Pay-as-you-go radiology looms as vendors consider new models

January 31, 2001

Convincing buyers to invest huge amounts of money in new equipment, especially if the technology is designed around a new idea or intended to change the practice of medicine, is one of the biggest challenges manufacturers face. Giving it away is not an

Convincing buyers to invest huge amounts of money in new equipment, especially if the technology is designed around a new idea or intended to change the practice of medicine, is one of the biggest challenges manufacturers face. Giving it away is not an obvious answer, but it's one approach to that challenge.

In scattered corners of the radiology industry, vendors are kicking around exactly that idea. One of these is Wuestec, maker of a digital radiography system based on charge-coupled devices. The system retails for around $200,000, but customers can get it for nothing. Wuestec will configure it as a wall-mount, table, or chest unit; bundle it with an acquisition workstation, diagnostic workstation, and PACS software; and ship, install, and support itÑall for free.

There is only one catch. Wuestec wants to be paid for each picture taken. The cost, according to Eric Lazo, vice president of sales and marketing for Wuestec, would be around $3. But that's not bad, not bad at all, he declared.

"When you consider that the average hospital spends $5 to $6 on film, chemicals, labor, and storage for every image, they save money immediately," Lazo said.

Wuestec is not the lone believer in this unconventional approach. Cedara Software, a developer and OEM supplier of advanced software solutions, is considering a variation on this theme. Company executives are studying the development of a computing engine that could power super premium multislice CT scanners due to arrive in the next three to five years. This engine could generate 3-D images almost as fast as the data come off the gantry. But executives are worried that customers might not see the value of having these data presented as a volume. Their solution is to give the customer the power of choice on a moment-to-moment basis.

"If you need to use the 3-D reconstruction tool set, horsepower will be there, but you don't get it until you push the button to gain access," said Dave Armour, business development director at Cedara. "And when you hit the button, the meter starts running."

Armour likens the idea to making long-distance phone calls. The user chooses to make a call and is charged only for the call made.

That idea is similar to Wuestec's, although each plan being hatched by Wuestec and Cedara has its own subtleties and vagaries. Wuestec would price its services on a formula that considers use per month, how much equipment needs to be installed, and the length of the contract. The final arbiter of price, however, would be what the customer can comfortably afford.

"We want to deliver DR to the masses," Lazo said.

Cedara has not reached that level of detail or populist fervor, probably because issues facing the OEM supplier are more complex. Cedara would have to provide the computing engine as a component onboard a CT scanner, not as a turnkey product. Conceivably, the buyer of the scanner would reap some financial benefit by saving tens of thousands of dollars on the overall cost of the system. The OEM might benefit by avoiding the cost of developing or buying a high-performance computer to handle the load of data coming off the scanner.

But how to split the revenue derived from pushing the 3-D button could be tricky. Cedara would have developed the computing engine, but the vendor handled the integration and marketing. Training could be a problem, as well, as interpreters would need to get acquainted with the most effective ways to use 3-D images under different conditions, raising the question of who foots that bill.

Regardless of the challenges, there is no denying the appeal of free capital equipment. And with managed care and third-party payers putting the squeeze on providers, that appeal can only get stronger.