November 2000

Acuson’s Aspen is at the mid-range of its product line, which would enhance Siemens’ offerings.

According to the pact, Siemens will make a cash tender offer for all outstanding shares of Acuson for $23 per share. That amount was more than 1.5 times the value of Acuson stock, which closed at $14.69 per share the day before the deal was announced.

“We believe that the merger of our two companies creates the largest and the best ultrasound company in the world,” said Samuel Maslak, chairman and CEO of Acuson. “Customers will benefit from more R&D, better distribution and service, and better connectivity solutions.”

Acuson has posted sluggish financial results this year, but still holds a strong reputation for its ultrasound product line.

Acuson blamed price erosion in the domestic cardiology market and the stronger dollar abroad for the adverse effects in its mid-year financial report. For the six-month period, revenues dipped to $231.4 million, compared with $238.9 million in the first half of 1999. Net income declined to $3.3 million, down from $10.3 million in the year-ago period.

Acuson began the year by completing its acquisition of Ecton Inc. (Plymouth Meeting, Pa.), which brought a low-end, portable, all-digital phased array echocardiography platform to Acuson. In March, Acuson President Daniel R. Dugan resigned as president and COO.

Siemens would receive a good share of the ultrasound market with the acquisition of Acuson and enhance its reputation in the business, much the same way GE Medical Systems (GEMS of Waukesha, Wis.) did when it acquired Diasonics Vingmed Ultrasound Ltd. (Haifa, Israel) in 1998 and Royal Philips Electronics (Amsterdam) purchased ATL Ultrasound Inc. (Bothell, Wash.) that same year.

According to Klein Biomedical Consultants (New York), Acuson held the No. 2 market share spot in ultrasound in 1998. Agilent Technologies Inc.’s Healthcare Solutions Group (Andover, Mass.) held the top spot.

Siemens and Acuson officials said the combination creates minimal geographic overlap, because the majority of Acuson’s business is focused on the U.S. market, while much of Siemens’ business is outside the United States.

“Our market shares are very complementary,” said Maslak. “About 65 percent of the worldwide ultrasound market is outside the U.S. and 70 percent of Acuson’s revenues come from the U.S. Meanwhile, 60 percent of Siemens’ revenues come from outside the U.S.”

Siemens’ premium ultrasound
line includes the all-digital Sonoline Elegra.

Siemens plans to keep R&D operations at both Acuson’s Mountain View site and the R&D operations of Siemens Medical Systems Inc., Ultrasound Group (Issaquah, Wash.).

“The intent is to continue both product lines and integrate them in the future,” said John D. Pavlidis, president of Siemens’ ultrasound division. “The Siemens products don’t include cardiology applications, which is a great strength of the Acuson products. Siemens has the Sonoline product, a strong product that addresses a mid-price range, which is an area that Acuson has never been able to address, and, finally, Siemens has good high-end technology.”

The new corporate structure has not been determined, but Maslak said Acuson’s management would continue to be closely involved in the business. Reaction to the proposed acquisition was one of surprise, but not totally unexpected.

“It wasn’t a surprise that it could happen, but it was a surprise that it did happen when it happened,” said Ernie Andberg, an analyst with R.J. Steichen & Co. (Minneapolis), who tracks Acuson. Andberg said previous ultrasound consolidation moves made Acuson’s acquisition more likely, as it struggled to compete with larger companies.

Andberg added that the companies’ ultrasound product lines can remain separate for only so long before it makes sense to consolidate and use the best-of-breed. He speculated that Acuson products would be used at the top end with Siemens’ Sonoline in the middle tier. Acuson — through its January acquisition of Ecton — provides a platform that would fit well into the product mix.

Siemens placed a strong emphasis on IT and networking advantages it will have with new PACS products from Acuson combined with its acquisition of Shared Medical Systems (Malvern, Pa.) earlier this year.

Siemens was expected to complete its tender offer for Acuson stock by late October or early November. Maslak owns approximately 1.5 million shares of Acuson stock, while board member Karl H. Johannsmeier owns more than 5 million shares, giving the two men more than 30 percent ownership in the company. Acuson is 39 percent insider-owned, while 53 percent of the company is held by institutional investors.

Following the consummation of the tender offer, Siemens will acquire the remaining shares of Acuson at $23 per share through a merger of a wholly owned Siemens acquisition subsidiary into Acuson.

On Oct. 10, ADAC agreed to sell HCIS’ Cardiology Systems Group (CSG) to Camtronics Medical Systems (Hartland, Wis.) for an undisclosed amount. Exactly two weeks later, ADAC agreed to sell the rest of HCIS to Cerner Corp. (Kansas City, Mo.) for $6 million in cash.

The Camtronics’ agreement could close as soon as December.

