I S S U E - DOTmed.com

Many manufacturers
and end users of MRIs
have been on a conveyer
belt of reduced
profitability for a few
years now as a result of the Deficit Reduction
Act (DRA) and ongoing economic
instability. National MRI sales have plummeted
this year and more reimbursement
cuts could be in store, keeping widespread
capital budgets on ice, but not all is doom
and gloom. MRI is still a leading source
of revenue in hospitals and imaging centers
across the country, advanced 3T systems
and niche technologies like open
and upright MRI scanners are continuing
to sell and the independent service business
is holding strong. Growing trends
like non-contrast imaging, MR scanning
for dementia, and intraoperative and interventional
MRI are emerging applications
worth getting excited about.
Stark statistics for
manufacturers
NEMA, the association for electrical
and medical imaging manufacturers,
reports periodic sales statistics to its
members. The association reported that
the MRI market as a whole declined by
9% last year, says Joel Urick, MR product
manager for Toshiba.
That statistic is mild compared to
year-to-date market numbers. NEMA
reported that through the second quarter
2009, the overall MRI market was down
40%, says Stephen Mitchell, senior director
of Philips’ MR Imaging Systems.
“The biggest factor has been the
economic crash of late 2008,” says
Mitchell. “That has basically put a lot of
imaging projects on hold.”
“In 2003, MRI sales were approaching
1,200 units a year,” says Hitachi Medical
Systems’ vice president and general
manager of MR and CT, Sheldon Schaffer.
“In 2009, the best estimate in annual
sales from a unit volume perspective will
probably be around 700 MRI units. There
has been a significant decline.”
In addition to the economy, the
DRA’s impact on the imaging industry
has been far and wide, but the freestanding
MRI industry has been hit especially
hard. The intent of the DRA imaging cuts
were to slow the rapid growth of Centers
for Medicare and Medicaid (CMS) bill-
ing for imaging services coming from
practicing physicians and freestanding
imaging in the early 2000s.
“You saw a great increase in billing
in the years 2000 to 2006,” says Cynthia
Moran, assistant executive director
for the American College of Radiology
(ACR) Government Relations and Economic
Policy Department. “Imaging
services were the fastest growing component
of Medicare spending at that
time, but since the DRA, this growth
rate has flattened out.”
The DRA led to cuts in the Medicare
Physician Fee Schedule (MPFS)
and Hospital Outpatient Prospective
Payment System (HOPPS), which had
the effect of slashing reimbursement for
MRI procedures anywhere from 20% to
30%, and perhaps even 40%, some analysts
say. “That is not an unreasonable
estimate,” says Moran.
The Medicare Payment Advisory
Commission (MedPAC) has now advised
CMS to increase the imaging
industry’s utilization rate from 50% to
90%. If passed, the new relative value
formula would effectively act as an additional
cut in reimbursement, but some
think that this modality may be spared,
because “the DRA has already taken
such a bite out of MRI,” says Moran.
Established in 1981, the Center for
Diagnostic Imaging (CDI) was one of the
first freestanding imaging centers in the
country and is now a network of providers
practicing in 50 imaging centers nationwide.
CEO, Bob Baumgartner, says
that MRI is still the primary revenue provider
for the network. Not only have the
economy and reimbursement cuts had an
impact, but the credit crisis has affected
the viability of the MRI industry.
“The credit crisis has made it difficult
for imaging providers to sell their
practices or finance acquisitions,” says
Baumgartner. From the patient perspective,
Baumgartner is also seeing higher
deductible co-pays and more patients
delaying services, especially for discretionary
musculoskeletal imaging, such as
MRI scans for generalized back pain.
Optimism prevails for some
hospitals
Clinical Radiologists, S.C., is a large radiology
group headquartered in Spring-
field, Ill. Dr. Craig Russo is vice chairman
of radiology at Memorial Medical
Center, the largest hospital within the
group, which includes more than 50 radiologists
and operates in 20 hospitals and
over 30 outpatient and stand-alone clinics
throughout the Midwest. The group
interprets exams from over 30 MRI scanners,
with the majority of them being GE
and Siemens 1.5T systems.
Unlike some other communities,
Springfield has a thriving medical community
and the economic downturn
and threat of health care reform have
not dampened their technological investment.
“The hospitals here have
been investing quite vigorously in MRI
lately,” says Dr. Russo. “This is a fairly
small community, maybe about 120,000
people - and in the last year we’ve gone
from one 3T magnet to three…This hospital
and this administration in particular,
have looked at it from the standpoint
that now is the time to make the investment
in order to be very well equipped
in the near term as well as long-term.”
One service location recently invested
in the Siemens MAGNETOM Verio
3T. “Clearly, the patient experiences less
claustrophobia and technologically, it’s a
very advanced system,” says Dr. Russo.
“We don’t have to make any sacrifices in
terms of image quality.”
Fonar Upright ® Multi-Position MRI
DOTmedbusiness news I s e p t e m b e r 2009 21