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Technology
in Medicine Oct
03
Turnkey Approach Spurs Tremendous
Growth for Refurbishing Company
by Julie E. Williamson
It’s no surprise that today’s healthcare facilities
face enormous challenges, with declining reimbursement
and cost constraints ranking particularly high on their
list of concerns. In light of those battles, many healthcare
providers are turning to refurbishing companies to provide
them with the quality, cutting-edge technology their patients
demand, at a fraction of the price of new.
While the initial cost savings may be substantial, both
healthcare professionals and executives from third party
refurbishing companies know that successfully impacting
the bottom line requires more than an attractive price
tag. According to Rick Stockton of Atlas Medical Technologies,
the Ontario, CA-based refurbisher and remarketer of imaging
equipment, customers also have the right to expect that
the company they choose will continue to meet their needs
long after the sale transaction has been completed—a
need that is, unfortunately, being unmet by many refurbishers.
Since June 2000, Atlas has been working hard to fulfill
that need, and its efforts certainly seem to be paying
off. Atlas experienced such growth—upward of 300%—that
the company quickly outgrew its 8,000 square foot facility
and has to move into another that was more than three
times its size in order to accommodate customer demand.
Here Stockton discusses the myriad challenges plaguing
the healthcare industry, how Atlas Medical Technologies
is helping customers overcome those obstacles, and why
he believes Atlas is experiencing such tremendous growth
in the industry.
Q: What led to the development of Atlas Medical Technologies?
A: We started this company because we saw a need
in the marketplace that the other vendors weren’t
providing. A customer could buy the equipment, but they
would have to find someone else to perform the installation
and provide the subsequent warranty for it. We saw that
there was really no quality customer service after the
initial sale, and we wanted to change that. From the beginning,
Atlas made it a priority to be a customer-focused company.
Selling a product was one thing, but we have always believed
that the follow-up or after-market service is just as
critical, if not more so, to the overall operation. As
we put products in, we make sure they work. We don’t
rely on a third party to do it for us. Some companies
say they have the manufacturer doing the work, but what
customers need to realize is that the manufacturer doesn’t
usually have a vested interest in the product if they
didn’t sell it.
Q: How has the move to the larger facility improved Atlas’
customer offerings?
A: When we first got started, we wanted to take
things slowly to make sure we had everything in place.
We hired some key employees and then started marketing
the company. It went over extremely well, to the point
where we were growing about 200-300%. Because of that
growth, we moved into an 8,000 square foot facility and
immediately outgrew it. About the same time, ADAC Laboratories
decided they were going to be getting out of the GE refurbishing
business, so we had the opportunity to move back into
that facility. We moved from 8,000 square feet to 25,000
square feet. It is very well designed, with five test
cells so we can operate five scanners at the same time.
We can also run three mobile units at the facility. The
building has 800 amps of 480 volt power, plus a 50 hertz,
380 volt generator that allows us to accurately test the
machines in a 50 hertz environment. This is important
to the many countries that operate on 50 hertz power.
Q: To what do you credit Atlas’ growth spurt?
A: There is a real demand for quality equipment, and
of course, the need is also there from the cost containment
side as well. The Centers for Medicare & Medicaid
Services is changing reimbursements again and it is anticipated
that rates will drop even more. With those lower rates,
hospitals are looking to save wherever they can. But they
want a product that will be supported by the company that
sold it. I believe that the real strength of our company
is that we offer a turnkey solution. We do it all, from
the initial site planning to complete after market service.
More than anything, we really listen to our customers
so we can determine their needs. We go in and really try
to understand what they’re wanting to accomplish
with their practice, whether it’s screening, diagnostics
or looking for a mobile environment. We also want to know
which types of patients they treat. Once we know their
needs, we can offer a suggestion based on those specific
needs. Every customer is different. It’s up to us
to determine which pieces of equipment will help them
improve their offerings and get the most value for their
money.
Q: You recently purchased a company in Florida. Why
did Atlas choose to team up with this particular organization?
A: We were selling equipment across the country and
were looking for a solution for our service needs. Initially,
we started interviewing engineers, but we couldn’t
find anyone who could maintain an independent nature and
follow our guidelines for customer support and service.
We then looked at our competitors and the way they were
interacting in the market. This particular company, Group
5 Technical, just happened to be one of the more exceptional
groups out there for customer service. As we looked at
their organization and compared their operation with ours,
we saw a lot of synergies: They were very customer-focused
and wanted to maintain a relationship with the customer
after the sale. It was really a natural fit and when we
started talking even more we saw even more synergies in
terms of management. The relationship was great right
from the beginning, so we came to an agreement where Atlas
would buy their company and bring it into what we were
trying to accomplish. That occurred at the beginning of
this year. All the same people are still in place, but
now just under the Atlas Medical Technologies umbrella.
We have also added one person and are getting ready to
add another in Florida. Nine months into this, we still
have a great relationship and are all excited about the
opportunities. We’ve already sold five more machines
in Southeast, so the growth is tremendous. Their size
is about 40% greater now. Success lies in finding the
right people and marrying common goals, which I believe
is exactly what happened for us.
Q: Aside from the customer service aspect, what sets
Atlas apart from the competition?
