With the price of new equipment rising and reimbursement for procedures declining, there has never been a better time to consider buying used equipment. However, before you purchase, it is important to find out as much as you can about the product and the company you’re buying it from.

 

Most used ophthalmic medical equipment dealers buy equipment from doctors who are either going out of business or retiring, or from finance companies that have taken back the equipment and sold it at auction. They will make sure the product is working and sell it quickly so they don’t have to hold any inventory. Some companies may purchase products and make some cosmetic improvements before reselling them; however, they may not bother with issues such as calibration and clinical value of test results.

“Probably the prevailing feeling about used ophthalmic equipment is that it is kind of a shady, black market, risky type of business. Some people have made the business that way by being unethical and saying that something is two years old when it’s really 10 years old,” says Bob Padula, owner of Eye Care Alliance, a company that sells factory-direct, pre-owned ophthalmic equipment.

Mr. Padula, a former executive with Carl Zeiss Meditec, has a unique approach in that his company offers refurbished equipment that comes directly from the manufacturer to the customer. Others are now taking a similar approach. They have developed relationships with the manufacturers whose products they sell and are offering refurbished pre-owned medical equipment. They purchase used medical equipment, return it to manufacturers’ specifications, resell it with a warranty and service it, if necessary.

“Normally, if a customer buys from a used equipment dealer, the manufacturer will charge a fee just to come out and inspect the equipment. That fee is typically more than $1,000,” says Mr. Padula. However, only companies who have relationships with manufacturers can purchase parts from these manufacturers and service the used products themselves.

Used medical equipment dealers typically offer warranties that average between 90 days and six months. “Most of these are warranties where they hope nothing happens,” Mr. Padula explains. “A lot of times, these dealers will try to work issues out over the phone, or they will have the customer call the manufacturer and try to get them to come out and just hope they don’t have to pay for the inspection and recertification, service call and parts. They usually don’t inform the customer that if the manufacturer has to repair it, they are subject to an inspection fee. For an OCT, the fee is $2,500 just to come out and look at it. Then, if it passes muster, the manufacturer will charge for the service call, the parts and everything else. It is an expensive proposition if something goes wrong.”

 

Most of the companies who have relationships with equipment manufacturers do very little advertising. Most of their business comes from personal referrals and word of mouth. If you are in the market for a piece of equipment, ask other doctors if they have purchased used equipment and had a positive experience and check the classified sections of the leading industry journals.

“When you find a company that has been recommended or on a Google search, check out the website,” Mr. Padula suggests. “Does it have a professional look and feel? When you call, ask the person you are dealing with about his background, and ask for references of others who have recently purchased the same equipment. Is the person knowledgeable and informative about the market and the various options, both new and used?”

It is important to make sure that the company has a physical presence and is not just a person who set up a website and is selling equipment out of his garage. According to Jeff Wheaton, the Internet has been both a blessing and a curse for the used medical equipment business. “It’s been a blessing because you can reach worldwide customers, you can e-mail pictures to customers, and potential customers can see your website. But, the problem is that people can represent themselves as something they’re not very easily. A guy working out of his garage can make it appear that he is a big company with the Internet and a Web presence, so make sure to research whom you are doing business with,” explains Mr. Wheaton, owner of Vision Systems, Inc.

Sean O’Donnell, owner of Laser Locators, agrees. “You want to make sure that you are dealing with a company that has the size and capacity to back up the product,” he says. “If you’re working with people who are working out of their garage, and they give you a 90-day or a six-month warranty, what good is that warranty if they don’t have the ability or the capacity to take care of the issue? Also, anyone you’re buying used equipment from should be willing to give you your money back if you’re not satisfied.”

You may also want to make sure that the company has a good relationship with the manufacturer. “For example, if Alcon or AMO has an issue with a piece of equipment, and I have sold that piece of equipment to a doctor, I need to have a good relationship with AMO and Alcon to ensure that the doctor is treated fairly.” Mr. O’Donnell says. “I can call the manufacturer and ask them to send their service engineer into the doctor’s office to fix the equipment and to send me the bill. AMO’s engineer is in my office constantly refurbishing their equipment to make sure it’s up to spec. My guarantee is that any product I sell will meet manufacturers’ specs.”

When choosing a used ophthalmic equipment dealer, he recommends that doctors ask the following questions:

Mr. Wheaton agrees that packaging is important and recommends being wary of a company that ships in cardboard boxes. “When products are delivered from us, they look brand new, and they are boxed like they are brand new. The accessory items and manuals are almost always included,” he adds.

“Many brokers will not give you serial numbers so that you can check out the product,” Mr. O’Donnell says. “You should be able to access serial numbers and manufacture dates and be able to call the manufacturer to see if they will support that piece of equipment.”

Mr. Wheaton calls working with the manufacturer a win-win for both parties: The used equipment companies work hand-in-hand with manufacturers and help them support the new sale. “There are doctors who are only going to buy new, and there are doctors who are only going to buy used,” he says. “Why not let them buy used and present it in the best way possible? If a manufacturer’s name is on the product, it’s going to be re-sold with or without their blessing. Why not have that product represented the best it can be? This means servicing it, rebuilding it like brand new and providing a warranty and phone support.”

He explains that every time a used piece of medical equipment is placed in a doctor’s office and the doctor is happy with the product and the company that sold it, this helps the manufacturer.

These used medical equipment companies that have relationships with manufacturers also provide equipment installation and training.

“We send in a certified installer and trainer to train your staff, and everything is tested in our facility before it is sold,” says Tony Genovese, owner of Enhanced Medical Services. He explains that there should be trust on both the part of the doctor and the dealer. Although the doctor should put down a deposit on the equipment, there should be a remaining balance that is not paid until the product is in the doctor’s office and he or she is happy with it.

Mr. Genovese recommends asking about the dealer’s service policies. “We often use service technicians that have been certified by all manufacturers and are now independent. We can usually repair things with a three-day turnaround time,” he adds.

 

In addition to the lower purchase price, used medical equipment has several other advantages. Reimbursement for a procedure is the same whether you are using new or used equipment, so you can recoup your initial investment faster. Additionally, purchasing used equipment carries the same tax advantages as purchasing new equipment.

Because of these benefits, the used medical equipment business is growing, and certain products are in short supply. “One of the main challenges of the pre-owned equipment business is continuing to find the product to sell. We have built a very solid reputation for quality, and because of that, many customers are willing to go on a waiting list,” Mr. Wheaton adds.