggested that, “Depending on usage and proper maintenance, asteam sterilizer should have an expected life of at least 20 years.The control technology of the sterilizer may be obsolete in tenyears, but the unit will still bea functional sterilizer for yearsafter that.”

    At R-V Industries, HoneyBrook, PA, where the com-pany produces Beta Star steril-izers, manufactures ASMEcode vessels and celebratesthat it’s one of a select few inthe Commonwealth to be rec-ognizedwith OSHA’s SHARPsafety certification, the empha-sis is on testing, the environ-ment and helping customers tolower operating costs.

    Marketing manager Robert Hamm says the company’stesting facilities are unique in that it uses a water reclamationsystem, The EnviroVac. “Facility water consumption is a majorfactor when choosing an autoclave,” says Hamm. He feels thatroutine maintenance programs are designed around a calendaryear and take into account lubricating, cleaning and rebuildingor replacing worn out parts.

    Building an entire laboratoryOne way to stock a lab is according to need, piece-by-piece,purchase-by-purchase.

    But Med/Tech, Cambridge, MAoften builds labs—analyt-ical, clinical, and environmental or research—from the groundup, relying mainly on refurbished product.

    “Aclient locates a suitable site and informs us as towhat theywant to do testing wise and we do an analysis,” says companypresident Elaine Henkin. “The site is customized in everythingfrom the placement of benches and workstations to recommend-ing what type of equipment should go in the lab and where itshould go,”All of the equipment thatMed/Tech sells is refurbishedtomeet or exceedmanufacturers specifications, unless specificallyrequested, “as is.” MedTech, like many suppliers, offers a one-

    year Preventative Maintenance contract.Although Henkin admits DRA has affected the lab equip-

    ment business, she remains optimistic about future growth.“There seems to be a turnaround recently, perhaps moreoptimism.”

    TheMed/Tech chief also reminds that matching equipmentto the individual lab’s demands is a straightforward way to con-trol costs. For example, the analyzers that save the most moneyare appropriate to the particular tests each lab performs and, ofcourse, the volume. Henkin also says to always factor in thecost of reagents into each lab’s budget.

    For Maureen Muscato, a broker for Mayflower EquipmentCompany, Carver, MA, more than 75 percent of her business isin lab equipment.

    “I buy all types of laboratory equipment from all types offacilities,” she says. Mayflower buys chemistry, hematology,histology and analytical equipment. Although Muscato saysthat she does not set up labs, she provides equipment to spe-cialty dealers. In her experience, the most popular laboratory

    equipment seems to be chem-istry analyzers and hematologyanalyzers. Muscato feels Hi-tachi equipment is most in de-mand, retaining strong resalevalue as well.

    “Although the marketchanges day to day in every-thing from lab equipment to sur-gical equipment, for example, ithas been my experience thatlaboratory equipment does holdits value,” she concludes.

    That’s particularly true ofrefurbished product says Richard Szkocny, Eastern Europeanmanager, Sysmed Lab, Inc., a Chicago based refurbisher andbroker. And Szkocny knows whereof he speaks: Sysmed’s re-furbished sales out pace new by 65 percent to 35 percent.

    Current trends driving the laboratoryequipment marketRising costs and time-to market demands are key drivers intoday’s laboratory equipment market. And labs are alwayslooking for new ways to become more efficient and reliable.But industry veteran are quick to point out that cost controldoes not come at safety’s expense. Most labs are always look-ing for ways to improve worker safety, at the same time takingadvantage of a continual stream of advances in lab equipment.

    One company that clearly is preoccupied with those two is-sues is Hettich Instruments, Beverly, MA, and a division ofHettich GmbH & Company, Tuttlingen, Germany. It has morethan 200 patents in its name, including the first micro-proces-sor-controlled centrifuges and the development of the first ro-botically integrated centrifuges to its credit.

    Moreover, Hettich is unique because its centrifuge is aboardthe Human Research Facility (HRF) of the Destiny Laboratory

    21

    continued on page 38

    Inside the lab.