CSG is a small component of ADAC’s HCIS unit, accounting for less than 10 percent of HCIS’ revenues in FY99, ending Oct. 3. HCIS’ poor financial performance and a sluggish market for large-scale information systems are the main reasons why ADAC has put all of HCIS on the block.

“I believe the right partner may provide a tighter, more dedicated focus on the healthcare IT market that ADAC is not able to provide,” said ADAC Chairman and CEO R. Andrew Eckert. “This is a very positive step, as the cardiology business was not sufficiently related to our core focus on nuclear medicine. PET imaging and radiation therapy products merit further investment over the course of the next few quarters.”

CSG would appear to be a much more compatible fit for Camtronics, which has specialized in cardiology information management technology. In 1994, the company made its leap into cardiac information systems with its Archium digital cardiac system for cath lab image management.

Camtronics President Gene Bergholz estimated that between Archium and derivative products, the company has more than 250 systems installed in the United States.

“Our goal, even back in 1994, was to integrate cath imaging and all the information relevant to a cardiac patient’s treatment,” Bergholz said. “That would include echo imaging, nuclear medicine, cardiovascular MR, and non-imaging information, such as hemodynamic data, and procedure and patient report related information.”

Camtronics plans to integrate ADAC’s CorCAAT system — an advanced hemodynamic and database management system for catheterization labs — into its Vericis integrated cardiac repository. Vericis is an open-architecture information and image management system for cardiology.

Bergholz said Camtronics has no plans to move CSG or its employees from its base of operations in Orlando, Fla., “at least for the foreseeable future.”

ADAC warned investors to expect lower-than-anticipated revenues and earnings in the company’s fourth fiscal quarter, ending Oct. 1.

ADAC cited two reasons for its shortfall: the “ongoing poor performance” of HCIS and lower-than-planned shipments of its C-PET scanners.

ADAC anticipates the sale of CSG will result in a fourth-quarter charge of approximately $2 million. The company added that the potential sale of the rest of HCIS — which leaves radiology information systems (RIS) products — would result in an additional charge to its books.

Cerner officials declined to comment on the proposed acquisition, pending completion of the transaction. ADAC and Cerner expect to complete its transaction later this month.

One HCIS product that would join Cerner’s lineup is the QuadRIS.

Cerner designs, develops, markets, installs and supports information systems for healthcare providers.

In addition, Tyco International (Pembroke, Bermuda) received shareholder approval to acquire Mallinckrodt Inc. (St. Louis), and Jomed N.V. (Beringen, Switzerland) completed its merger of EndoSonics Corp. (Rancho Cordova, Calif.), a maker of intravascular ultrasound products.

Parent company Thermo Electron Corp. (Waltham, Mass.) placed Trex on the block in February. On Aug. 15, Hologic came out of the blue to announce a proposal to acquire Trex.

The acquisition includes all of Trex’s businesses and product lines, with the exception of the Trophy Radiologie (Vincennes Cedex, France) dental imaging subsidiary. Trex has 550 employees and facilities in Danbury and Littleton, Mass.

The Trex purchase gives Hologic new product offerings in the following areas: general radiography, mammography, nondestructive testing, mobile X-ray, cath lab equipment, breast biopsy, R/F and electrophysiology.

Hologic entered the digital radiography market last year with its purchase of Direct Radiography Corp. (Newark, Del.) from Sterling Diagnostic Imaging Inc. (Greenville, S.C.). Prior to that, Hologic focused solely on bone densitometry.

While Hologic hasn’t revealed which product lines will stay and which, if any, will go, the company did give an idea of its focus going forward.

“This acquisition solidifies our position as the leading X-ray manufacturer for women’s health,” said S. David Ellenbogen, Hologic’s chairman and CEO. “Our goal is to position the company to generate sales in excess of $200 million in calendar 2001 from bone densitometry, mammography, C-arm imaging and digital radiography.”

Tyco-Mallinckrodt
Mallinckrodt shareholders have approved the company’s $4.2 billion purchase by Tyco, originally announced in late June. Tyco is offering Mallinckrodt shareholders $47.50 in Tyco stock for each share of Mallinckrodt held.
The transaction remains subject to approvals from the U.S. Securities and Exchange Commission. The European Commission approved the acquisition saying the only overlap in the companies’ activities occurs in the field of medical devices, but their “overall market share does not raise any competition concerns.” Tyco also signed a deal to acquire InnerDyne Inc. (Sunnyvale, Calif.), a maker of minimally invasive surgical access products.

GE Medical-Micro Medical
GEMS’ purchase of Micro Medical was announced in August. The acquisition will come under the newly created GE Medical Systems Information Technologies (GEMSIT), which brings together six previously separate IT businesses acquired by GEMS.

