Low-field MR taps high-field market

Upgrades to the Toshiba 0.064-tesla Access MRI system have improvedimage quality to the point where the system can compete head-to-headwith high-field scanners, according to Dr. Peter Rothschild, radiologistand director of Open MRI, a Hayward, CA, imaging center, whichopened in November.

Rothschild ought to know the competitive strengths of Access.He is also an adjunct assistant professor of radiology at theRadiologic Imaging Laboratory of the University of Californiaat San Francisco. RIL functions as the prime R&D facilityfor Toshiba America MRI of South San Francisco.

The radiologist had confidence enough in the state of thislow-field MRI system to invest his own money in an Access-onlycenter operating in the middle of an overwhelmingly high-field-orientedSan Francisco Bay Area imaging market.

"I didn't put one in until it (Access) was ready,"Rothschild told SCAN. "I took my own money to do this. Wehave no referring doctors in our center. That tells you my commitmentto this product."

The open design of Access' permanent magnet and its low fieldstrength provide competitive features not offered by high-fieldsystems. For instance, it is possible to place metal equipmentclose to the magnet in order to monitor anesthetized patients.There have been some instances of patients who have died whileunder sedation for an MRI procedure, he noted.

Open MRI caters particularly to the niche imaging needs ofclaustrophobic or very large patients. But the center will onlyreceive repeat referrals if it provides doctors with images thatare of competitive quality with high-field alternatives, Rothschildsaid.

"They (referring doctors) may send us one patient, butif our images come back looking bad, they will not send us anymore. Claustrophobics can go to other places in the Bay Area andbe sedated. Image quality is what sells the magnet," he said.

The Access magnet was modified last year in a way that decreaseseddy currents substantially, leading to improvements in imagequality, he said. Toshiba has also upgraded system software toimprove the performance of Access relative to mid- and high-fieldunits.

"There are 85 magnets in the Bay Area," Rothschildsaid. "Up to now, everybody has been hesitant to competeagainst those magnets (with the low-field Access). We are in herefighting now, and I think our images are very competitive withhigh field."

Open MRI has another weapon in its competition with high-fieldimagers--and a potentially rewarding side business. The companyhas developed a software package in conjunction with a Swedishpartner that subtracts noise from MRI images. The Image EnhancementSystem, which runs on a Sun Microsystems workstation, can improvelow- and mid-field images, he said.

"It (IES) brings you up a notch. It will make mid-fieldimages look like high-field, and low-field images look like mid-field,"Rothschild said.

Open MRI created a division to sell IES and is marketing theprogram. The software product has been installed in its firstcustomer site, he said.

BRIEFLY NOTED:

• MedInc of Nashville changed its name last month to ImageAmerica.This name change reflects the imaging center firm's move awayfrom managing physician-owned facilities and into the acquisitionof 100% center ownership, according to Patrick Ryan, presidentand CEO.

Following shortly after the name change, ImageAmerica purchasedtwo imaging centers in Denver and Baton Rouge and bought out limitedpartners in five existing centers in Tennessee, Alabama, Louisianaand South Carolina.

Federal safe harbor regulations restricting referring physicianownership of medical centers--plus the profitability of the fiveongoing centers--made the buyout attractive to both the companyand limited partners, Ryan said.

• American Shared Hospital Systems of San Francisco is pullingout from under its large debt. The imaging services firm has alsostarted to see benefits from the strengthening of its MRI businessand trimming of less profitable operations in ultrasound, nuclearmedicine and CT, according to Dr. Ernest A. Bates, chairman andCEO.

ASHS registered a gain on early extinguishment of indebtednessamounting to $1.96 million in 1991 (end-December), which madeup virtually all of the firm's net income of $1.99 million forthe year. This was a substantial improvement over a loss of $3.6million in 1990. Revenues were down 3% last year from $62 millionin 1990 to $60 million (see graph).

• Imaging center firm Health Images of Atlanta made itssecond MRI center acquisition last month and also opened its secondMRI site in Great Britain. Health Images will run its own MRIscanner, the HI Standard, in both Magnetic Imaging of Belleville,IL, and Darlington Magnetic Imaging of Darlington, England.

Health Images now operates 32 U.S. and two U.K. MRI centers.Acquisition of the U.S. facility is part of HI's drive to takeadvantage of government restrictions on referring-physician ownershipof medical centers.

"As we gain experience in acquisitions, we expect thispace to increase," said Robert D. Carl, president and CEO."We believe Health Images' strong cash position will allowus to fuel our company's growth through center acquisitions asmergers and consolidations occur in the outpatient diagnosticimaging industry."