Just days after introducing its new entry-level CT scanner, Somatom Smile, Siemens Medical Systems sold three units. Remarkably, the new product was bought-in fact, can only be bought-over the Internet. Traditional sales would be too costly.The
Just days after introducing its new entry-level CT scanner, Somatom Smile, Siemens Medical Systems sold three units. Remarkably, the new product was bought-in fact, can only be bought-over the Internet. Traditional sales would be too costly.
The single-slice scanner goes for under a quarter-million dollars, a price more often seen in ultrasound than CT. With Siemens and the industry moving rapidly toward multislice scanners, single-slice products are taking a back seat. But they still have a place in the diagnostic equipment lineup. And, when priced right, they represent an opportunity for sales in virgin territory.
Targets for the Somatom Smile are mostly those who have until now been locked out of CT by high prices. These include physicians in private practice and hospital departments other than radiology, such as ICU, ER, or ear, nose, and throat (ENT). At least a few units will be sold to radiology departments that want to handle routine cases with single- rather than multislice scanners.
"The return on investment with this scanner can be very high," said John Sandstrom, division manager of Siemens CT.
Breakeven on the unit is about one patient per day, according to Siemens CT product manager Sabine Duffy.
"If you don't have a patient a day, you have a different problem," she said.
Performance is at the very low end of the spectrum. The gantry rotates once every two seconds. Maximum scan time is 36 seconds. An 18-kW generator powers the system.
Smile's design is very simple, as well, which has the advantage of making service relatively inexpensive. The German company designed Smile as a modular system composed of 15 parts. The color- and number-coded components, which include computer boards and even the x-ray tube, are easy to swap out, allowing owners to service the product themselves.
"A private practice or specialty department can save the cost of a service contract because they can service it themselves," Duffy said. "It is a plug-and-play system, which means you just take one module out and plug in a new one."
A "do-it-yourself" CD-ROM provides step-by-step instructions for replacing modules, reducing the time and expense of having service technicians visit the site. And Smile lets its owners know when it needs to be serviced. The scanner automatically runs diagnostics to ensure proper function, flagging needed repairs and ordering replacement parts online.
With margins so tight, Smile could turn a profit only with a no-frills sales approach. The Internet fits the bill for keeping costs down, so Smile has been built to fit the Internet.
"Smile is so simple you can provide all the information over the Internet," Duffy said.
Over the Internet, Siemens can simultaneously address customers both in and outside of the U.S. The process is straightforward: log on to www.siemensmedical.com and register by answering questions about perceived imaging needs. Confirmed orders are followed by an invoice and system shipment.
The Cleveland Clinic Foundation was the first to make such an online transaction, ordering three units by accessing Siemens' new Web site from the company's booth at the RSNA show. The systems will be installed in the Clinic's ICU and ENT areas. Routine deliveries of Smile are scheduled to begin next summer.
Sales of Smile over the Internet exemplify the goals of Siemens e.health program, which is designed to help customers solve challenges including cost containment, patient information management and quality of care issues. The company's new Web site will serve as the vehicle for meeting these challenges. It will offer customers new ways to purchase equipment and supplies, as in the case of the Smile CT. It will also provide remote equipment management, online training and consulting, and solutions for managing patient information.
"Approximately 75% of all physicians are Internet-connected today, up from a mere 20% in 1997," said Erich Reinhardt, president and CEO of Siemens Medical Engineering. "Web-based technologies are spawning entirely new business models that go far beyond online buying forums, and it only makes sense for us to leverage our experience and technological expertise to help the healtcare industry adapt."