“Our goal is to continue to grow our company’s cardiology business by providing technology — driven productivity solutions and clinical workflow services for cardiology departments,” said Greg Lucier, president and CEO of the new business unit. “The acquisition of Micro Medical supports the technology piece of the equation by joining together more than 150 people with proven cardiovascular information systems expertise.”

GEMSIT has been working with Micro Medical since 1998, when the companies jointly developed the Catalyst cardiovascular information system. Catalyst unites patient data, images, waveforms and descriptive text on a single screen to optimize clinicians’ review and reporting processes.

Jomed-Endosonics
In the Jomed-EndoSonics deal, Jomed purchased 16.5 million shares of EndoSonics common stock at $11 per share, making EndoSonics a wholly owned subsidiary of Jomed. As a result, any outstanding shares of EndoSonics stock not accepted for payment in Jomed’s tender offer would be converted into the right to receive $11 per share in cash.

On Sept. 22, Marconi announced that it sold the assets of its image-guided surgery business to Z-Kat Inc. (Hollywood, Fla.) for an undisclosed amount. A statement from Marconi said the sale “reflects the company’s focus on imaging and information systems with expanded clinical applications.”

Z-Kat develops software and robotic technologies that make less-invasive procedures possible. It is working toward building a suite of image-guided technologies for the operating room. Among its products are FluoroLab software and Fluorotactic technology. Included in the acquisition are the ViewPoint and Voyager products from Marconi used in placing surgical and orthopedic implants.

According to Marconi, “a number of Marconi employees will become Z-Kat employees, while the remaining employees will stay with Marconi.”

Zeiss in September exchanged its 20 percent ownership in Surgical Navigation Specialists Inc. (SNS of Mississauga, Ontario, Canada) for shares in SNS’ parent company, Cedara Software Corp. (Mississauga). The move comes on the heels of Cedara’s financial results for the fiscal year, which showed SNS to be a drain on Cedara’s resources as it experiences delays in getting a product to market. In the fiscal year, ending June 30, Cedara lost $4.5 million after reporting net income of more than $1 million in 1999.

“It is important to recognize that SNS has the support of the Surgical Navigation Network (SNN), a consortium of powerful surgical equipment makers,” said Michael Greenberg, chairman and CEO of Cedara, in the company’s FY2000 financial report, released Sept. 13.

SNS has provided software and integration services to Zeiss since 1998, while Zeiss has marketed SNN systems to surgeons under its own label. Under the new agreement, Zeiss will transfer back to SNS all marketing and sales duties for SNS products. Zeiss will remain an “applications member” of the SNN, providing microscope technology to the Network.

Terms of the agreement were not disclosed.

Kodak’s Health Imaging division is forming the business segment to grow its participation in the booming medical imaging-information field. PARIS combines CKI with Health Imaging’s PACS subsidiary, Cemax-Icon, into a single unit within Health Imaging’s existing framework of regional and functional organizations. CKI, a provider of digital radiology information systems, will remain in Iceland.

For the past seven years, Health Imaging has served as the exclusive distributor of CKI’s RIS 2010, an information system to electronically produce, route and maintain patient records, requests for procedures and other critical documents.

As part of the companies’ relationship, Kodak is integrating its PACS with the RIS 2010 to create image-information management systems for hospitals and other healthcare facilities. These efforts have been focused in Europe, but PARIS will concentrate on further expansion.   

According to Rick Cimino, chief marketing officer and vice president of Health Imaging, the company currently is in the process of defining the brand.

Cimino said although the acquisition is not a blockbuster in terms of size, its technical foundation is important because the product has the capability to look at equipment utilization and schedule imaging for patients, both of which can be done at the referring physician’s desk, if he or she has the necessary module. It also opens a multibillion-dollar marketplace for Kodak in information systems.

The colorful co-founder, chairman and CEO of medical products supplier PSS World Medical (PSS of Jacksonville, Fla.) in October announced he was stepping down to pursue other interests.

In 1983, Kelly co-founded medical products distributor Physician Sales and Service (Jacksonville) and grew the business through an aggressive acquisition plan and unique management style to a $1.8 billion company. In 1996, PSS acquired Diagnostic Imaging Inc. (DI of Jacksonville), which itself was created in 1996 through the merger of four local X-ray equipment and consumables distributors.

Since then, DI has used the backing of PSS to acquire other local and regional imaging products suppliers in its efforts to build an extensive distribution network.

Kelly’s unique management style focuses on hiring and promoting youthful employees with an intensive sales background that creates a trickle-down enthusiasm among all employees. His philosophy has been such a topic of interest that he wrote a book in 1998 titled Faster Company: Building the World’s Nuttiest, Turn-on-a-dime, Home-grown, Billion-dollar Business.

