Used Medical Sales in Peril?

Used Medical Sales in Peril?

by Barbara Kram, Editor | April 26, 2006
Don Bogutski, president,
Diagnostix Plus Inc.

As a founding member and past president of the used medical equipment industry trade association, IAMERS, as well as the president of Diagnostix Plus Inc., you'd think that Don Bogutski would be quite content. But he's not. Bogutski is worried about the big picture--the threats from domestic-U.S. and global market forces that he sees challenging the very existence of the used medical equipment industry.

"I believe that the used or preowned diagnostic imaging equipment market (his area of expertise) is in jeopardy of being torn apart and put to rest by huge forces that are coming together like the perfect storm," Bogutski told DOTmed News.

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The way he sees it, the industry is maturing -- but not in a way that will promote its long-term success. On the contrary, Bogutski is concerned about such issues as the power of the OEMs, the eroding position of third party service providers, tightening WTO regulations, and unforgiving insurance reimbursement mandates.

Bogutski sees a "perfect storm" of factors
threatening to come together and overwhelm
the used medical equipment industry.

The large diagnostic equipment OEMs may use their considerable sales and marketing clout to squeeze the used medical equipment dealers. "[The OEMs] are seeing that if they get in there and wield the same tools they use when competing against one another to sell new equipment [they can] put those tools to work to clobber many players in the used medical equipment industry," he said. "Once the OEMs have a toehold, then when it's time to trade up to new equipment, they'll get the new equipment sale." He also sees the OEMs as looking to gain more control over the remarketing of used equipment.

There's also good money to be made in servicing high-tech imaging equipment. And Bogutski sees the OEMs seeking to keep a bigger slice of that pie, too. "It's well known that third party or Independent Service Providers can service a system at a much lower cost than the OEMs do. However, if the OEMs are imbedding software into their systems that prevents access without the proper `key code' that renews annually...the third party guy who was going to save you money can't service your equipment." Access to some machines also can require special proprietary tools.

Regarding the global market, Bogutski identified a very real threat that "The WTO is being pushed by lobbyists [for OEMs] to homogenize the world market." His concern is that WTO members may one day be subject to strict rules or a complete ban on the sale of used medical equipment.