Good Grief! The best is yet to come

February 26, 2009

Economic issues stretching well beyond the imaging community are affecting sales of imaging equipment. Vendors are responding by lowering prices and designing new, lower cost products. Siemens began the trend with its 1.5T Essenza, priced below $1 million, more than a year ago and followed up last week with the release of an entry-level and upgradable gamma camera, its Symbia E. Earlier this year, Toshiba gave its Aquilion Premium, a 160-channel CT scanner that can be upgraded in the field to the company’s 320-channel Aquilion One, a soft launch. The company decided to forgo the usual attempts to generate publicity and prime the market in order to get the product in front of customers as soon as possible. Philips and GE have each introduced similarly low-cost, high-performance units designed for budget-strapped facilities.

Economic issues stretching well beyond the imaging community are affecting sales of imaging equipment. Vendors are responding by lowering prices and designing new, lower cost products. Siemens began the trend with its 1.5T Essenza, priced below $1 million, more than a year ago and followed up last week with the release of an entry-level and upgradable gamma camera, its Symbia E. Earlier this year, Toshiba gave its Aquilion Premium, a 160-channel CT scanner that can be upgraded in the field to the company's 320-channel Aquilion One, a soft launch. The company decided to forgo the usual attempts to generate publicity and prime the market in order to get the product in front of customers as soon as possible. Philips and GE have each introduced similarly low-cost, high-performance units designed for budget-strapped facilities.

The development and release of such products are indicators of a market ruled by emotion. Buyers see an uncertain future in reimbursement and regulation and they look for ways to mitigate the risks. Vendors come up with ways to do so.

This process, of working through the stages of grief, is playing out daily in the personal lives of millions. It is relevant to the corporate world, particularly in the current economic climate, which, after all, is rooted in our human perceptions and the way we respond to them.

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 buyers won't recognize the improvement for a few months.

So…what does it all mean? Simply that -- 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 was of a plan by the Clinton administration to overhaul the healthcare system, a plan that ultimately fizzled but whose effects lingered. 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 reach 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 MRs and multislice CTs, 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.