Diagnostics

As good as new?

Before you buy used and refurbished equipment, answer these crucial questions.

BY MICHELLE DALTON, ELS

Facing a variety of economic pressures, such as declining reimbursements, today’s ophthalmic practices must continually look for ways to improve financial performance. In this environment, buying refurbished equipment might be one option to improve the bottom line.

Rick Torney, national sales manager, Kowa American Company, says the used equipment market gives practices a cost-efficient option for purchasing equipment. “As reimbursements come down, as doctors are paid less for their services, they need to find economical ways to continue providing exemplary service, and buying used equipment is but one option.”

In addition to equipment manufacturers, several companies specialize in certain types of used equipment, such as patternless edgers, diagnostic equipment, refractive lasers, and operating microscopes, says Robert Padula, CEO, Eye Care Alliance, an eyecare equipment training, evaluation, refurbishment and repair company.

“The market has evolved from the ‘used car salesman’ approach with some dubious salespeople who would re-sell equipment but be unreachable for service,” he said. “That’s why this business exists, and it gets more legitimacy every year. Used equipment buyers are no longer just the risk-takers. These are multi-office practices, and people who are really successful and more business-savvy now. They know they can get a great product at a much lower price.”

Before you purchase used equipment, here are the key questions you need to answer.

Is this seller trustworthy?

First and foremost, buy from a reputable dealer. Equipment manufacturers, which sometimes have overstock or have upgraded another practice and have used equipment on hand, should be considered trustworthy.

When dealing with third-party dealers, word of mouth creates reputation, so talk to colleagues at conferences and meetings who have bought used equipment to determine trustworthy companies. If you find that the dealer lacks product knowledge, this may impact their ability to answer questions after the purchase and assist with servicing the product if needed.

“The eyecare industry is a relatively small one,” Mr. Padula says. “If a practice is interested in buying a used piece of equipment, eBay, for example, is not a trustworthy venue. There won’t be technical support.”

What is the device’s history?

Before considering the possibility of purchasing a newly refurbished piece in lieu of brand-new, practices need to consider what they’re buying.

Jody Myers, sales manager of Florida Eye Equipment, a used ophthalmic equipment reseller, says several sources feed the used equipment market, including expanding or upgrading practices, merging solo practices or closing practices. Also, companies that refurbish equipment often receive it through finance companies — where doctors have defaulted on their loan — or through new equipment reps who need to offer trade-in options on new equipment sales, Mr. Padula says.

Therefore, regardless of where you buy the equipment, request the history of the used device. This should including:

• How the refurbished piece has been conditioned

• What tests (if any) it underwent to ensure it functions correctly.

• Age of the equipment

In terms of age, most used equipment should be between five and 10 years old — anything older than 10 years will not retain value (monetarily or diagnostically), Mr. Torney says. However, age plays a larger factor for some devices more than others. For example, microscope technology has remained largely unchanged over time, while femtosecond lasers constantly receive software upgrades as the FDA approves more indications. This means early iterations may not have all the bells and whistles you want to promote to your patients.

What kind of service and support do vendors offer?

Most reputable third-party vendors support the used products they sell, so determine the level of assistance they offer. Buying from a broker who is unfamiliar with the equipment may be a sign that there’s limited-to-no support if the device needs service.

Also, determine whether the company offers a warranty, and ask whether the warranty is included in the price. In addition, ask what documentation is necessary to engage the remaining warranty (where applicable) and how long the seller’s service warranty lasts. Keep in mind, even if a manufacturer discontinues a particular model, some have an internal policy to support their equipment for a set number of years.

Besides cost, what other factors impact bottom line?

When deciding whether to buy new or used, consider each device’s reimbursement levels, Mr. Padula says. For example, if a new device reimburses at the same rate as the used device, and you are not convinced the new device offers better patient outcomes, the new vs. used debate may become more clear for you.

“If a practice is not convinced the latest technology will change how they treat their patients, then price has to become an issue,” Mr. Padula said.

Also, practices should be aware of recertification and inspection fees, he adds. Manufacturers typically charge a penalty to customers who buy a product from someone other than the manufacturer who attempt to bring the product to the manufacturer for support and repairs.

In some cases, these fees can range in the thousands, so keep this in mind when deciding whether to buy from a manufacturer or a third-party dealer.

When should I not buy used?

There are some exceptions to buying used, such ultrasound devices, Mr. Padula says. “A-scans, B-scans…they use a probe, an ultrasound transducer. It’s impossible to figure out how much life is left in it.” Also, the price for a new ultrasound device “has come down so much it doesn’t really make sense to buy used,” Mr. Padula adds.

Another potential exception: refractive lasers, as prices on new equipment have decreased and older units may not be reliable, Mr. Padula says. And lasers lose power, adds Mr. Myers.

“Eventually all these devices run their course and become obsolete,” he says.

Consider your options

During the 1980s and 1990s when reimbursements were “huge,” ophthalmologists didn’t think twice about buying new equipment, Mr. Myers says.

However, an inverse relationship between reimbursements and what practices are willing to spend on the equipment needed to perform those procedures has impacted buying decisions.

The used equipment market has become an attractive option for those looking to cut costs while not negatively impacting patient care. OP