Diagnostic imaging equipment is expensive, but the benefits it offers are significant, especially as healthcare providers place a greater focus on patient outcomes and satisfaction. “Diagnostic imaging technology is essential to the proper diagnosis and treatment of disease in a patient,” says Larry Siebs, president and CEO of Shared Imaging, a provider of diagnostic imaging equipment and services. The results of diagnostic imaging, after all, can lead to earlier diagnoses and shorter hospital stays, and fewer invasive surgeries, Siebs says.

But as the healthcare landscape shifts and reimbursement models change, many healthcare providers would rather avoid the risk and uncertainty associated with purchasing expensive imaging equipment, Siebs says. Streamwood, Ill.-based Shared Imaging can provide that equipment on a short- or long-term basis via a functional-service model.

Helping Rural Hospitals

Shared Imaging was founded in 1989 to provide CT imaging equipment to rural hospitals that could not afford to purchase the technology, which at the time cost more than $1 million, Siebs says. “It was very difficult for smaller hospitals to come up with the capital and justify that kind of expense,” he recalls. Instead, the hospitals turned to Shared Imaging, which at the time provided the equipment on a fee-per-scan basis. “It provided hospitals with a cost-effective means to operate the equipment,” he says.

Shared Imaging has “evolved and grown since then” to become a leading provider of diagnostic imaging equipment to healthcare systems, Siebs says. Many healthcare providers that rely on diagnostic imaging equipment to provide quality care do not want to purchase the costly technology. Instead, they have turned to the functional-service model, he says.

“Our model fits in nicely,” Siebs explains. “It doesn’t always make economic sense for a healthcare provider to plunk down millions of dollars, especially with the uncertainty that exists in our current health care system. It’s very expensive equipment. 

“That’s where we come in; we manage that asset,” he adds.

The functional-service model treats diagnostic imaging as a service, not as a piece of equipment. The model allows suppliers such as Shared Imaging to retain ownership of the technology and provide it as a service. For this service, they are paid based on performance contracts, Siebs explains.

Shared Imaging offers a variety of agreement options in terms of services, length of term, payment structures and balance-sheet treatment. They all offer benefits not found in the traditional ownership model, which can limit a hospital’s ability to respond to changes in capacity, reimbursement and patient mix, Siebs says. Additionally, hospitals that affiliate with an accountable care organization (ACO) need imaging equipment but do not want to be burdened with long-term assets that may sit idle after completion of the ACO contract, he says.

More Than Equipment

Shared Imaging does more than provide the equipment used for CT, PET/CT, MRI, ultrasound and digital X-ray exams. Indeed, the company understands the urgency required when a medical facility’s imaging equipment is not performing properly. As a result, the company also offers replacement parts, upgrades and preventive maintenance programs to assist in-house biomedical groups, Siebs says. 

The company also will transport equipment in specialty designed medical coaches from one facility to another – an increasing need as more healthcare providers open neighborhood clinics, he says.

“Healthcare providers are beginning to realize that bolting the equipment down to the floor isn’t necessarily the right solution,” Siebs says. “Care is moving to the clinics. Hospital care is the most expensive form of care.” Additionally, the company provides technicians to operate the equipment when needed, he says.

Staying Competitive

Shared Imaging has two primary competitors, but Siebs makes a clear distinction between the company and its rivals. “We’re in a growth mode,” he says. In fact, the company’s five-year plan calls for approximately $30 million per year to be spent on new equipment. Competitors, meanwhile, are “recycling” existing equipment, he says. “We’re seizing the opportunity,” Siebs points out.

Yet the sales cycle for imaging technology and its associated services is a lengthy one, typically 12 to 15 months. The first three or four months involve discussing cost of ownership, Siebs explains. To help hasten the process, Shared Imaging will even purchase old imaging equipment from hospitals that decide to adopt the new model.

The company has approximately 280 imaging systems in its inventory, and rarely are more than 2-3 not in use, Siebs says. Equipment that is removed from inventory is either sold or scrapped for parts, which are sold or used in support of its maintenance service programs. Approximately 35 percent of its system inventory is comprised of MRI units while CT and PET/CT scanners comprise 55 percent of the portfolio, and the remainder is split between ultrasound and digital X-ray he says. 

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