Refurbished equipment market grows in importance

August 16, 2000

GE Medical Systems recently announced that it had purchased the world’s largest purveyor of used diagnostic imaging equipment.GE will take over Access Medical, which has sold thousands of used diagnostic imaging systems across the U.S. The

GE Medical Systems recently announced that it had purchased the world’s largest purveyor of used diagnostic imaging equipment.

GE will take over Access Medical, which has sold thousands of used diagnostic imaging systems across the U.S. The company’s hardware offerings will be added to GE’s Gold Seal Direct Web site, where the company already lists its own used ultrasound, CT, MRI, nuclear medicine, mammography, and x-ray equipment for sale. Access Medical’s unique contribution will be its multivendor equipment, an area in which GE has not been involved.

Hospitals, imaging centers, and radiology groups will be able to buy products and supplies via links from the Gold Seal Direct Web site beginning in September, according to Anna Schneider, Gold Seal general manager.

“Goldsealdirect.com will have three offerings—warranted diagnostic imaging equipment, Gold Seal Exchange for multivendor equipment, and Gold Seal Services,” she said.

In keeping with GE Medical’s drive to make its own business—as well as the healthcare industry—more efficient, all products and services will be offered through the Internet on goldsealdirect.com, Schneider said.

“We’ve been selling used equipment since 1994 in the U.S.,” she said. “And we expanded in 1996 and 1997 to other countries. It’s grown dramatically the past three years.”

The market for used radiology equipment is growing for several reasons, companies point out. Used products are often more attractive for smaller community hospitals and private practices that don’t have the capital for purchase of new machines.

“Evolving technology is largely software-driven,” Schneider said. “Customers purchasing new equipment are interested in upgrading more frequently. Even in the area of hardware, magnets can be upgraded.”

“It’s like buying a newer used car, but one that’s still in great shape,” said Shaun Seery, Siemens’ director of channel development for e-health business. “But the challenge is how to do this without cannibalizing traditional sales. If you have a new product in the marketplace, you don’t want to put a used product (on the Web) which doesn’t have much margin.”

In other words, the used product sold over the Web could undercut sales of the new product and simultaneously undercut the efforts of the traditional sales force. Siemens is looking at a number of “pilots” for selling used equipment over the Web.

Seery said Siemens’ larger markets for used equipment are outside the U.S.

For start-up services such as a new cardiac catheterization lab, buying used equipment makes economic sense.

“Many hospitals starting services are buying refurbished equipment to save money when they have low patient loads,” said Alicia Karabinos, director of e-business development for Philips Medical Systems North America. “Then they are buying new equipment as business picks up.”

Marconi Medical Systems is moving a large volume of commodity items, such as chemicals and x-ray film, via an “e-catalog” it has established through a new Web site (see related story, this issue). But, like GE and the others, Marconi has found it cannot effectively sell big-ticket capital equipment such as MR and CT scanners over the Web.

“There are simply too many people involved, and the due-diligence process does not transfer easily to the Web,” said Mark Dalen, Marconi’s vice president for e-business.

GE’s Schneider added, “I think (GE’s) Web site and the World Wide Web is what is going to take this business from the mundane and low-key to the forefront for hospitals and institutions to learn more and make better decisions, here in the U.S. and globally.”