Things unraveled last year with slumping financial statements becoming a growing concern for Kelly and PSS. Early this year, the company began looking for an acquisition partner and in June signed a deal to be acquired by Fisher Scientific International (Hampton, N.H.), a supplier of laboratory and scientific supplies. The stock-for-stock transaction was valued at $840 million.

However, the Fisher deal collapsed in September when Fisher’s declining stock price changed the value of the deal for PSS shareholders. With the failed merger and more poor financials expected in the upcoming second quarter, Kelly decided to retire as chairman and CEO and pursue other interests.

For the six-month period ending Sept. 30, PSS posted sales of $915.1 million, compared with $888 million in the same period of FY2000. Net income decreased to $13.9 million, down from $31.4 million in the year-ago period.

PSS did not provide any information as to Kelly’s future plans. As of Dec. 13, 1999, he owned approximately 500,000 shares of PSS.

Former Executive Vice President David A. Smith will fill in as CEO.

The company also named Clark A. Johnson, former chairman and CEO of retail chain Pier 1 Imports Inc. (Fort Worth, Texas), as the chairman of the board.

Siemens in part blamed “adverse market conditions in 2000 resulting from the Balanced Budget Act, post Y2K slowdowns and other factors impacting the health industry” for its decision.

The company plans to reorganize SMS to target defined business segments, including application service provider (ASP) products and outsourcing business lines. Siemens is working with SMS to develop a “best practice integration initiative” to combine different types of medical information acquired across a hospital’s network.

“Our merger has afforded the opportunity to examine our structure and resources, refocus our goals and create a more effective, more responsive organization,” said Erich R. Reinhardt, president and CEO of Siemens Medical in a company statement.

The restructuring also will make SMS’s Malvern headquarters the worldwide base for Siemens Medical Engineering’s Healthcare IT business.

Francis W. Lavelle, president and CEO of SMS, said the 600 employees will be given severance packages and outplacement support from the company.

Lavelle took over as president and CEO when Marvin Caldwell resigned that post after the merger with Siemens was announced. Siemens has brought in several top managers to the SMS operations since the acquisition.

“We recognized that we needed to make tough business decisions in order to ensure our success and financial perfomance going forward,” Lavelle said. “A work force reduction is always difficult and we have notified impacted employees.”

The settlement establishes just less than $20 million worth of GE credit for customers enrolled in the lawsuit and sets conditions under which customers in the action and independent service organizations (ISOs) or non-GE manufacturers who work on those systems may license GE materials.

According to court documents, the lawsuit accused GE of “refusing to permit access by [ISOs] to GE’s copyrighted advanced diagnostic materials, which could be used to repair and maintain GE CT and MRI equipment.”

The suit also alleged GE unfairly imposed long-term service contracts and acquired its service competitors. Other accusations include GE maintaining licensing policies that prevented independent servicers from servicing GEMS’ CT and MRI equipment that the servicer did not own.

GE denied all allegations and asserted “that its policies represent the valid exercise of its intellectual property rights” and the plaintiffs cannot prove they were injured by the policies.

The case was filed in the U.S. District Court for the Southern District of Georgia in Brunswick, Ga., on behalf of the Southeast Georgia Regional Medical Center and other class members who purchased a GEMS CT or MRI scanner directly from the company and had service contracts executed or orders made between Aug. 1, 1992, and Aug. 14, 2000.

The settlement does not provide any cash to plaintiffs. Rather, those who join the suit will receive credit toward the purchase of imaging equipment or parts from GE. The settlement does clearly solidify GE’s policy of providing service materials to ISOs set forth in previous legal cases.

XRI President Richard Ernst said Andor’s owner was looking to grow the business, but lacked the resources.

“[Andor President] Manny Ehrlich was trying to grow the business, and he felt the best way to do that was by becoming part of our group,” added Ernst. “He decided a buyout would be in his best interest.”

Andor is a primary dealer for Shimadzu Medical Systems (Torrance, Calif.) equipment.

XRI is part of the XR Imaging Network, which includes other New England-based imaging sales and service businesses. Andor has six employees and will retain its corporate name and location on Long Island. It will operate as a subsidiary of XRI.

Biotel is a niche player in the CT contrast injection market, claiming the largest share of Australia’s injector market, according to Biotel. The company saw 40 percent growth in revenues last year.

Michael Howard, Medrad’s senior vice president, said Biotel reported more than $1 million in revenues in its last fiscal year. Virtually all of the company’s revenues came from business in Australia.

“Our main interest is a CT injector that is on its third generation that came out in 1993,” said Howard. “It was introduced in 1993 and now sells for about $5,500.”

Biotel has eight employees, all of whom will continue with Medrad. Biotel founder and CEO Rod Savage has signed a six-month employment contract with Medrad and will continue in an R&D role.

