In the radiology community, it’s widely known… the economic downturn has eviscerated the equipment manufacturers’ sales of high-dollar imaging tools. The sour economy, coupled with the drastic cuts in MRI and CT reimbursements, in particular, have hit those two modalities hardest. Eighteen months into this economic malaise, are there signs of recovery? Apparently GE Healthcare thinks so…
In September / October of 2008, when the bond markets froze solid (the vehicle through which most hospitals get their equipment capital), orders for multi-million dollar MRI machines ground to an abrupt halt. In fact, many pending orders were suspended, or canceled outright. Over the past 18 months, the MRI equipment sales market has remained similarly depressed.
While sales of new MRI’s all but disappeared, the financial stresses on many MRI providers led to a glut of used MRI equipment hitting the market. A provider could buy a gently-used MRI scanner for ten cents on the dollar (as compared to the cost of a new system). But neither the slowdown in purchase of new equipment, nor the increased trading of used MRI scanners, did anything to slow the obsolescence curve of in-service MRI equipment.
In the US, the typical ‘first-use’ life of a new MRI scanner is around 7 – 8 years. The 18 months of depressed sales is equal to the time in which 20% of ‘purchased new’ MRI scanners crossed the fuzzy obsolescence boundary.
To be sure, that threshold has been established with not only technical considerations, but in direct response to competitive forces that have significantly changed in the last couple years. Perhaps ‘first-use’ life will be permanently stretched as a result of the market changes, but the fact remains that many MRI scanners that were slated for replacement a year-and-a-half ago are still in service, awaiting their retirement. Apparently GE is thinking that there will be a number of retirement parties for past-their-prime MRI scanners in the near future.
In Florence, SC, where GE builds the magnets that are at the heart of their MRI systems, a major plan is afoot to increase staffing at the plant. Early in January, the company announced that they were creating 20 – 25 new jobs at the Florence plant.
As questions continue to hit the mass media about the safety of ionizing modalities such as CT, and with breaking new applications for MR such as the first MR-guided heart catheterization, MRI will continue to have a growing clinical demand. This is to say nothing of the aging demographics of the US, and the dramatic increase in imaging utilization based on patient age.
It appears that the long winter for MRI is showing signs of ending, and that spring, though it may be slow to develop, it right around the corner.Tobias Gilk, President & MRI Safety Director Mednovus, Inc. Tobias.Gilk@Mednovus.com www.MEDNOVUS.com