  • DOTmedbusiness news I MARCH 2008 www.dotmed.com22

    A crowded market reflects complexity of digitalmedical imaging management By Barbara Kram

    The market for PACS, likethe technology itself, is adizzying constellation of re-sources. It’s hard to saywhich is more compli-cated—the healthcare system’s multipledatabases of digital images and informa-tion, or the marketplace of companiesoffering these systems and services.

    PACS—PictureArchiving and Com-munication Systems—includes the com-puters and servers, software and networksthat manage medical images from allmodalities. Many interfaces and applica-

    tions link to PACS including technologiesto convert the images to the DICOM stan-dard, enhancement and visualization soft-ware, high-definition monitors, backupdata and storage systems, relational data-bases, gateways and software to share andprotect images, brokers andprograms andapplications to synch with RIS (Radiol-ogy Information Systems) and HIS (Hos-pital Information Systems), along withlab systems, EMR, and so on.

    DOTmed estimates PACS to beabout a $1 billion market. But the sectoris in flux with companies merging in

    order to offer a full range of health IT so-lutions combining RIS (scheduling, re-ferrals, reports, etc.) and PACS (medicalimages and associated patient informa-tion). Most nNotably last fall GE ac-quired Dynamic Imaging, known for itsweb-based system.

    “Dynamic Imaging specialized inoutpatient imaging centers [OIC] andcommunity hospitals. That was the mar-ket we always wanted to be in becauseour initial market was all towards aca-demic, large enterprise [customers],”says Vijay Tanjore, Senior Marketing

    Thinking Systems PACS/RIS

  • DOTmedbusiness news I MARCH 2008

    Manager, GE Healthcare. The company has close to 1,000PACS sites worldwide. “Our product [their flagship is Centric-ity] was more sophisticated—a lot of bells and whistles—sogoing into OIC, it’s hard to take a product and skinny it down….We wanted to really give a product that fits that market.”

    Another prominent example of market shuffling was the2005 merger of software specialist Cedara software with aptlynamed Merge Healthcare, makers of a widely used radiologyworkstation.

    “Consolidations, acquisitions and mergers can leave cus-tomers holding the bag,” cautions Douglas Dill, Director ofMarketing, DR Systems, San Diego, CA. He suggests choosinga vendor that’s committed to PACS, perhaps a cost-effective,smaller PACS company.

    Industry insiders report a cooling at the upper end of themarket for big name systems, while opportunities abound tosell more modest solutions to medium and small hospitals, im-aging centers, and individual practitioners such as orthopedists.

    It’s helpful to think of PACS as a traditional pyramid mar-ket with high-end research and teaching hospitals at the peak.In middle are the bulk of community hospitals and radiologygroups. Smaller facilities, imaging centers and practitioners areat the base. While the entire top tier has PACS in some form,sales opportunities lie in their upgrades, and in penetrating thegreater number of customers lower down on the pyramid thatneed affordable solutions.

    “Large OEMs at the top serve research institutions, whichall have PACS and are digital, but the middle- and low-endmarket has opened up,” says J. Greg Perry, VP, Sales, Ameri-can Medical Sales, Inc., Hawthorne, CA. The company offersa gamut of PACS products including hardware and software,workstations, archives, gateways and web solutions to small

    hospitals, imaging centers, clinics and physicians. “We don’tcompete with brand names at the top but the growth in the mar-ket is concentrated toward the bottom.”

    “Most modern, large hospitals have PACS. But it might nothave been done as an enterprise-wide or department-wide solu-tion, so there is a lot of churn and upgrading going on in thehospital space,” notes Joe Maune, Director of Product Manage-ment, Carestream Health, Inc. “As you get into some of thesmaller, rural hospitals, those have yet to be penetrated withPACS implementation.” Carestream is noted for its completeportfolio of KODAKCARESTREAMRIS and PACS offerings,which can be integrated or purchased separately. Their systemincludes advanced visualization tools built in so radiologistsdon’t have to open other applications to use diagnostic software.