A: I think product depth and knowledge are key. We
have a good reputation in the marketplace and people know
that our products will not only work, but that we will
stand behind every item sold. We offer an entire solution
to the customer. Not only do we provide a quality product,
we’ll also provide the financing for it as well.
And we can provide rentals on the equipment, too. Because
the core people of the company have been doing this so
long—from the sales staff, management, and even field
engineers—we really understand the process and needs
of the customer.
The refurbishing process we use is something that we developed
when we were at ADAC. We used ADAC’s Total Quality
Management approach and we developed a procedure that
made sure that every step of the process was checked and
recorded. We keep a file on everything that is done to
a machine as it goes through the refurbishment process.
We make sure that the machine is fully tested with all
the covers on and in the same type of environment it would
be in at the healthcare facility. We run it for 48 hours
and then turn it off as if it was in that environment,
wait 12 hours and then turn it back on again. It takes
more than 80 man hours to do a refurbishment, so the process
is very extensive.
We also stock equipment, rather than just buying based
on an order. More importantly, though, we only select
equipment that we feel confident in putting back into
the market. When we purchase a piece of equipment, we’re
there to handle the de-installation and to take care of
its shipment. We believe it is important to know the previous
history of a machine, so we talk to the end user and get
to see the machine in use. Because of our extensive process,
we can stand behind every product and guarantee performance
that will meet or exceed the manufacturer’s recommendations—not
only for technical specifications, but also for downtime
and reliability.
Q: What are some of the key issues impacting customers
today and how is Atlas helping to address them?
A: Reimbursement, as you know, is really starting
to come under pressure. For a cost-effective solution—or
for an upgrade solution— it’s better for many
customers to go refurbished, as opposed to paying high
dollar for the newer equipment. The technology for a single-slice
helical scanner hasn’t changed dramatically over
the years. If anything, if you purchase a low-cost scanner
from the OEM, it’s probably going to be a downgraded
version of what’s available in the marketplace. The
scanners I’ve seen that are comparable in price to
a refurbished one we’re selling don’t compare
in quality. They will have a smaller tube, a smaller generator
and will lack many of the capabilities that you’d
find in one of the medium to higher end products we’re
selling. The differences are tremendous.
Q: Speaking of reimbursement, I understand that reimbursement
rates are going to be cut drastically for the oncology
sector. How is Atlas addressing that challenge for customers?
A: Yes, word has it that CMS is going to reduce hospital
outpatient centers’ reimbursement rate for IMRT by
63%, which is quite drastic. We are offering a turnkey
solution for oncology customers that includes the treatment
planning computer—the workstation that transmits
images to the rest of the process that goes on with cancer
treatment. We also modify the machine so that it works
in an oncology environment, and help our customers understand
the process of integrating CT simulation with the whole
treatment planning process.
Q: Atlas prides itself on offering leading edge—not
lagging edge—products. Can you elaborate?
A: We try to stay more on the forefront of technology
as it comes into the marketplace. In imaging right now,
we consider a helical single-slice unit as the middle
ground technology. We then go all the way to the front
end of that marketplace, which is a light speed or an
MX8000.
That’s not to say that more expensive products are
necessarily better. I recently read a study that showed
that when looking at lung nodules, a multi-slice scanner
actually generated more noise than a single-slice. As
a result, the multi-slice scanner actually masked the
nodules, whereas a single-slice picked them up more easily.
People are always wanting to move up to a multi-slice
for many reasons, but in this study, they proved that
the single-slice actually produced a better image for
lung scanning—and for less money.
Q: What new products/services is Atlas introducing?
A: One product we have introduced is the Medical Digital
Recorder. It’s a dicom device that goes onto the
network. With this digital recorder, you’re able
to write the images directly in a dicom format to a CD
or DVD. We were getting a lot of requests from customers
who wanted to know how they could write images to a CD.
Most of the applications available were multi-loading
CD changers that were very costly from the larger companies,
so we wanted to find a solution that would help meet their
needs.
With the Medical Digital Recorder, the images are stored
in the device until you insert the CD. It will then automatically
write in an archive mode or single patient mode. It’s
an innovative technology and exactly what the customers
were requesting. The features alone offset the expense.
That’s especially true when you compare it to MODS,
which can cost $250 each. A CD only costs a quarter.
Q: What are Atlas’ goals for the future?
A: We are in another phase of development where we
are trying to roll out our MRI capabilities—refurbishing
MRIs, servicing the products we sell, looking for customer
needs and trying to fill them with later model products,
as opposed to the seven- to ten-year product line.
Q: If a customer can buy a new piece of imaging equipment
for the same price as a refurbished model, why would one
want to choose a used machine?
A: This is a true story: I went to a customer and
was explaining why he should go with a refurbished product
versus new. I explained that the refurbished item began
its life as a more expensive product and that it was equipped
with more of the technology enhancers that would make
it a more robust product—such as a larger generator
and tube. I explained that when someone buys a new product
at the same dollar amount it is usually the equivalent
of buying a brand new KIA versus buying a used Mercedes
with a warranty. I thought I had come up with a great
analogy and was really proving my point. Then the customer
said, ‘I drive a KIA.’ In this instance, my
point was missed—and he ended up buying the new model.
For more information about Atlas please
contact them at 909.923.7887 or visit www.altasmedtec.com.
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