By Jeremy Probst
Everyone loves a bargain, but the old saying, “you get what you pay for,” rings true in medical imaging just as it does for anyone making important purchases.
As the impact of the COVID-19 pandemic continues to take shape, hospitals and imaging clinics are being forced to make budget cuts in many areas, including technology. Investment bank Cowen surveyed hospital administrators in mid-2020 and found that 70% said they had redirected capital budget toward COVID-19 spending. For medical imaging departments, that often translates into keeping older systems in operation longer rather than spending on new equipment.
Keeping imaging equipment running is crucial to meeting patient needs and supporting a health care facility’s bottom line. If you’re involved with sourcing and purchasing medical imaging replacement parts, you may be under pressure to reduce costs. While there’s nothing wrong with exploring your options, be sure to consider the big picture.
Financial State of Medical Imaging in 2020
In 2019, medical imaging revenue experienced growth of 1.5%. That trajectory took a sharp downturn in 2020. According to research from Omdia, the market declined 4.6% last year.
Even though COVID-19 sparked increased demand for mobile digital radiology and CT scans, the latter of which showed 5% revenue growth in 2020, all other modalities saw declines. In fact, Omdia’s research indicated an expected 18% dip in MRI revenues.
To remedy the downturn in revenue, many facilities are choosing to extend the life of existing imaging systems through ongoing preventive maintenance and servicing. It’s an ideal way to continue scanning patients versus spending thousands on expensive new equipment.
As OEMs introduce updated models, they may claim that older systems have reached end-of-life and stop providing replacement parts under a service contract. To avoid costly downtime, imaging departments need to feel confident that the parts they purchase will arrive in working order.
Repercussions of a DOA Replacement Part
When a medical imaging replacement part shows up “dead on arrival” (DOA), it makes no difference if the vendor sends a different part for no additional charge. The health care facility will likely incur costs stretching far beyond the price of the part.
Just a few hours of imaging equipment downtime can mean the loss of tens-of-thousands of dollars. So, it’s easy to picture the impact of waiting days for a working replacement part to arrive and get installed.
Imagine an engineer identifies a faulty X-ray tube in a CT system. The engineer receives quotes on a replacement tube from a few different vendors. The difference in the price of the cheapest part and those from other sellers is several hundred dollars, and the least expensive option is chosen.
When the tube arrives and is installed, it doesn’t work. The DOA replacement part means someone will need to contact the vendor, explain the situation, and get a different part as soon as possible. But shipping another part will take at least an entire day.
Let’s say the price of a CT scan at this clinic is $1,700, which is about average. If that CT scanner was scheduled for use with one patient per hour over a 24-hour period, that equates to a potential loss of more than $40,000.
The cost of servicing the system twice adds up as well. If the work can’t be done in-house, the clinic may need to pay for handling fees, travel, lodging and potentially more. There are also salaries being paid to CT technicians who are unable to do their jobs while the system is down. Plus, if the downtime erodes patient trust, they may choose to seek treatment at a competing clinic.
Was saving hundreds of dollars on a faulty part worth the hassle and tens-of-thousands of lost revenue?
Hallmarks of a Reliable Partner
When choosing a partner to provide replacement parts, medical imaging departments should first look at the company’s DOA rate and ask questions about how they approach quality control and assurance.
When replacement parts are harvested from a machine, are they rigorously tested? Do refurbished parts get plugged into live machines to ensure proper functionality? Is the organization using a state-of-the-art enterprise resource planning (ERP) system to track inventory and shipments? Will the parts you order be properly packaged to avoid damage during transit?
A reliable partner provides customers with information about the remaining life expectancy of parts. They should also offer exceptional customer service and technical expertise to help with troubleshooting. These things may add to the total cost of a replacement part − but receiving a quality part that reduces system downtime should be the priority. Taking extra steps for the sake of quality management pays off in the long run.
While medical imaging revenue is expected to bounce back in 2021, that optimistic outlook assumes we’ll have a handle on the pandemic. The future is still uncertain, which makes the value of a trustworthy partner even more apparent.
Jeremy Probst is the president and CEO of Technical Prospects. He has more than 19 years of experience in the medical imaging and engineering field.