    “Many large hospitals were early adopters and their sys-tems are ripe for replacement,” observes Eric Mahler, Philips’Director of Field Marketing for Radiology and Healthcare In-formatics. “The technology has matured and solutions are fasterand better. The replacement opportunity is larger than net newbusiness.” He noted that the useful life of PACS hardware isonly about three years so Philips iPACS is priced to include ahardware and software upgrade to give customers confidencethat costs won’t escalate as new features are needed. “Hospitalsare looking for more information, more robust, feature-packed

    23

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    continued on page 26

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  • DOTmedbusiness news I MARCH 2008 www.dotmed.com

    solutions and predictable cost,” he says.Philips’ PACS is also compatible withmost other companies’ RIS, HIS, EMRand other applications.

    Room for Smaller PlayersMany medium-sized and smaller compa-nies are optimistic about market growth intheir PACS segments. Some feel that theDRA reimbursement cuts to some imag-ing centers have boosted the lower-endPACS market since small providers areseeking efficiencies.

    “Last year was a slow capital pur-chase year due to the DRA,” says WillMartinez, President, Trident ImagingServices, Santa Fe, TX. “Non-revenueproducing systems are usually put to-ward the end of the list [of purchase pri-orities]; 2008 should be a stronger yearfor PACS since [the installed base] isone year older and adjustments to theDRA are normalizing.” Trident is aMedlink dealer for CR, DR and PACS-sells Cedara and ComPACS systems.

    “Even without DRA, who doesn’tneed efficiency?” asks Scott Wasson,President, CEO, Radiology ServicesLLC, Evansville, IN, which sells PACS,CR, DR and diagnostic imaging equip-ment. “PACS is efficient and film is not.The major PACS selling points are finan-cial, ease of distributing images, spacerequirements and quality control.”

    “The primary driving factor for newPACS system adoption is smaller clinicsand hospitals that need to become moreefficient with their image management.They were unable to do this before be-cause the PACS vendors in the past weretoo costly for their budget,” says JimWheeler, Director of, Business Develop-ment, QStar Technologies Inc., Mary Es-ther, FL. The company provides PACSand email capture systems for the med-ical market and archive storage manage-ment products that help meet HIPAAcompliancy.

    In addition to GE, other OEMs arealso becoming more nimble in efforts toserve smaller customers. “Vendors used torequire that you buy all the hardware fromthem because theywould heavilymark upthe margins and require you to purchaseit,” says JimMorgan, Director ofMarket-ing for Network Systems, FujiFilm Med-ical Systems USA. “We were the firstfull-sized vendor that offered softwareonly. So we will give you a price withhardware if you want us to furnish it, oryou can shop it on the open market andbuy your own if you can get a better deal.We offer both.” The company serves cus-tomers that do anywhere from 10 to 3,000studies per day. “Our goal is to meet theneeds of the single box, up to a largemulti-site hospital chain.”

    Some Key DecisionsNot all PACS systems are web-based, al-

    though the internet predominates. Someuse on-site networks and servers.An ex-ample would be a multi-specialty prac-tice where the radiologists all come towork each day and just need access fromcomputers within the facility. Other con-figurationss are hybrids combining localand widespread resources.

    “Those that are web based are moresuccessful in the market. Those that arenot, are trying to morph their product toweb-based platforms. Or they are tryingto acquire companies that have a webproduct,” suggests Morgan.

    Some say that the internet is slowerand raises concerns over possible serv-ice interruption, along with higher costs.The degree to which you’ll need to shareimages with referring physicians andother radiologists will dictate configura-tion. The internet affords easy access byradiologists reading remotely with pri-vacy compliance and encryption fullysecured. Referring physicians are read-ily put in the loop, too. “That’s a verybig business benefit,” stresses Mahler.“Referring physicians will send morepatients if they get results quickly.”

