Low-field MRI tugs prices down

July 31, 1991

Technological developments in magnetic resonance imaging are pushingequipment prices down across the spectrum of MRI field strengths,according to Leon E. Smock, vice president of operations for ImagingManagement Associates. High-field MRI systems that

Technological developments in magnetic resonance imaging are pushingequipment prices down across the spectrum of MRI field strengths,according to Leon E. Smock, vice president of operations for ImagingManagement Associates. High-field MRI systems that used to sellfor $2 million or more can be found for $1.5 million.

New low- and mid-field systems with reduced purchase pricesand siting/maintenance costs have spurred price competition inMRI, he said. IMA, located in Cherry Hill, NJ, is an imaging centerfirm that specializes in providing low-field MRI services to managedcare groups (SCAN 1/16/91).

"(MRI systems) are more compact, which reduces sitingcosts. Maintenance costs are lower and system downtime is approachingzero. (MRI) technology is finally catching up (with demand forlower cost equipment), as happened with CT scanners, which usedto cost $2 million. Prices are dropping dramatically because ofthis pressure," Smock said.

IMA has placed one of the first U.S. orders for Hitachi's 0.3-teslaMRP 7000 permanent magnet system, introduced in November at theRadiological Society of North America conference. The unit willbe installed at the West New York, New Jersey Center, an imagingcenter under management by IMA.

The center company owns six centers and manages two in NewJersey, Delaware, Illinois and Florida. A ninth center is underdevelopment in Cherry Hill, NJ. All of the facilities operatemagnets of 0.4-tesla or lower field strength, he said.

One reason IMA recommended the purchase of Hitachi's 0.3-teslaunit over the Japanese vendor's 0.2-tesla MRP 5000 is that twoof the older magnets are scheduled for installation within a 10-mileradius of the West New York site, Smock said.

The imaging services firm is impressed with the MRP's sitingadvantages. The Hitachi equipment requires no more than standardenvironmental air conditioning for its computers. Annual systemmaintenance costs are about $75,000, compared to approximately$170,000 for a 1.5-tesla GE Signa MRI unit, including cryogensupply, he said.

Dropping equipment costs are not a windfall for center firms,however, Smock said. Managed-care groups, private insurance payersand the government are all pressing for lower priced exams, whileother operating costs continue to rise. For instance, technologists,who are in scarce supply, are asking for higher pay, he noted.

"We are being squeezed, like everyone else. Luckily, weare starting out with a reasonable magnet cost. HMOs and PPOsare bargaining hard. They are in the door every day trying toget us to chop prices," Smock said.

IMA prefers to line up as many as 100 referring physiciansat once through a discounted managed care contract. These negotiatedvolume rates can be about two-thirds of the standard exam charge.Although competing for low-cost MRI services is tough, this competitionplays to IMA's low-field, low-cost strategy, he said.

High-field MRI systems have their uses, Smock acknowledged.They are superior for many neurological applications. But brainscans make up only about 10% of IMA's overall imaging business.Most of the center procedures involve spine and extremity imaging,he said.