“Skate to where the puck is going, not to where it is,” Wayne Gretzky said.
"Skate to where the puck is going, not to where it is," Wayne Gretzky said.
The medical imaging community would love to follow this advice in planning its future. The problem is that nobody knows where the puck is going.
Vendors are keeping a stiff upper lip, talking optimistically about a near-term end to falling sales. But the brave talk cannot mask the fact that the imaging industry is in recession -- the most serious in 15 years -- that will in all likelihood continue unabated, or worsen, in the months ahead.
CT and MR sales, the bellwethers of the industry, are off dramatically. Vendors worry that the fourth quarter may not bring the usual surge in orders following the RSNA meeting. There is good reason for this concern.
Not since the Clinton administration toyed with the idea of healthcare reform in the mid-1990s has demand for CT and MR fallen so much so quickly. And it's not just demand for big-ticket items that has dropped. Many hospitals have put the kibosh on spending for all medical, big and small. The credit crunch and problems affecting financial liquidity are forcing hospitals and imaging centers to defer until next year or beyond the acquisition of new equipment.
Vendors tell me that even their best customers, large teaching institutions, are cutting back. One reason is the historic drop in the stock market. The stock-based endowments that once paid for new equipment have fallen in value as has the income to hospitals that they once provided. Unless administrators can be convinced that a new purchase will generate more income through greater efficiency or new applications, they will not buy it.
Uncertainty about future demand is underscored by the coming political change in Washington. President-elect Barack Obama swept into office with a commitment to change, not only in foreign affairs but in domestic ones. Until the bottom dropped out on financials this autumn, his domestic agenda included the expansion of healthcare. The new economy will affect that agenda. Talk of universal healthcare will give way to economic reality.
The harsh reality is that fewer, not more, residents in the U.S. will be covered by medical insurance next year. As businesses cut back their payrolls, the cost of insurance gets shifted to laid-off workers, many of whom will elect to reduce or eliminate their coverage.
Studies have shown that people without insurance are less likely to seek medical attention than others. And so it goes.
The hope among equipment vendors is that the new administration will come to realize that medical imaging, done wisely, saves money by finding disease earlier, when it is less expensive and less difficult to cure. In the current situation, however, politicians will not be likely to increase the reimbursements that would encourage the use of imaging.
Under these circumstances, the installed base of imaging equipment will be enough to handle demand. We have the broadest base of MR, CT, and ultrasound scanners of any nation in the world. Even if demand continues to increase, as evidenced by the single-digit annual rise seen over the last decade, running scanners another hour or two a day or improving efficiency 10% will more than handle it.
This is the probable eventuality, given the recent shift in replacement cycle seen in big-ticket items. Over the last decade, this cycle for MR and CT scanners has shrunk from around seven years to five. If pressed, the operators of these systems could stretch the cycle back to where it used to be and add another year or two.
So we come full circle to the question: Where is the puck going? Very possibly, it is going backwards. The imaging community is in for hard times, not just this next quarter and maybe not even just the year ahead. Imaging has taken a hard check into the boards and we are stuck, at least for the time being, immobilized by forces beyond our control.
The good news is that medical imaging will snap back. Installed equipment can be stretched in hard times, but eventually technological advances and pent-up demand for services will require new purchases. The tough part is keeping our eyes on the puck when our faces are up against the glass.