Medical imaging scanner vendors have toughened their price competitionin the equipment service business over the past three years. Equipmentcompanies have given local service managers greater autonomy inpricing to compete with independent service
Medical imaging scanner vendors have toughened their price competitionin the equipment service business over the past three years. Equipmentcompanies have given local service managers greater autonomy inpricing to compete with independent service organizations, saidA. Ray Dalton, president of National Medical Diagnostics (NationalMD).
"It is the case with most major OEMs that (the degreeof service price competition) depends on the district or zonemanager. If they want to take a predatory approach in competing,they are given a lot of latitude (from headquarters)," Daltontold SCAN.
The Cleveland-based ISO recently bid against a major scannervendor on a service project and saw the vendor drop its price$400,000 from the previous year's level, Dalton said.
National MD doesn't always compete against the equipment companies.The ISO's service strategy is to offer hospitals package dealson all their imaging equipment (SCAN 2/27/91). The firm's goalis to service scanners manufactured by all vendors, but if itcan't--or if it needs access to proprietary service software--thesmaller company will subcontract work to the equipment vendor,he said.
This packaged-service concept gives National MD an advantageover ISOs that specialize in one or two vendors' equipment. Sincea single price is offered the hospital for all imaging servicework, it is harder for a particular scanner company to competewith a low bid on just its own equipment, Dalton said.
"They (the scanner vendors) can't work on their competitors'products, but we can. We are not limited to a single product line,"he said.
SCANNER VENDORS DO HAVE an advantage, however, when it comes tofinancing the development of advanced software service programs,he said. ISOs should work more closely in sharing the cost ofdeveloping alternative technology, Dalton said.
"I would like to see a cooperative effort between thelarger ISOs in developing software," he said.
ISOs do have a mutual lobbying organization, the Associationof Independent Medical Service Companies (AIMS), but this grouphas not tried to stimulate joint development efforts. "Iwould like to see them (AIMS) become more active in cooperativeventures, such as software design and development. This is importantin helping ISOs to continue to grow," Dalton said.
National MD has developed its own service business througha combination of internal growth and acquisitions. The firm completedeight acquisitions over the past four years. The latest and largestpurchase was Southwest Radiographics of Albuquerque, acquiredlast June. That company doubled National MD's combined annualdistribution and service revenues to about $38 million, he said.
Southwest's biggest advantage was its substantial service businessin the Denver area, which was already a large base for NationalMD. The firm also offered a smaller amount of service work inNew Mexico and Texas, he said.
National MD increased its Denver service business again lastmonth by winning two independent hospital service jobs worth atotal of $600,000 in additional annual revenue. The contractshave not been finalized on these service agreements, Dalton said.
The self-referral bill was scheduled for review by the Assembly'sHealth Committee in April, but the hearing did not take placeas planned, said Joseph M. Thompson, AIA executive vice president.No further action on the legislation is expected at this time,he said.
"AIA is strongly opposed to this broad proposal,"the organization said in written testimony presented to membersof the Health Committee prior to the scheduled hearing. "Enactmentof this law could result in the closure of a substantial numberof high-quality, cost-efficient freestanding and hospital-affiliatedjoint ventures in California, including an estimated 150 diagnosticimaging centers in the state."