A 17-count indictment blames former HBOC co-presidents Albert J. Bergonzi and Jay P. Gilbertson for accounting discrepancies at the company, alleging securities fraud, conspiracy, mail and wire fraud.

HBOC was acquired by healthcare supply giant McKesson Corp. (San Francisco) in January 1999, creating the even bigger McKesson HBOC. In April 1999, the newly formed business revealed serious accounting discrepancies from HBOC that ignited a shareholder panic, causing the company to lose more than $9 billion in value in one day.

The indictment asserts that the pair inflated quarterly sales to the Securities and Exchange Commission (SEC), backdated contracts, falsely reported operating and expense outlays, and provided false records to independent auditors. According to Associated Press reports, the indictment alleges Gilberston illegally made $7 million by trading stocks he helped inflate, and earned more money through bonuses. Bergonzi allegedly earned $4 million in the same manner.

The indictment also says the duo concealed the accounting irregularities from McKesson during merger talks.

A third executive, former HBOC vice president Dominick DeRosa, was named in a related civil suit filed by the SEC and settled it, agreeing to repay the $361,000 he made illegally, as well as a $50,000 fine. Gilberston and DeRosa left HBOC before the merger with McKesson, but Bergonzi remained until he was fired in June 1999.

In the April 1999 stock plunge, the New York Common Retirement Fund lost $250 million and later filed a private, class action suit. That suit is in pretrial phases in San Jose, Calif. federal court.

Gilbertson and Bergonzi face up to 10 years for each of the criminal counts and a fine of up to $1 million.

“This case is a poster child for the devastating effects of financial fraud by corporate management,” said U.S. Attorney Robert Mueller at a press conference announcing the indictments. “McKesson HBOC shareholders lost $9 billion in a single day as a result of the defendants’ actions and the reputation of a century-old San Francisco company, McKesson, was severely shaken.”

In other legal news, McKesson HBOC filed a lawsuit against W3Health Corp. (Wilmington, Mass.) and 12 former McKesson HBOC employees, alleging that they took trade secrets from the iMcKesson business and used the information to develop competing software. The complaint alleges that W3Health courted each of the defendants individually to leave the company.

Edge Medical Devices (Hackensack, N.J.) is developing what it says is a new DR technology and is preparing to release a product early next year.

Edge was created three years ago in Raanana, Israel, to commercialize a new flat-panel technology developed by Israeli engineers. This year, as the company got closer to a final product, it opened a U.S.-based sales office. Its R&D and manufacturing are based in Raanana.

Robert Sohval, president of U.S. operations, explained that Edge has developed a new type of flat-panel detector called a SMART detector. SMART is an acronym for Scanned Matrix Array Readout Technology, which means the detectors do not use an active matrix array. Sohval said this configuration will allow Edge to make 17-inch by 17-inch detectors more reliable and market the technology at a lower cost than units currently available.

Sohval explained that the technology uses a direct conversion process with amorphous selenium and the sensor has a pattern of finely spaced parallel conductive tracks. After X-ray exposure, a proprietary scanhead scans across the tracks and in two seconds reads out and resets the detector. The readout electronics are on the edge of the detector and not on the surface of the detector, limiting the problems due to radiation exposure.

While Sohval could not provide an exact price, he said he expects the product to be competitive with what computed radiography systems cost.

Edge expects to offer both a digital bucky system, as well as a retrofit option that will work with virtually all existing bucky arms. The detector is designed to be thinner than existing products and fit neatly into existing bucky arms.

Beta testing could begin late this year and a submission to the FDA is anticipated in the first quarter of 2001.

Mortimore said the change will free him from operational responsibilities for Merge, allowing him to focus on the company’s new direction as an integrated healthcare solutions provider.

“A lot of what I have done throughout the history of the company is to help the industry and our company push the envelope of where healthcare is going. I have also been splitting that with operational responsibilities, and it is time for me to refocus,” he said.

Mortimore indicated that Merge built its reputation on its DICOM expertise, but that the company’s new “game plan” is to extend beyond connectivity into the integrated healthcare environment. He cited Merge’s September 1999 acquisition of Interpra Medical Imaging Network Ltd. (Toronto) as part of that new strategy. Interpra brought to Merge Java-based clinical workflow and information management products.

Linden comes to Merge from MMI Companies Inc. (Deerfield, Ill.), an international healthcare risk-management company, where he had held several positions, including CIO, CTO, and COO for MMI’s domestic businesses.

Fitch foresees HIPAA being “a large burden on most providers” and feels “most have spent very little time preparing for the possible financial impact of HIPAA. In addition, current trends in the industry have already left organizations strapped for cash and lacking the financial stability to implement these changes.”