    Of course pricing is the other criti-cal consideration. It’s not possible to es-timate how much a PACS system willcost without factoring in the provider’sscale in terms of number of clinicians,administrators, workstations, modalities,imaging studies, etc. Simple “PACS in abox” solutions can cost in the $10,000 to$200,000 range and are available and af-fordable for small healthcare providers.

    For example,ADDIS Systems—As-sociated Direct Digital Imaging Systems,Natick, MA, makes a standalone miniDR/PACS combo. It’s a software andhardware acquisition and storage pack-age perfect for individual practitioners.The product, priced up to $35,000, cango “anyplace where they can put an up-right bucky or mounted detector,” ac-cording to President Edward Small.

    Inclusive turnkey RIS/PACS solu-tions with hardware including servers,and software including dictation can runfrom $200,000 into the millions. How-ever, the pricing structure is typicallyquite simple since most many PACS sys-tems are priced by the study, known as“price per click.”

    One company that has bucked the

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  • DOTmedbusiness news I MARCH 2008

    price-per-click trend is NCS DataCom,Inc., an online PACS solution providerfocused on small- to medium-sized im-aging centers, small hospitals and radiol-ogy practice groups. Their offering iscalled perfect PACS. “This is priced at aflat rate per system access, facility,modality and reading physician. So it’snot a per-click solution. It’s doesn’t getmore expensive if the client gets moresuccessful,” says Jeff McConocha, ChiefTechnology Officer for the Cleveland,OH company. “Most of the other PACSproviders charge per study. That’s con-sidered a ‘per click’ because every timeyou do work, you pay for it.We have dis-covered that a lot of people in this mar-ketplace would like to have morebudgetable cost control.” Merely increas-ing the number of studies does not addcost in the NCS plan, which was de-signed by a radiologist. The costs wouldincrease only if a customer added a facil-ity or access point that the companywould need to manage.

    NovaRad Corporation doesn’tcharge per click either. “If customersdon’t want to purchase NovaPACS upfront because they are small hospitalsand can’t come up with the money, wewill give them a subscription-basedmodel where they pay for the softwareon a monthly basis based on their imageload but the cost doesn’t change,” saysVice President Paul Shumway.

    Some trends to watch in the PACSmarkets include ongoing mergers of RISand health IT vendors with PACS com-panies so that they can offer integratedsolutions. The key here is that the prom-ise of PACS to improve productivity de-pends on how well it works with otherdatabases to truly speed workflow. Otherhot technologies include 3-D visualiza-tion platforms and virtual reading envi-ronments in which radiology groupsread for multiple facilities, supported bythe teleradiology capability of PACS.

    “When people think of PACS, thefirst thing they think about is the imageon a monitor but any company can dothat—you can download a free vieweroff the internet. That’s the easy part,”says Lenny Reznick, Director of Enter-prise Image and Information Systems,Agfa HealthCare. “It’s really the integra-tion and how you fit into the workflow

    of the surroundings which makes it diffi-cult and that’s what separates Agfa fromsome of the other companies.” Agfa’sIMPAX integrates advanced 3-D visual-ization software from third parties suchas TeraeRecon for high-end universityhospitals.Agfa also offers its own visual-ization products to smaller hospitals.“One of the biggest differentiations wehave in our PACS product line is integra-tion flexibility. We know we need to in-tegrate with RIS, HIS and EMR but itdoesn’t stop there. It’s advanced 3D visu-alization, desktop integration, dictationand voice recognition systems, and criti-cal test results management systems.”

    Words to the WiseTo navigate the intricate PACS marketisn’t easy. Last year’s meeting of the Ra-diological Society of North America in-cluded 138 PACS exhibitors.

    “It’s a jungle out there and you haveto be careful. There are a lot of products,some are good, some not so good,” saysMike Bushior, Owner,AdvancedMedicalXRay, Somers, CT. He suggests goingwith a companywith local representativeswhowill be there when you need support.And don’t forget training. “Everybodytalks about the IT person and that’s impor-tant, but you really need a good applica-tions person that knows the imaging sidenot just the IT side,” Bushior says.

