by Daniela Zimmerman

This article originally appeared in the November 2011 issue of DOTmed Business News

Used or refurbished equipment has been a part of European Hospital’s business for the last twenty years. I recall meeting with a former Philips CEO in 1993, who was then operating out of a single home office to build up a new Philips Medical System company to buy and sell refurbished equipment. How times and the business have changed! On my most recent visit to Siemens in Erlangen I walked into a neat, clean and large factory for refurbished equipment. With the exception of new exterior shapes for CT and MR equipment, no one would be able to tell the difference between refurbished and new systems.

When I look back, the growth of the industry is truly astounding. I have watched Bruce Block go from having 10 square meters at international medical fairs like Medica and RSNA to what must be 350 square meters and more today. Now, in the digital era, where buying and selling over the Internet has become standard, exciting possibilities for cooperation, collaboration and creating new business models have arisen. One example illustrating that point and one we’re very proud of is a new partnership between DOTmed and European Hospital to open a DOTmed portal in Europe via our website. This will bring our users more and more convenient access to the worldwide refurbished market.

And what a market it is becoming! Driven by political and economic forces, it’s expected to be worth $11.6 billion by 2015, according to Frost & Sullivan. There is substantial potential “for those in the business of making healthcare work,” to quote European Hospital’s tagline.

After the political landscape changed in 1991, a large area in Eastern Europe had a tremendous need of new equipment, certainly a factor that gave the business a large push. Today, this market is maturing and used equipment sales are spreading everywhere – not only into less industrialized countries.

Economic strain is also a major factor in the growth of the refurbished market. Until fairly recently, hospitals and radiology practices were more likely to buy new equipment, but due to increasingly constrained health care budgets worldwide as well as the global financial crisis, more hospital CEOs and managing directors of clinics are considering refurbished equipment. There has also been a shift in who makes purchasing decisions — at least in hospitals. The heads of imaging departments now have to discuss their “dream CT” with finance and management. The good news about selling their used and surplus equipment online is that they can often get higher prices which help them afford such new equipment. That’s good for them and the OEMs.

Today, all big suppliers of medical technology equipment offer refurbishment as well as service and warranties . In Europe, , we also have third-party vendors, ranging in size from one-person outfits to medium-sized organization. They also have, to state it diplomatically, a variety of attitudes toward the market. Some perform only minor, cosmetic repairs and are not concerned with warranty or service at all. Some – but only a few – act like the big vendors.

There is a need to bring greater integrity to the market and in this DOTmed has started to change the field, and will bring additional transparency to the European market. DOTmed has helped raise the standards of behavior in the industry with such methods as blacklisting those who discredit it, so that everyone knows who the “bad apples” are. This needed to be done and DOTmed has done it. This leads to more safety for the buyers and sellers alike, which is essential to the growth and efficiency of this type of online commerce.

All of us at European Hospital are eager to make DOTmed live on our site, and to bring this marketplace — the biggest and most important of its kind in the world — to our readers and the European community.

Daniela Zimmerman is managing director of the journal European Hospital