Q&A with Chris Cone of Echoserve

Echoserve provides extensive depot repair and exchange services for ultrasound parts and transducers. The company also supplies mammography parts, including: x-ray tubes, digital flat panels, Buckys and high-voltage generators. Leveraging its advanced depot repair capabilities, Echoserve provides field service to hospitals, doctor offices, imaging centers, mobile imaging service providers and asset management companies throughout North America. Now there really is an alternative to the manufacturer for high quality field service.

Q: What is the primary focus of Echoserve and which market(s) do you serve?
A: Echoserve focuses on parts depot repair and exchange and clinical field service for diagnostic ultrasound and mammography equipment. We work on ultrasound equipment from GE, Philips, Siemens, Toshiba, Medison, Aloka, and SonoSite, and mammography equipment from GE, Siemens, Hologic/Lorad, and Fischer Imaging.
 
Q: What challenges have your faced since founding Echoserve?
A: Many. Medical imaging parts and service is a highly competitive market. On one hand, it’s very fragmented, with literally dozens of parts dealers chasing the business; on the other hand, it’s highly concentrated with GE, Philips and Siemens dominating the end-user market for equipment and service.  In both respects, the competition in the market is tough and breaking in with any real degree of success is difficult. Moreover, the U.S. market for ultrasound and mammography equipment is relatively flat, so every dollar out there has to be taken from somebody else. There is a fight on every deal. On top of the challenging competitive landscape, there are the usual small company challenges of fueling growth, developing new processes, implementing quality systems, finding, hiring and retaining talent, etc.
 
Q: How has the emergence of  the E-commerce affected your business and the imaging field?
A: If the emergence of the Internet has done anything, it certainly has commoditized information. With very little effort, a buyer today can obtain detailed information on products and services and can locate several providers for a given commodity. However, what has struck me most about E-commerce and the market for diagnostic imaging equipment, parts and service is how little it has affected the end-result; ultimately, people by from people they know and trust. As it has always been, a buyer-seller relationship is still almost always consummated through a direct inter-personal relationship, not through a Web browser.
 
Q: What are some of the highs and lows you feel the industry has experienced since you have been in the imaging field?
A: I’ve been very fortunate that the past decade has really been good to medical imaging—the U.S. economy has generally been very strong, reimbursements have been steady, the market has continually expanded, new imaging technologies have been brought to market and adopted on a widespread basis and imaging has deepened its penetration in the clinical environment. This has enabled the major manufacturers to grow and has created a robust secondary market of parts dealers and 3rd party service companies like Echoserve. However, there are some strong indications of a storm on the horizon. The Deficit Reduction Act (DRA) effect on reimbursement for medical imaging procedures has already negatively impacted the outpatient segment of medical imaging equipment and when private insurers follow suit, we will see extreme cost pressure on medical offices, imaging centers and clinics around the country, which will in turn affect suppliers of these customers. And efforts to balance the U.S. fiscal budget won’t only affect clinics, it is almost certain to impact the hospital market for medical imaging as well. I would predict little to no growth or even decline in the U.S. market for imaging equipment over the next decade.   
 
When market growth stops or goes into a negative cycle, you will see competition in the market further intensify. Inevitably there will be price pressure and real price erosion. 
Only the strongest players in the market will survive. Those companies with a sustainable competitive advantage, with valuable Intellectual Property, with a consistent base business, a diversified customer base, etc. will make it; weaker players won’t. Without a doubt, we will see fewer dealers in the secondary medical imaging parts and service market over the next ten years.
 
Q: What trends do you see for the future (business, products and industry)?
A: As outlined above, I feel that the near future in medical imaging will be primarily defined by one thing: cost pressure. Cost pressure will affect all aspects of diagnostic imaging.  It will impact how OEMs invest their R&D dollars, potentially moving money away from marginally valuable technical innovations toward cost reduced products. This will lead to a higher degree of hardware integration and greater pervasiveness of software-based technologies to reduce Bill of Material and final assembly costs. Consequently, the Average Selling Prices on new equipment will almost certainly continue to go down in a real dollar sense and we could see greater demand for used systems. More hospitals will aggressively attempt to move away from full service maintenance contracts and will push the industry to provide more lower cost alternatives for service. The large companies will look to reduce expenses in their field sales and service groups by leveraging alternate lower cost distribution channels, particularly for smaller clinical sites. In a way, I see everything in the industry changing over the next ten years and all of Echoserve’s strategies center around where we see the market going over the next decade.

Q: What can customers expect from Echoserve that they may not get from others in the marketplace?
A: Echoserve is the only company in the secondary market to offer a complete set of
solutions for ultrasound and mammography equipment. From comprehensive ultrasound probe repair, to an extensive inventory of exchange parts, to a broad selection of previously owned equipment and a cost-to-coast footprint of field service engineers, Echoserve has positioned itself as a true low-cost and high quality alternative to the man-ufacturer. Few if any other players in our peer group can match our suite of product and service offerings.

Contact: Echoserve 301 Commercial Road #I Golden, CO 80401
Website: www.echoserve.com
Email: sales@echoserve.com
Ph: 303-384-ECHO (3246) |
Toll Free: 877-386-ECHO (3246)
Fax: 303-384-1904