    At the risk of oversimplifying, in-dustry experts have told DOTmed that

    many of the technical aspects of PACSare similar from one high-tech productto another.As a result, important distinc-tions that affect the buying decision in-clude the level of integration withcurrent RIS and HIS systems, the ven-dor’s ability to map and migrate old im-ages to the new system, and after-salessupport, among other finer points.

    “PACS is the most complex sell ofall information products, involving clin-ical, IT, administrative, regulatory andother costs and operations,” says DRSystems’Dill. The company, founded byradiologists, offers an inclusive, cus-tomized turnkey RIS/PACS system withfeature-rich software functionalityaimed at community hospitals and imag-ing centers. “People think they need abig name for a long-term relationshipbut that’s not true. The OEMs’big ticketitem is the imaging modality. They bun-dle PACS with the modality. They throwit in free, so the customer thinks it is agreat deal but it’s not really. They maybe paying annual maintenance and nothave the interfaces they need. They thinkadding vendors adds complexity andcost but there is a high cost of ownershipif the system doesn’t adapt to the workthey need done.”

    He noted that it could be a problem toget software at a great price but then haveto do your own integration. “The percep-tion is cost savings but…cost is burdened

    27

    continued on page 39

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  • Foryears, mentioning the wordlaser evoked an image ofJames Bond, Auric Goldfin-ger and the latter’s intent onusing one to carve 007 in half.But times have changed. Today

    lasers are used for healing not mayhem.The word laser, incidentally, is an

    acronym for light amplification by stimu-lated emission of radiation. Applicationsinclude: the removal of tumors and cysts,sealing small blood vessels to preventblood loss, sealing lymph vessels in orderto alleviate swelling and stop the spreadof cancer cells, vision correction, vein ab-

    lation, oral surgery and treating skin con-ditions. In addition, lasers are used to treatchest pain, ectopic pregnancy, en-dometriosis, fibroid tumors, gallstones,nosebleeds, ovarian cysts, ulcers andmany other disorders, diseases and condi-tions.And given the inexorability of tech-nological advances, experimentation andresearch, the sky’s the limit on howmanyadditional uses loom. The American So-ciety for Laser Medicine, for example,says that more than 50medical specialtiesalready employ the technology.

    Doing Homework ImportantBefore BuyingThere are, as you would expect of a tech-nology driven discipline, a wide rangeof lasers available for medical treat-ments: the carbon dioxide (CO2) laser,the Neodymium:yttrium-aluminum-gar-net (Nd:YAG) laser, Dioxide and PulsedDye lasers. Others include the Erbium,Alexandrite, Plasma, Ruby andHolmium lasers, all used either in med-

    icine or cosmetics.Scott Jacobs, Director of Business

    Development, Nova Star MedicalEquipment, Livonia, MI says, “Like anymedium in the medical field, especiallypertaining to surgery, laser technical ad-vances seem to be occurring on a dailybasis.” He added, “Laser technology istruly amazing. Surgeons and trainedtechnicians are now able to do proce-dures never thought possible withgreater speed, allowing for a muchquicker recovery time for patients.”

    Nova Star’s right in the thick of thecompetition, offering IPL (intense pulselight), ND:YAG,Alexandrite, Pulse dye,Diode, CO2, cellulite reduction systemsand microdermabraders.

    As for doing the homework neces-sary to just sort through Nova Star’s cat-alog, Jacobs says laser buyers tend tooverbuy. “Doctors and spa owners needto do more market research before theygo out and buy a top of the line laser orIPL system.Many times they will be pay-

    DOTmedbusiness news I MARCH 2008 www.dotmed.com28

    Are Cutting Edge, and Lucrative Too!

