The high quality and low cost of remanufactured diagnostic imaging equipment are one of the medical industry's best-kept secrets.

Older imaging systems, restored to incorporate technical improvements introduced since they first came on the market, are able to handle most of today's diagnostic requirements, according to Mark Schafer, director of imaging at Texoma Medical Center, a 350-bed hospital in Denison, Tex, and Michael Crade, MD, a Los Alamitos, Calif-based radiologist. On average, however, they cost only about one half the price of the latest top-of-the line systems. As a result, hospitals and imaging centers can leverage their budgets and get two first-class remanufactured systems for the price of one new one. However, many imaging departments are not considering remanufactured equipment as an option for a number of reasons, which include a combination of peer group pressures in the radiology community, a lack of awareness of what the remanufacturers have to offer, and the long memories of some purchasers who were sold defective equipment. "There are a lot of peer pressures at work," says Schafer. "Every facility would like to be able to tell people they have the latest and greatest technology. Buying new, however, is often a totally emotional response. There are a lot of people who want new and feel they deserve new after years of using older systems, and they are not concerned about what it costs and whether the latest features are really necessary." Texoma bought its first remanufactured system, a R&F room, last spring.

Many facility administrators believe there is a stigma attached to buying a preowned system, even if it is the equivalent of new. However, used equipment generally is a nonissue with both referring physicians and patients, who do not seem to care as long as the hardware produces high-quality images and an accurate diagnosis, according to Richard Vasquez, director of radiology at the East Texas Medical Center (ETMC), Athens.

According to Schafer, there is a lot of pressure on the person responsible for the purchasenormally the radiology director. "Whatever you buy had better work," he says. "No director has ever lost his job because he purchased a brand-new system. So it is a gamble and a risk to go with remanufactured equipment."

Further, Schafer notes, the original equipment manufacturers (OEMs) often exert pressure on decision makers. "They try to shame hospitals into buying new by implying they are making a major mistake by considering older systems that may lack a lot of the features of brand-new ones," he says. "But you need to question whether you really need those extra bells and whistles that often don't have all that much application to day-to-day imaging. What you really need is the ability to produce good-quality diagnostic images in order to assist physicians with the diagnosis of their patients."

Although Schafer is extremely pleased with the price and quality of his remanufactured systems, he admits he initially was skeptical about buying preowned equipment. "Our main need and our goal was digital fluoroscopy," Schafer says. "We had hoped to get enough funds to replace two R&F rooms. But we also knew that if we got only enough money to replace one of the rooms, then the other room would never be used again by our radiologists. And we also knew that our volume was too great to have that happen. In our search for a vendor for the two rooms, we got a  recommendation from a supplierof film, chemicals, and product serviceto look at remanufactured units. We had never looked at them before, and to be quite honest, we were extremely hesitant to even consider that option. Our concern was that we would wind up with a 2-year-old piece of equipment that had just been repainted, and that we would have repair issues and wouldn't have the uptime we needed. We felt under a lot of pressure to make the right decision."

A SITE VISIT

Schafer, however, did agree to include among his site visits a hospital using remanufactured equipment. "We did not go there with a particularly positive outlook," he says. "We didn't expect to find anything positive about it. But we found the user had nothing but positive things to say. Then we went to the factory where the remanufacturing was done. It was an eye-opener for us. We were very impressed. We found out that we would get a 10-year-old shell with everything else new from the ground up. Every wire. Every relay. Every processor. About the only thing that wasn't new was the table itself."

Texoma purchased a rebuilt R&F system and had the factory incorporate a new digital fluoroscope of the same type being supplied with new digital R&F systems. The price was 32% less than the cost of a new digital R&F unit. With the money saved, Texoma had the same digital fluoroscopy system installed on its other R&F unit.

The remanufactured systems not only saved money up front, but have helped the department in other ways. "The digital systems have increased our throughput by 50%," says Schafer. "We have had great images and no downtime. I will definitely be looking at remanufactured in the future if I need anything that involves general radiographic or fluoroscopic equipment."

The 115-bed East Texas Medical Center in Athens, a rural community 75 miles south of Dallas, has found remanufactured equipment to be a good way to leverage its resources. ETMC acquired two R&F rooms 18 months ago. "Basically, I was able to justify buying the two remanufactured systems because I could get two for the price of one new one," says Vasquez. The hospital, a level II trauma center, keeps its imaging equipment working 24 hours a day, 7 days a week. It has three radiology roomsCT, MRI, and ultrasoundas well as C-arms and portable x-ray equipment, and has basic radiology equipment in its outreach clinics. It also has access to a mobile catheterization laboratory out of Tyler, home base for the East Texas Regional Health Care System.

