NASHVILLE - Used medical imaging equipment can be a good option for radiology facilities long on need and short on cash. But the used equipment market can be a jungle, fraught with unscrupulous refurbishers looking to unload equipment that doesn’t measure up. How can your organization avoid falling for some huckster’s scam?
David Frazee, administrative director of radiology at Parma Community General Hospital in Parma, OH, offered his experience as a radiology manager and used-equipment escrow broker to attendees of the American Healthcare Radiology Administrators (AHRA) conference Tuesday. Frazee, who also heads the Frazee Group, a radiology consulting service, had cautionary words for prospective buyers of used equipment.
"Although the FDA is reviewing guidelines for refurbished equipment, it will be eight months to a year before they are put in place. In the meantime, it’s really ‘caveat emptor’ out there," Frazee said.
There are several outlets where buyers can find used equipment: hospitals or clinics that are going out of business; dealers or brokers of used equipment; and Internet-based auction sites.
Getting a good deal on a hospital or clinic’s equipment is going to be tough for an individual, advised Frazee, as equipment dealers are constantly on the prowl for such opportunities. Auction sites are an up-and-coming option, but present challenges of their own.
"Auction sites can offer outstanding deals for a buyer," Frazee said. "But you’ve got to know exactly what you want, and you need to be sure that the auction has an escrow agent in place to handle the financial transaction."
Purchasing used or remanufactured equipment, with the proper precautions, can result in significant cost savings for the buyer. You can also get a machine with a proven track record of reliability. However, you’ll need to do your homework. Is there an upgrade path for the equipment you’ve selected? You'll need to check with the original equipment manufacturer (OEM) for this information.
Perhaps most important for the long-term viability of your purchase, are parts readily available for the make and model you want? If not, you’ll have to reassess your department’s needs.
If you decide to engage the services of an equipment broker, Frazee outlined several questions to ask of a reseller before making an equipment purchase:
- Be sure to ask for the device’s year of manufacture and serial number. This way you can check with the OEM as to the history of the equipment.
- Ask for the existing service reports for at least the last 12 months. This allows you to check on the status of the equipment, and also lets you see how well it was maintained.
- Get a recent customer or user list from the reseller and contact the organizations on the list.
- Insist on a flexible down-payment option. Many resellers will want up-front payments of 50% or more before delivery.
- Get a warranty in writing before signing any purchase forms. Also, be sure that the document is as detailed as possible.
Even if you’re satisfied that you’re dealing with a reputable broker, Frazee suggests getting the following items contractually specified before creating a purchase form:
- Who is going to perform the installation? If it’s going to be left up to you, you’re probably better off with another broker.
- Who provides the service support? A third party, the broker, or an OEM? What will be the maximum downtime before a replacement is brought online? An OEM or third-party service organization could be several states away from your installation.
- How long is the warranty going to remain in effect? Thirty days, 90 days, or longer? Frazee advises his clients to structure a minimum six-month warranty with the reseller before entering into a purchase agreement.
When you’re ready to draw up a purchase form, know what your commitment to the reseller is, and what the reseller’s commitment is to you. Above all, be sure you know whose interests are being protected in the document: yours or the reseller’s?
Although most remanufactured equipment brokers are trustworthy, be aware that there are a few swindlers trying to get your money. A common strategy for some resellers is to persistently telephone you or your staff, looking to make a deal too good to be true. It is. They might also try to pull a "bait and switch" con by delivering equipment you didn’t order, Frazee said.
Frazee counsels that you should, "always, always, always use an escrow agent when making an equipment purchase. Under no circumstances should you hand money over to a reseller until you’re satisfied that you’ve received what you ordered."
"Always remember," he added as final caution, "anybody that promises you everything won’t be able to deliver anything."
By Jonathan S. Batchelor
AuntMinnie.com staff writer
August 9, 2000
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