While all hospitals now should prepare for HIPAA, accurately predicting its cost may be difficult. The Health Care Finance Administration (HCFA) estimates HIPAA compliance will cost the healthcare industry $5.8 billion, but other sources feel it will cost more than the $8.2 billion that Y2K cost healthcare, according to the American Hospital Association.

“However, Fitch believes the number could be three to four times that amount,” the report said, noting a study from Blue Cross/Blue Shield Association that estimates HIPAA could cost as much as $43 billion.

Facilities that don’t have the liquidity to purchase the hardware required for HIPAA compliance may have to rely more on application service provider (ASP) models which limits the initial investment in exchange for ongoing service fees.

The costs of compliance will depend on the gap between an individual system’s current privacy and security systems and the HIPAA requirements.

The report also stated that facilities that make it through updates will be better off in the end, both in terms of patient security and even financially.

“Demand for fluoroscopy-based navigation systems has been very strong,” said Nadim Yared, vice president of marketing for GE Medical Systems OEC. “By adding the ease-of-use benefits of electromagnetic tracking and the improved OR ergonomics of the integrated system, we expect to see the market explode in the coming months.”

Barco Display Systems will become BarcoView. The company also will consolidate its six product groups into three, giving the trio more independence to make strategic business decisions.

“These new business units, unlike our former product groups, will have complete authority over their operations and customer support services,” according to a company statement. The new business units are avionics, medical, and command and control systems.

The name change is effective immediately, while the company’s new structure will become effective Jan. 1, 2001.

The company announced that its Multislice Multiangle (MSMA) software now is available for download through GEMS’ Web site. The software allows technologists to acquire non-parallel MRI images more efficiently, resulting in shorter patient exam times.

GEMS unveiled its geCommunity Internet site. The site’s goal is to provide access to more imaging information from GEMS and other customers. The site includes a chat room, calendar, clinical cases, trial software, hardware systems and interest groups. The site is available through gemedicalsystems.com.

GE Healthcare Financial Services also unveiled an online financial and ebusiness site for healthcare providers. The site includes an objective capital project analysis tool from independent financial consultants Kaufman Hall.

GEMS also is seeing its February acquisition of Mecon Inc. (San Ramon, Calif.) bear fruit with release of the eOptimis cost benchmarking product.

GEMS calls eOptimis a “Web-enabled system for capturing all essential elements of performance management costs within a healthcare organization.” It uses primarily payroll and volume information to monitor productivity.

The system is based on the Optimis client/server product developed by Mecon, but uses Web technologies to provide a wider range of data to healthcare facilities. The product dates back to a productivity measurement tool developed in 1985.

Dwight Muse, product director for eOptimis, said the Web-enabled product provides increased access to the system’s information via the Internet.

“That lets it support multiple sites from one location, allowing peer analysis across hospitals,” said Muse. “The product is universal across all the bed-size ranges. We have 50-bed hospitals and 800-bed hospitals on this. It is very scaleable to different facilities.”

eOptimis also provides access to PeerNext operations benchmarking database, which has radiology-specific benchmarking data. The PeerNext passes the radiology-specific information to eOptimis for monitoring against peer benchmarks.

eOptimis currently is in beta testing at two facilities.

“We considered the acquisition of Colorado Medtech to be strategically appropriate for both companies, but only on terms that reflect their relative value,” said Anthony Fant, chairman and CEO of HEI. Fant also said that Civco Medical Instruments, a medical instrument company Colorado Medtech acquired late last year, is asserting claims in excess of $5 million against its new parent company.

A statement from Colorado Medtech said oral claims from the former owner of Civco were made following that acquisition, but no lawsuit has been filed.

HEI began an aggressive takeover of Colorado Medtech shares when HEI’s Fant exchanged 1.2 million shares of his personal stock in Colorado Medtech for HEI shares at a greatly discounted rate. That gave HEI 10 percent of the shares of Colorado Medtech, making HEI the largest shareholder. HEI made a public offer to buy the outstanding shares of Colorado Medtech for $12 a share up to 8.5 million shares for a total value of $102 million. That offer was a 41 percent premium over Colorado Medtech’s price at the time of the offer.

HEI shares dropped approximately 30 percent in value after the offer was made.

AcqSim CT is designed specifically for an oncology CT simulation and planning environment. It features an 85-cm, large-bore design for patient comfort and positioning accuracy. The footprint of the AcqSim is the same as a standard 70-cm bore CT scanner.

Marconi also recently signed a deal with Talk Technology Inc. (Bensalem, Pa.) to provide voice recognition capabilities for Marconi’s PACS. TalkStationRadiology Version 2 will be integrated into Marconi’s PACS, as will InterLock, a study status management product.

UltraGuide Inc. (Denver) recently received FDA clearance on its CT-Guide guidance system for CT scanners. The system lets clinicians more accurately place a biopsy or aspiration needle in the target organ using the CT-Guide display. CT-Guide also features a respiratory gating feature and attaches to most commercially available CT scanners.

