Feature | May 22, 2006 | Judith Cassidy

Like New for Less

OEMs deliver high-quality modalities at lower costs.

This operator at GE Healthcare is completing electrical assembly of the Lunar Bravo scanner utilizin

As costs continue to soar for the medical community, health professionals are looking for ways to save money while not jeopardizing the quality of the healthcare they deliver to patients.
One way medical centers and hospitals can keep costs down is through the purchase and application of refurbished imaging equipment.
Major equipment manufacturers, such as Siemens Medical Solutions, GE Healthcare and Phillips Medical Systems, are all in the business of refurbishing equipment for resale and reuse.
High-quality refurbished equipment is available in all imaging modalities: MR, CT, PET, nuclear, X-ray and ultrasound.
Refurbished equipment is more than a politically correct name for previously used equipment — the process of refurbishing such high-tech and intricate machines is very involved.
“Siemens Medical Solutions' refurbishing process involves several hundred individual steps which result in consistent high quality and performance of the refurbished equipment,” said Christian Seyler, vice president of Refurbished Systems Division for Siemens.
The main steps involved in the refurbishing process, according to the three manufacturers interviewed, include evaluating the history and quality of the original equipment; initial inspection and professional transportation; and an in-depth refurbishing, including checking all components, upgrading software, replacing worn parts and checking and testing of all systems as well as disinfecting the entire machine.
This process results in the like-new quality of the refurbished equipment, Seyler said.
Stefka Koenig, field marketing manager of Diamond Select CV/General X-ray/Surgery with Philips says the company brings the equipment up to the latest system specifications available for the particular system.
“In that sense, it is like giving the unit a second life,” she said.
Joe Shrawder, general manager of GE Healthcare GoldSeal business, described what it means for equipment to be truly classified as refurbished.
"Remanufactured systems have a new identity (new serial number) and are essentially new systems built from some combination of new and pre-owned parts,” he said. “These systems may bear little or no resemblance to the products from which the used components came. At GE Healthcare [also Siemens and Philips], we do not perform any 'remanufacturing' because that would require FDA certification and adherence to strict FDA requirements, which would likely erode the benefit of using pre-owned parts,” he said.
Refurbishers are not regulated by the FDA because they are essentially performing a service function, Shrawder said. “OEM refurbishing is a step better because it ensures that original like-new quality, condition and performance are achieved,” he said.
The most important distinction is in the term OEM-refurbished, according to Schrawder.
“This type of product differs from all others in the field because these systems are guaranteed by the OEM to meet all quality, performance and reliability standards of new systems and, in fact, they come with a full same-as-new factory warranty,” he said.
Siemens and Philips also provide professional installation and a full-year warranty and service agreement equivalent to those offered with brand new equipment.
“Our refurbished equipment is taken care of by engineers who build our brand new equipment, so that is why our quality is like that of a new system,” Koenig said.
The types of imaging equipment that are most commonly refurbished by Siemens are CT, SPECT/nuclear medicine and ultrasound. “Together they account for more than two-thirds of the total units refurbished,” Seyler said.
Siemens acquires most of its equipment from trade-ins.
“Satisfied Siemens customers who upgrade to a newer Siemens technology offer their existing system for trade-in,” he said. “We also obtain systems from lease-buy-backs.”
OEM refurbished systems tend to have lower cost of ownership, Shrawder said, because they are built to the highest quality standards and backed by the manufacturer's warranty and service organization.

Dollars and Sense
GE Healthcare talks to its customers about the quality of refurbished equipment and its cost benefits.
“We have new systems available if that's what they insist on buying, and it's their money,” Shrawder said. “We seek to make sure they are aware of their options and are fully educated in the merits of pre-owned systems.”
Philips takes customers to sites where refurbished equipment purchased through its Diamond Select program is already in use so they can see the quality of performance first hand.
“And we give customers a guided tour in our factory to see how much effort is put into it,” Koenig said. “It gives them an assurance that what they are getting is quality.”
Siemens utilizes its established new-business sales channels to market its refurbished equipment to potential customers, Seyler said. “With the Proven Excellence program, Siemens offers its customers who are faced with stringent budget restrictions the same known Siemens quality, the same customer-focused service, the same professional guidance and the same outstanding treatment as they would receive with the purchase of a new system — at an excellent price/performance ratio,” he said.
One of those customers is Mt. Sinai Hospital in Chicago. Farida Razvi, resource coordinator for nuclear medicine, is a major proponent for the use of refurbished equipment.
About a year ago, her department was searching for a new ECAM. She talked with Siemens and decided to purchase a refurbished machine.
“Mt. Sinai is a not-for-profit hospital, so whatever budget is allocated for equipment is what we have to work with, while at the same time needing to stay competitive in the healthcare we are delivering,” Razvi said.
The refurbished ECAM they purchased from Siemens not only has met the department's budgetary requirements, it has made a positive impact on the level of care provided to patients.
“They put a new crystal in for the camera and that is the most expensive part, so that was very important. They also installed updated software,” Razvi said. With those upgrades included, Mt. Sinai could use money it saved toward the purchase of other “extras” for patients, she says.
Shrawder at Siemens agreed with Razvi's assessment.
“Outpatient imaging centers tend to be very astute financially and are focused on system functionality and performance (in short, return on investment) rather than technology leadership or newness,” he said. “They recognize that OEM-refurbished systems, which are proven to be equal in quality to new systems, are a great investment, and they free up funds to invest elsewhere in the business.”
The opportunity to purchase refurbished equipment over brand new gives the medical centers financial choices on where to spend their money, Koenig said.

Good as New
The typical age of the equipment varies based on the system type as well as on the date the system was initially launched, Seyler said. On average, systems sold through the Siemens Medical Proven Excellence program are three years old. However, Siemens also offers its customers who value up-to-date technology the opportunity to purchase younger systems. In general, almost 60 percent of the refurbished products in the Siemens Medical Proven Excellence program are still available as new systems as well, therefore representing current system types and software levels.
Because of all of the upgrades, the refurbished equipment comes out as close to new as possible, therefore providing customers a machine with a whole new life.
Through their experience with the ECAM purchase, Mt. Sinai and Razvi have become big supporters of using refurbished equipment. She expressed great confidence in the quality of the machines and the process.
'”As far as nuclear medicine [department] is concerned, I am happy with the use of refurbished equipment. [The OEMs] go through a lot of testing on the equipment before reselling it. I find refurbished better than something that has not been through all of these tests,” Razvi said.
Koenig agreed, saying, “The reliability [of refurbished equipment] is just the same [as brand new]. The look of the system and how it performs is just the same or comparable to a new system.”

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