    By Joan Trombetti

  • DOTmedbusiness news I MARCH 2008

    ing for features they’ll never use or need.”A piece of buyers’ remorse emerges

    when the buyer gets a little too cute.Buyers should understand that the aes-thetic and cosmetic laser equipmentcommunity is a very small one. Whencustomers play two or three companiesagainst one another, the equipment re-sellers and brokers find out. End resultis the buyer ends up spending moremoney in the long run. But if buyers areup front with the company they chooseto work with from the start; they will getwhat they want — at a price they wantto pay — without the headache. “Thisallows for a new relationship wheretrust won’t be an issue for future trans-actions, and both buyers and sellers bothfeel comfortable and everybody wins,”says Jacobs.

    That view is supported by AndreaPezzano, Director of International Mar-keting, Sciton, Inc., Palo Alto, CA.“Buyers tend to overlook the real capa-bilities that a laser has to offer, and attimes they are confused or mislead bythe complexity of the technologies.”

    One persistent question about thesales and service of lasers is whether abuyer has to be certified to purchaseequipment. Pezzano says it depends onthe state where the equipment is pur-chased. As a matter of policy, Scitononly sells to physicians. The companybelieves that only a physician or a med-ical practitioner under a physician’s su-pervision should operate laserequipment. Among Sciton’s top prod-ucts, the ProfileT, high performancelaser system, includes up to five laserand light modules and is available inover 30 different configurations. It’sused for skin peels, high-sped hair re-duction, photorejuvenation, vascular,pigmented lesions, acne, acne scars,wrinkles and more.”

    Opportunities Abound forLaser Service CompaniesWith the laser market growing at an im-pressive rate, the service side of the busi-ness is burgeoning.

    John Crownover, President, LaserScientific, Round Rock TX, says thatmany laser buyers focus too much on

    price and overlook service,warranty and support afterthe sale. “Lasers should beregularly maintained accord-ing to the manufacturer’s re-quirements,” he says.Regular maintenance mostlyguarantees that a physicianminimizes his exposure to li-abilities. Plus, routine checkups spot trouble before thedamage becomes too ex-treme or costly.

    Crownover suggeststhat a typical maintenancevisit can cost as much as$2000 (adding travel ex-penses and time into theequation). “While this mayseem costly,” he says, “whencompared to the cost of can-celing and rescheduling 10-20 patients, it’s quiteinexpensive.”

    Laser Scientific designsand manufactures productsfor the cosmetic and aes-thetic laser industry and pro-vides on-site laser serviceand repair supporting Lume-nis/Coherent, Candela, GentleLASE,GeltleLASE Plus and Laserscope toname a few.

    Service is the priority at JLJ United,

    Inc., Austin TX, which focuses on threeseparate areas of service. Company pres-ident Geoffrey Loveless says his techni-cians first ensure that all the components

    29

    The profile of precision.

    The Candela GentleYAG,a popular MedSpa laser.

  • DOTmedbusiness news I MARCH 2008 www.dotmed.com30

    are functioning according to the text-book. Technicians then focus on the ma-chine’s energy output and efficiency.“We also make sure it’s properly cali-brated,” says Loveless, adding that it’sthen restored to “like new” condition.

    Loveless, another proponent of pre-ventative maintenance, provides a pro-gram that initially costs $1,500 andincludes calibrations set to OEM speci-fications.

    Mike Moreno, President, MedPro,Inc. Marlton, NJ, is a stickler for pro-cedure. And when it comes to refur-bished cosmetic, medical andophthalmic lasers he says each oneshould be calibrated and inspected be-fore delivery to a customer.

    “This is complicated technology,and it is essential that it meets OEMspecs 100 percent upon delivery,” hesays. Moreno suggests manufacturersshould emphasize the importance of per-forming routine maintenance on pre-owned medical lasers. If practiced, mostmajor problems can be avoided.