The proposed legislation — The Consumer Assurance of Radiologic Excellence (CARE) Act — does not include sonographers.

“The lack of uniform standards nationwide for operators of medical imaging and radiation therapy equipment poses a hazard to the patient and jeopardizes quality healthcare,” said Lazio in a prepared statement.

The CARE Act is designed to amend the voluntary Consumer-Patient Radiation Health and Safety Act of 1981, which established minimum standards for the education and credentialing of radiologic technologists. To date, 35 states have enacted licensure laws for radiographers, 29 states license radiation therapists and 21 license nuclear medicine technologists.

Seven out of 10 Americans undergo some type of medical imaging exam or radiation therapy treatment annually.    

The CARE Act has the support of the American Society of Radiologic Technologists (ASRT), as well as the Alliance for Quality Medical Imaging and Radiation Therapy, a coalition of 12 radiologic science organizations representing some 200,000 healthcare professionals.

“The fact is, poorly trained individuals examine and treat thousands of patients in this country every day,” said ASRT President Michael DelVecchio.

ASRT officials said that because the bill was introduced so late in the Congressional session, action on it is not expected. The bill most likely will have to be reintroduced into Congress in January.

Power Quality Engineering Inc. (Phoenix) has reached an agreement with Premier Inc.’s Clinical Technology Services division (CTS of San Diego) for the exclusive marketing of PQE’s product to Premier’s 2,000 member hospitals. PQE’s custom-tuned power filters are designed to increase uptime and improve equipment reliability in radiology and cancer therapy equipment.

ART Advanced Research Technologies Inc. (Saint-Laurent, Quebec, Canada) has renewed its scientific collaboration agreement with GE Medical Systems (GEMS of Waukesa, Wis.) for a second six-month period. Under the agreement, GEMS assists ART in the development of its SoftScan optical breast imaging system, which is is expected to begin Phase 3 trials in the United States in early 2001.
Cedara Software Corp. (Mississagua, Ontario, Canada) has released Cedara Software for the Heart. The product line targets healthcare system integrators and OEM developers and is designed to provide imaging support for applications in cardiology. The Cedara Web-enabled suite of cardiology components offers simultaneous display of images from numerous imaging modalities, including angiography, ultrasound, nuclear medicine, X-ray, MRI, and CT. Cedara Software for the Heart cardiology component suite serves several stages of the workflow process, including multiconnectivity access to multimodality display, diagnosis, decision-making, and therapy.

Images-On-Call Teleradiology Systems (IOC of Dallas) and Vidar Systems Corp. (Herndon, Va.) have announced the inclusion of Vidar’s Sierra and Diagnostic Pro film digitizers in IOC’s image capture/
transmit station for films in its FilmDigitizer models FD5W-S and FD5W-DP.

Marconi Medical Systems (Highland Heights, Ohio) has expanded its PACS capabilities by offering voice recognition from Talk Technology Inc. (Bensalem, Pa.). Marconi said the integration of voice recognition will run seamlessly on its diagnostic workstations and the technology will allow the radiologist to dictate, edit, and sign ICD-9 code reports and distribute them in real-time or in batch mode. When integrated with Marconi’s Web-based results distribution, radiologists can provide electronic reports to referring physicians. Talk Technology’s TalkStation application includes Web browser functionality and Internet access.

Siemens Oncology Care Systems Group (Concord, Calif.) signed a three-year contract to supply group purchasing organization Premier Inc. (Charlotte, N.C.) with oncology equipment and in-service support. Among the products is the Primatom system, which combines a CT scanner with a medical linear accelerator. Siemens also is collaborating with Premier Innovation Institute to develop a solution for improving radiation therapy treatments.

Fuji Medical Systems USA Inc. (Stamford, Conn.) has scored a deal to supply CR systems to group purchasing organization AmeriNet Inc. (St. Louis). The contract is effective Oct. 1 through January 31, 2001. The agreement allows all AmeriNet members to buy one Fuji CR system at a discounted price and a second stand-alone CR unit at a greater discount.

An MRI technician from GE Medical Systems (GEMS of Waukesha, Wis.) was killed by a nitrogen gas leak while installing an MRI at a New York hospital in September. According to a report in the New York Daily News, Paul Ambrose, 25, arrived from a British GEMS office and was installing an MRI at Weill Medical College on the campus of New York-Presbyterian Hospital when the odorless gas seeped into the enclosed trailer where he was working. When other members of the installation team realized Ambrose was missing, the gas had become too prevalent in the trailer to attempt to rescue Ambrose. Six other people were injured by the leak.

