Dismal economy now hidesprosperity just around the bend

April 1, 2009

Economic issues beyond the imagingcommunity affect sales of imagingequipment.

Economic issues beyond the imaging community affect sales of imaging equipment. Vendors respond by lowering prices and designing lower cost products. The development and release of such products indicate a market ruled by emotion. Buyers see an uncertain future in reimbursement and regulation, and they look for ways to mitigate the risks.

The process of working through the stages of grief is playing out daily. The first two stages are already behind us: denial (“This isn't really happening to me!”) and anger (“Why is this happening to me?”). We have now entered stage three, bargaining (“I promise I'll be a better person if-”), which is demonstrated on a macroeconomic scale by our new president shoveling money into the furnace to keep us warm and within our industry by buyers seeking lower cost products and vendors cutting prices to make sales.

Still ahead are depression (“I don't care anymore.”) and acceptance (“I'm ready for whatever comes.”). Neither is going to be much fun. Depression arrives in two steps: Buyers will first say they don't care when deep down they really do. Then they'll say it and mean it.

This latter part of the depression stage enables acceptance but causes the final stage of the grieving process to last longer than it has to. Why? Because when buyers have accepted that things won't get better, things do, but they won't recognize the improvement for a few months.

For the time being, the imaging community is trapped by real and imagined forces beyond anyone's control. The good news is that it won't go on for very long. The last big downturn in the imaging marketplace came in the mid-1990s. It bottomed out in a couple of years.

Like now, fear and uncertainty caused buyers to pull back. The fear then was of the Clinton administration's plan to overhaul the healthcare system, which ultimately fizzled but left lingering effects.

The grieving process continued for more than a year after the threat was gone while buyers got used to the idea that the worst did not happen. Then they needed time to gin up their budgets for the next year's purchases.

Ultimately, sales of imaging equipment rebounded to new heights. In the aftermath, analysts proffered various reasons for the return to prosperity. The demise of the Clinton health plan and efforts by manufacturers to develop better or lower cost equipment, such as open MR and multislice CT, got most of the credit. But looking back, the fall and rise of the market reflected the five stages of grief.

If history repeats itself, we'll all be feeling better soon. Sales will start to rebound in a year to 18 months. They'll return to recently attained heights in a couple of years more. And record sales will be the norm in four or five.

While it's not yet time to celebrate, the day is coming. The best is yet to come.