Vasquez notes that because basic radiology has not changed much in the last 30 years, he can purchase a 10-year-old remanufactured x-ray system that operates at the same level as a new one. "My philosophy is that x-ray equipment is x-ray equipment is x-ray equipment," Vasquez says. "Depending on the individual hospital situation, if you are going to shoot a lot of plain film, then remanufactured equipment is certainly a good alternative because the important componentsbearings, tubes, generators, terminal blocks, collimatorare usually new. There is not much that can go wrong with the mechanical components, such as the tabletop."

Like most buyers of remanufactured systems, Vasquez is not very concerned with the pedigree or age of the hardware he is buying. "Uptime is the biggest thing we are concerned with," he says.

Referring physicians are unconcerned with ETMC's use of remanufactured equipment. "As long as they get their procedures done [they will use it]," Vasquez says. The radiologist who does interventional procedures supported the purchase of the remanufactured unit because it came with a new fluoroscopy system. The staff radiologists were mainly concerned with the installation and calibration of the new units, which were handled by the firm contracted to service them.

Most remanufactured systems come with a 1-year warranty, and buyers are able to restart the clock on American Hospital Association program life and use its recommended

depreciation schedules. "We have had some minor maintenance issues, but for the most part they have been resolved," says Vasquez. "With radiographic equipment you are going to have some failures."

The only thing he believes potential buyers need to be concerned about is whether the remanufacturer has experience doing installations. "If not, put in the contract that whoever is doing the installation will go to training prior to putting it in," he says.

BUYER BEWARE

Schafer has a different caveat: hospitals need to be cautious when selecting vendors. "Not all remanufacturers are the same," he says. "Some are certified to be in compliance with ISO 9000 international quality control standards, but others are not. You should select a vendor that is ISO 9000 compliant." ISO certification guarantees the equipment meets the minimal specifications of the OEM.

According to a remanufactured equipment representative, about 20% of radiographic sales today are remanufactured units. The fastest sellers are R&F roomshalf are still analog and half are digital upgradesfollowed by CT and MRI units. In third place are portable x-ray units, with catheterization laboratories and angiography suites ranking fourth and fifth.

The same equipment representative adds that one reason remanufactured R& F is flourishing is because reimbursement is so low that it is difficult to make money. So radiology administrators are trying to cut costs and are looking at payback. Reimbursement  is the same whether a hospital or clinic spends $400,000 for a new system or $200,000 for a remanufactured one.

Another reason for the increased use of remanufactured equipment is that rural hospital and clinic administrators are looking for systems that will work within the framework of their PACS, so they want something with DICOM capabilities. Digital upgrades can be had for half the cost of new hardware.

One vendor reports that most remanufactured R&F systemsabout 60%go to hospitals with less than 100 beds, and 20% to medical centers and hospitals with more than 300 beds. Clinics and private practice offices purchase the remaining 20%..

OTHER MODALITIES

Another imaging modality where remanufactured units are gaining adherents is ultrasound. West Coast Radiology Diagnostic Imaging and Radiation Oncology Center in Santa Ana, Calif, acquired three remanufactured units a year ago. "What you buy depends on the practice, the competition, and your payor mix," explains Tim Chavez, operations manager, who handles all purchasing negotiations for the imaging 0center. "You have to be aware of the competitive situation when ordering equipment."

The remanufactured ultrasound units, which are used for peripheral arterial and abdominal scans and OB/GYN procedures, are working fairly well, says Chavez. They were one half the cost of new units and came with a full 1-year warranty. Chavez also is considering the purchase of remanufactured gamma cameras because they will enable the center to keep its fixed costs as low as possible.

Another advocate of remanufactured ultrasound is Michael Crade, MD, a radiologist with a high-volume private practice in Los Alamitos, Calif, who has specialized in ultrasound since 1977. He has three remanufactured units in his main office and two more in outlying clinics. They all are vintage 1994 to 1998 but have been upgraded to be the equivalent of today's top-of-the-line new units, he says. Crade prefers remanufactured units because, he says, "I can get two or three for the price of a brand-new one."

Crade does perinatal and neonatal examinations as well as ovarian cancer screening and says he personally examines one half of all his patients, viewing the images in real time. "In skilled hands, there is nothing that is missed using remanufactured equipment," he says. "Most hospitals buy an expensive unit and let a person 1 year out of training use it. Hands-on counts for a lot in ultrasound."

With the exception of breast examinations and obstetrical examinations for very large patients, Crade believes an upgraded ultrasound will give the same results as a new ultrasound unit. And service has not been a problem with Crade's used machines. "If your images start to degrade, it is usually not the machine but the monitor; you can buy a new one for a few thousand bucks," he says.

Richard B. Elsberry is a contributing writer for Decisions in Imaging Economics.