Flaws in business model come home to roostPhysicians have long questioned the value of screening centers, noting their propensity to uncover clinically irrelevant findings, which leads to unnecessary testing, excess radiation
Flaws in business model come home to roost
Physicians have long questioned the value of screening centers, noting their propensity to uncover clinically irrelevant findings, which leads to unnecessary testing, excess radiation exposure, and a general waste of money. Now it seems the providers of these services may have worn out their welcome with the public as well. AmeriScan, a leading chain of centers offering whole-body scanning, has closed all but two of its nationwide locations.
More than 20 facilities have been shut down, including centers in Chicago and Philadelphia. The company's Web site offers no word on the closures but lists only two viable locations: Glendale, AZ, and San Jose, CA. Calls to both locations were answered by the same man in Glendale who said no one was there: no doctors, no technologists, and no customers. He said the other facilities began to close several months ago. The director of marketing was gone as well. AmeriScan CEO Dr. Craig Bittner could not be immediately reached for comment.
AmeriScan is the second such chain to experience serious problems. Late last year, whole-body scanning pioneer CT Screening International shuttered its 12 nationwide facilities. At the time, however, AmeriScan's business appeared to be booming. The company announced plans to add 10 new centers to its 12 existing facilities. And in spring 2003, Bittner publicly predicted his chain would grow to 500 centers. He began offering additional techniques, including MR mammography and virtual prostate cancer scans, while promoting franchise opportunities to providers interested in screening services.
Industry pundits have warned for years that the business model for screening centers was flawed. They argued that rapid expansion could create a crushing burden of debt, unless a steady stream of revenue could be created. A struggling economy reduced the likelihood that many patients would pay $500 or more for these exams, which are not covered by insurance. And because patients refer themselves, the cost of attracting business is high. Some reports estimate that screening centers have spent as much $2500 in certain regions to acquire each customer.