    MedPro sells pre-owned medicalaesthetic lasers and IPL devices. Morenosays pre-owned lasers allow hospitalsand other facilities to improve patientcare and yet remain competitive by up-grading existing equipment at reason-able costs. He’s a big fan of the Internet,which has allowed many companies toreach physicians, plastic surgeons, der-

    matologists, hospi-tals, private practicesand clinics through-out the globe who arenot only looking fora greater selection ofequipment, but wantthe reseller to pro-vide an expandedrange of services likelogistics, recondi-tioning and warranty extension.

    Repairing exhaustedlaser tubesCO2 laser tubes can last anywhere from10 to 20,000 hours depending on usageand the volume of gas contained withinthe laser tube. Typically, laser tubescome with some type of reservoir tomaintain longevity, along with theproper mixture of laser gases. PhotovacLaser, Grove City, OH, customize lasertubes for automated applications, andaccording to the company’s President,Chris Zelich, “A used laser tube may beregassed and/or rebuilt to like-new con-dition and almost any core of a CO2(Argon/Krypton) laser tube can be re-manufactured to its original condition.”Photovac Laser also offers accessoriesincluding circuit boards, power supplies,laser heads, computer-aided design and“glass blowing”. “We support chemicaldistillation and fiber optic extrusion

    needs with our glass blowing services,”says Zelich.

    Blazing ahead in the fieldof laser technologyLaser Energetics, Inc., Mercerville, NJ,offers unique laser technology in whichthe laser can be conductively air-cooledto compete favorably against watercooled lasers in cosmetic and dentallaser applications such as hair removal,tattoo removal and teeth cleaning.

    CEO, Robert D. Battis said that thecompany is ramping up their develop-ment and production capabilities for thisBrightStarTMAlexandrite laser system,thanks to a $12 million dollar investmentfrom a company that Laser Energeticshas a relationship with. “This investmentallows us to bring both new technologyand refinements to our existing tech-nologies to the market in a very rapidfashion,” Battis says.

    Baby Boomers BoostMedi-Spa IndustryBecause of the demand, particularly fromthe baby boomer demographic, for cos-metic laser treatments, competition in thecosmetic equipment industry is stiff.

    Prices for laser procedures andequipment are on the defensive, en-abling health spas, salons and other fa-cilities to make laser treatmentsavailable. It’s estimated that of the $2billion plus spent annually on laser treat-ments, about 40% goes for such cos-metic procedures as hair removal andskin resurfacing.

    Baby boomers definitely are thedriving force in the medi-spa market.According to the U.S. Medi-Spa MarketReport for 2007, in a little more than adecade, the U.S. medi-spa market has

    Karen Hawk, Vice President of Sales, MedPro.“Buying pre-owned equipment sight unseen formany people is taking a huge leap of faith.We’ve found that DOTmed.com is greatly re-spected in our industry and our certification hasenabled us to more quickly and easily earn thetrust and confidence of prospective buyers.”

    DOTmed Web Sales

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    NovaStar Medical Equipment, Inc. 35204 Plymouth Road, Livonia, Michigan 48150Ph: 734-838-3249 • Email [email protected] • www.novastarmedicalequipment.com

    NovaStar Medical Equipment, Inc.is a leader in the sale and lease of

    OEM and refurbished medicalequipment. NovaStar also

    purchases, services, re-certifies, appraises andliquidates off-lease andpre-owned equipment.Every transaction isbacked by theprofessionalism andsupport ourcustomers haveknown for almost adecade.

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  • DOTmedbusiness news I MARCH 2008 31

    DOTmed Registered Surgical and Cosmetic Lasers Sales and Service CompaniesFor convenient links to these companies’DOTmed Services Directory listings, go to www.dotmed.com and enter [DM 5523]Names in boldface are Premium Listings.

    Name Company City State Certified DM100Karen Hawk MedPro, Inc. Phoenix AZAndrea Pezzano Sciton, Inc. Palo Alto CAKelly Clark New Laser Science, Inc. San Diego CADavid Spirko Laser Labs, Inc. Tampa FL ��Alex Boschi lambda Vicenza ItalyBarry Essig Lumina Power, Inc. Bradford M