Smart Buying

Price, performance, and ease of use are just a few of the factors you need to consider when purchasing an MRI unit. Experts say successful buying begins with a strategic planning and purchasing process.

As the need for magnetic resonance imaging (MRI) continues to grow, increasingly more medical facilities seek to obtain a unit. But with a price tag of well over 1 million dollars, the acquisition of an MRI machine is a hefty decision for any medical facility large or small. Many factors go into the decision to lease or purchase; factors one might not ordinarily anticipate. What are these factors, and what makes for an intelligent, efficient decision-making process? To help us find the answers, Medical Imaging asked three professionals; one from a small radiology group, one from a midsized facility, and one from a large institution.

According to Sana Khan, MD, PhD, radiologist/neurophysiologist and chairman of TrueMRI in Anaheim, Calif, “It is extremely rare that a small company or hospital will pay $1 to $1.5 million cash to buy an MRI machine. There are tax advantages to leasing machines. Lease payments are tax deductible, and there are also advantages in preserving the cash to then build the business. Therefore, all of our machines are leased.”

Other factors come into play, including how to gain the competitive advantage by finding a particular competitive niche. “There are more than a hundred regular MRIs in the greater Los Angeles area and 20 scanners within a 5-mile radius of our facility,” Khan said. “TrueMRI wanted to differentiate itself from the exceedingly competitive regular MRI space. So we almost exclusively utilize the Fonar Upright MRI.”

The Fonar unit has some unique advantages over regular equipment. “The Upright MRI allows us to scan patients in multiposition planes rather than lying down, so we can image them in symptom-specific positions. This capacity means that TrueMRI attracts business from other centers, especially overweight people or those that are claustrophobic,” Khan said.

On the other hand, many facilities, especially larger ones, choose to purchase their MRIs. Kirby Souther, RT, (R) (MR) (CT), lead technologist of Seattle Radiologists Inc, purchased three GE units. “We were looking for high field strength,” Souther said. “We evaluated three different vendors—Philips, GE, and Siemens. We found GE produced superior image quality.” Additionally, Souther said the GE units were easier to use.

Souther also pointed out another factor in MRI installation. “The MRI room is a big investment in itself,” he said. Due to special conditions created by such a large magnet, “the construction of the room is almost as expensive as the MRI machine. So this should be factored into the decision to buy.”

Pedro J. Diaz, PhD, vice chair, radiology imaging and informatics systems at The MetroHealth System, and assistant professor at Case Western Reserve University, a large teaching facility in Cleveland, chose to purchase a Philips system. “We were attracted to the simplicity of use and installation ease of Philips units,” Diaz said. He also addressed another issue that is frequently mentioned by purchasers. “We also liked the ability to easily upgrade the Philips installations.”

When planning an MRI purchase, facilities must factor in everything from the construction of the room to ease-of-use to the ability to upgrade.

“In general, our tax-exempt, nonprofit status and cash flow/working capital model makes leasing a less attractive option for us than it would be for, say, a private, for-profit imaging center,” Diaz said. “In addition, the upgradeability of the Achieva XR from 1.5T to 3T extends its life beyond that of a regular MRI system, making leasing less attractive.”

Larger facilities have more to be concerned about. “We looked at all vendors and purchased through our capital budget,” Diaz said. “Government involvement is a big part of it. Price is a big part of it as well. In the end, we looked for a combination of price and performance. Although the price can go up to 2 million, we aggressively looked at all our options. A big advantage is that Philips gave us a turnkey package. They just had the biggest footprint.”

Souther said the process should begin with a needs assessment. “What are your needs? The needs of referring physicians are the most important aspect,” Souther said. “Go with the specific needs whether they be orthopedic coils, shoulder coils, or foot coils; the specific coils relative to the competition are what you should be concerned about. The same goes with the software.”

Lessons Learned

“We look at all the aspects and options to purchase an MRI unit,” Diaz explained. “We take a broad perspective, including range of service and breadth of applications.” As usual, other factors come into play. “The ease of upgrade to high-end spectroscopy was the deciding factor to buy Philips. We can easily swap and replace a 1.5T magnet with a 3T device. This is an important advantage, especially for a teaching facility.”

“The imaging business is getting tougher every day,” Khan said. “It is very competitive, and there are a lot of price pressures on the industry both Federally and state by state.”

If patient comfort is one of your key concerns, the Fonar Upright MRI lets you scan patients in multiposition planes rather than lying down.

According to Khan, the product you choose is only as good as your planning process. He advises MRI buyers to first carefully assess the location of their facility and their local market. The objective is to understand who the major players are and if contracts are still available in the area where you are planning to place the magnet.

It also is important to consider who is involved in the decision-making process. If it’s a fist-time purchase for your organization, you may want to form a buying committee or bring in a consultant with expertise in the MRI purchasing process.

“TrueMRI is a radiologist-owned company, so there were no consultants involved in the decision to acquire our equipment,” Kahn said. “All decisions were made by the three partners. There were no competitive bids since only Fonar can produce the Upright MRI.”

By contrast, the large MetroHealth facility at Case Western Reserve had to go through a very different path. “The radiology department executive staff, whose membership includes representatives from administration as well as the medical and bioscientific staff, was involved in the decision,” Diaz said.

Kahn cautions potential buyers about the persuasive practices of some salespeople. “Do not rely on the machine salesman’s math. It is too simplistic to say that here is the cost of the machine, these are the payments, and you need three patients a day to break even at Medicare rates. You must do a financial analysis yourself or hire a consultant who understands the details of running an MRI business.” While this is solid advice for any organization, it is particularly important for small facilities seeking a quantifiable return on investment within a measurable time frame.

On the issue of making the purchase decision for a large organization, Diaz gives specific advice. “Put a multidisciplinary review team together, with a single point-of-contact to coordinate the facility vendor communications, and apply multifactorial analysis to the decision-making process,” Diaz said. “Look at the entire feature set offered by the vendor as opposed to just heavily marketed and/or niche features. Make sure to take into account factors such as system upgradeability, installation, and service costs over the entire expected life cycle of the system.” In the end, Diaz says, “The pain of all the up-front work is worth it!”

---

James Markland is a contributing writer for Medical Imaging. For more information, contact .