Falling U.S. demand for CT opens door for bargain hunters

Some of the best deals in medical imaging today can be found in the CT market. Vendors are desperate for your business.

Deteriorating market conditions last year turned the clock back six years for vendors on the revenues they took in for new CT sales in the U.S. And the market is getting worse. The top CT executive from Toshiba America Medical Systems predicts that industry-wide revenues this year will fall to about $800 million dollars, a level not seen in a decade.

The global economic crisis, shaped in the medical community by tight credit and falling endowments, has turned the financial spigots tight for many facilities that might otherwise have bought medical equipment. CT bore the brunt of the impact because of its special vulnerability.

By last year, the bloom had long been off 64-slice CT scanners, as most facilities that needed one had one. The next generation of superpremium systems, with up to 320 channels, came into the marketplace with $2 million price tags-well beyond the reach of most facilities, especially outpatient clinics, which had taken a walloping from the Deficit Reduction Act and other federal efforts to cut back reimbursements.

Last year, CT makers shipped less than $1.2 billion worth of new CT scanners to U.S. customers, about $300 million less than the year before and well under the high-water mark of $1.75 billion set in 2006.

The bad news for the makers of CTs, however, could be good news for buyers. Prices for CTs are softening, as vendors try to shore up sales in what could be an even worse year than last.

Deals may be easiest to find in the hardest hit area, the class of CTs using between 32 and 64 channels. But some newer technologies may offer hard-to-resist deals as well. With a finger on the slowing pulse of the marketplace, major vendors have designed brand new scanners that fill the gap between their 64-channel systems and ones offering 256 or 320. Adding to the appeal of these scanners is their ability to upgrade to superpremium status in the field. One such scanner is Toshiba's Aquilion Premium, a 160-detector row scanner that can be upgraded to the company's 320-channel Aquilion One.

“You really have to listen to the people out there and try to tailor a solution that allows them to get the equipment they need,” said Doug Ryan, senior director of the CT business unit of Toshiba America Medical Systems.

Vendors are also engineering systems that address specific issues in CT. One issue of special concern is patient radiation dose. Some vendors have integrated dose-saving technologies that can cut dose by 50% into new products, such as those built into GE's Discovery CT750. Siemens designed its newly released Somatom Definition Flash to generate high-quality images at minimal dose while providing the option of dual-energy scanning. The company claims its Flash can cover the entire thorax in less than a second and scan the heart at submilliSievert dosage.

“We have to develop new technologies that make a difference for the patient,” said Andre Hartung, vice president of CT marketing for Siemens Healthcare. “Therefore, it is not a specification race but a race to improve clinical performance.”

Vendors are grooming their portfolios for the day when demand returns. That day may not be too far away. Hartung expects the market to bottom out by the end of this year and then stay flat in 2010. Soon after, he expects demand to pick up.

“There will be a lot of older scanners that need to be renewed to maintain their clinical capabilities and to get the advantage of innovations that we have introduced in CT,” he said. “At this point, people will start to invest.”

In the meantime, vendors who need a CT scanner and can come up with the money to buy one will be in a better position to negotiate than many can remember.