Healthcare providers used to be in an arms race of sorts, dashing to nab the latest MRI or CT scanning technology before their competitors. Although expensive, top-of-the-line scanners can cost about $2 million, medical imaging is a high-margin business and the providers believed those with the best tools and hottest technology would bring in more patients.
For a while, the medical imaging industry was resistant to economic downturns. As recently as last July, Cleveland research firm The Freedonia Group predicted 6 percent annual increases in U.S. demand for imaging products through 2010.
For now, though, it looks like the party might be over.
“I think in this current economy, all the rules of a recession-proof industry are kind of out,” Philips Imaging Systems Group vice president Richard Fabian told the The Business Review of Albany, adding that the imaging market declined in 2008.
“This the first time I can remember that happening in the 12 years I’ve been in the industry,” he told the newspaper.
It hasn’t helped that the 2007 Deficit Reduction Act reduced Medicare reimbursement rates for imaging procedures.
That’s forcing healthcare providers to pool their resources as hospitals nationwide trim their capital budgets and more patients opt out of non-emergency surgeries.
For example, http://optinghealth.com/, which runs Albany Memorial, Samaritan and Sunnyview Rehabilitation hospitals, is talking with St. Peter’s Hospital in Albany and Troy-based Seton Health about sharing the cost of new scanning devices, according to the business journal.
Fabian predicted tough times for most of 2009, but said he expects the industry to rebound late in the year as providers look to catch up on the purchases they’re putting off now.
“If they don’t invest at the end of ’09, they will be at a competitive disadvantage when the economy rebounds, which is expected in mid- to late 2010,” he told the newspaper. “You don’t just order an MRI and have it delivered the next day. Each is custom-built for the individual hospital.”