3D imaging software provider Vital Images Inc. (Minneapolis) received approval to list its common stock on the Nasdaq SmallCap market. Trading will take place under the symbol VTAL.

OSI Systems Inc.’s (Hawthorne, Calif.) Osteometer MediTech subsidiary has received FDA clearance to market its UltraSure DTU-one ultrasound scanner. Company officials said the clearance represents the first pre-market approval for an ultrasound system for the assessment of osteoporotic fracture risk. The UltraSure DTU-one is a new generation of ultrasound scanner, which measures broadband ultrasound attenuation and provides high-resolution images to identify the precise location a scan takes place on a patient’s heel bone.

Marconi Medical Systems Inc. (Highland Heights, Ohio) has struck a deal with Broadlane.com to be the exclusive provider of multislice CT scanners for the BuyPower GPO, which serves hospitals owned by Tenet Healthcare Corp. (Santa Barbara, Calif.). The one-year deal began Sept. 1 and evolved from an existing relationship between Marconi and Tenet.

GE Medical Systems (GEMS of Waukesha, Wis.) established a cardiology-specific sales and marketing team to sell its products directly to the cardiology market. GE Medical Systems Cardiology will provide cardiology products, including cardiac X-ray, MRI, CT, nuclear medicine, ultrasound, ECG, holter monitoring, EP systems, defibrillators, stress testing and integrated cardiovascular information systems. D. Brent Shafer, formerly general manager of X-ray sales and marketing, has been named general manager of the new organization.

Marconi Medical Systems (Highland Heights, Ohio) signed a multiyear distribution agreement with the Japanese operations of Shimadzu Corp. (Kyoto, Japan) for Shimadzu to sell Marconi’s multislice CT scanners exclusively in Japan. The companies also agreed to extend their current agreement for the distribution of Marconi’s nuclear medicine products in Japan. According to Marconi, the companies have an 11-year history in nuclear medicine resulting in Shimadzu gaining 25 percent market share in the Japanese market.

Theragenics Corp. (Buford, Ga.) has signed a five-year deal for Nycomed Amersham plc (Buckinghamshire, U.K.) to distribute the TheraSeed oncology seed in the United States, Canada, and Puerto Rico. The five-year agreement is consistent with Theragenics’ plans to place TheraSeed into a variety of non-exclusive domestic and international distribution channels.

Boston Scientific Corp. (Natick, Mass.) received clearance from the FDA to market its Atlantis SR intravascular ultrasound (IVUS) catheter. According to the company, the Atlantis SR is the only commercially available 40 MHz IVUS catheter compatible with 6 French guiding catheters. The 40 MHz transducer offers the highest frequencies available, allowing for high-resolution images that are easier to interpret. The product incorporates Monorail catheter technology in its design. The Atlantis SR is used to decide the size of stents and assess how much to expand the stents during procedures.

Fonar Corp. (Melville, N.Y.) will sell and distribute the virtual colonoscopy product from Viatronix Inc. (Stony Brook, N.Y.). The product uses a CT scanner to simulate a colonoscopy exam non-invasively. The two companies may explore using MRI images to produce virtual exams.

Mobile P.E.T. Systems Inc. (San Diego) has been approved for trading on the OTC Bulletin board under the symbol MBPT.OB.

A.L.I. Technologies Inc. (Vancouver, British Columbia, Canada) has signed a deal with Vidar Systems Corp. (Herndon, Va.) to offer Vidar’s DiagnoticPro film digitizer with its ALI UltraPACS product.

Peregrine, a Monte-Carlo dose-calculation system, was developed by scientists at the U.S. Department of Energy’s Lawrence Livermore National Laboratory (Livermore, Calif.) in collaboration with researchers at the University of California, San Francisco. The product was licensed exclusively to Nomos in July 1999.

Peregrine calculates in 3D where radiation goes in the body and how much of it strikes tissue, bone or empty cavities. It relies on a mathematical technique called Monte Carlo to track radiation by simulating the trillions of radiation particles that enter the body during treatment and by predicting accurate radiation dose. Peregrine uses a patient’s CT scan to tailor the radiation dose calculations to the patient.

Traditional radiation treatment planning systems generally only specify the theoretical calculation accuracy of the dose plan, because the systems may lack information about the interaction of the radiation beams with patient tissue.
U.S. Secretary of Energy William Richardson announced the FDA clearance from Nomos’ headquarters in Pennsylvania.

Initially, Peregrine will be incorporated into Nomos’ inverse treatment planning system, Corvus, which was demonstrated at the annual meeting of the American Society for Therapeutic Radiology and Oncology (ASTRO) in October in Boston. Subsequently, a stand-alone version of Peregrine will be developed to work with other treatment planning systems.

The Hope Cancer Center (Los Angeles) is slated to be among the first to use the new Peregrine system.