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Creampuff MRI, Reconditioned, Make Offer

December 16, 2010
Written by: , Filed in: Practice Management
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The economic squeeze has inspired more hospitals and clinics to buy used but refurbished MRI machines, CT scanners, and other imaging devices, according to a report by Reuters.

Reporter Julie Steenhuysen contacted Siemens AG, Philips Electronics, and GE Healthcare. All sell refurbished as well as new equipment, and all said the market was growing. “We’ve seen double-digit orders growth this year,” said Dave Elario, global general manager of GoldSeal, GE Healthcare’s refurbishing business.

Most of the increases have come outside North America, especially in emerging markets such as Latin America and India, Elario said. “I don’t think it’s a blip. We’ve been at this for 12 years. There’s a large market out there.”

Jeroen Gruben, general manager of refurbished systems at Philips Healthcare, said independent health-care providers, corporations, and even some government buyers are looking for cheaper alternatives to new machines. He said that the North American market was well established, but that the company was seeing more interest from Asia.

Elisabeth Staudinger, chief executive officer of refurbished systems at Siemens, said her company has been refurbishing equipment for about a decade. “It started out as a project, and now it’s a full-fledged business unit,” she said. Siemens had double-digit growth in North America in the past year, though the market for new equipment was flat, she said.

Siemens discounts new equipment if old machines are traded in. The company fixes up the old machines and sells them for 15 to 25 percent less than equivalent new machines. Gideon Praveen Kumar, PhD, an analysist with market researcher Frost & Sullivan, said unrefurbished used equipment typically sells for 30 to 40 percent less than a new equivalent. These machines can cost millions of dollars apiece, so a few percentage points can add up.

When Siemens gets a used machine in trade, Staudinger said:

We do a lot more than just fixing it.

She explained: “First, we clean and disinfect it. Then we take off the cover, and we do a technical refurbishment inside. We replace all parts which might show tear and wear. In many cases, we replace all of the information technology around the system.”

Siemens also positions buying refurbished instead of new equipment as a “green” choice, Staudinger said. “We calculate it is about 20,000 cubic tons we save of carbon dioxide” each year, she said. Siemens also replants trees in Indonesia as a carbon offset, she said.

“It’s an additional aspect. People really like it.”

Related seminar: The Business of Radiology

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