JUL-AUG 2015 ISSUE

Editorial Board Forum: Acquiring Devices Successfully

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How much do you weigh market saturation when investigating in devices?

Jonathan Sykes, MD: The more that a given procedure or service can be individualized, the less important is market saturation. Companies that sell devices are interested in selling more devices and not interested in physicians individual success with the device.

Julius Few, MD: I think market saturation is a factor when a given technology is over-commoditized and down-valued. When this happens, our consumers assume there is little room for customization and it becomes analogous to a drive-through car wash. Fortunately, much of the available technology continues to evolve, even if it has been in the market for a while, largely because of innovative minds. 

Sabrina G. Fabi, MD: As a practice we don't worry about market saturation because the device is only as good as the person administering the treatment. Not all practices may have a physician administering the treatment with same level of knowledge or experience with the device. I believe that there is enough business when there is patient demand and a device with sound science to support efficacy and safety.

Julie Woodward, MD: I think that it is also important to look at the laws of the state that you live in. North Carolina is the most lax state in the country when it comes to who can operate a device, so we have IPLs and hair removal all over the place. Also medical directors can be in another city.

Jason Pozner, MD: I am an early adopter, so not really an issue for me but I get a lot of questions from docs seeking equipment. I always tell them to do a competitor analysis. For a small office its very important but in a large office with multiple providers—less so.

Jeanine Downie, MD: I do worry about market saturation. If everyone has the same device then I am not interested in also purchasing the same device. Due to people undercutting the costs of cosmetic procedures, this does not make economic sense to me or my practice.  

Paul Carniol, MD: Devices can be separated into different catergories, including “must haves” and “might be a good addition to the practice.” For each practice, this will vary, depending on multiple factors.

If a device falls into the “must have” group then market saturation should not deter the acquisition of the device.  Alternatively, if it falls into the “might be a good addition to the practice” group then market saturation becomes a more important issue, in terms of the economics of paying for the device.   

Brian Biesman, MD: I feel that market saturation is a bit of a double-edged sword. If nobody else has something, fewer consumers are aware that it exists. If too many have it, the technology rapidly becomes too saturated, the treatment rapidly becomes commoditized.

Download the Modern Aesthetics® App to read about Dr. Joel Schlessinger's lessons learned about market saturation and fat reduction.

When evaluating/negotiating a new device for your practice, what are the top three things you need to see?

E. Victor Ross, MD: Price. Efficacy. How many people I see will need it.

Dr. Sykes: Many practitioners think about how much money a device will make their practice. In my opinion, if a device is efficacious, safe, and provides value to the patient, the device will be successful in your practice.

Dr. Woodward: Efficacy is important, but I have one device that I don't feel works particularly well; the presence of that technology has driven patients into the office that then sign up for other procedures.

Dr. Carniol: Is the device efficacious? Does the device fit into the practice business plan? What are the finances related to adding that device to the practice?

This is an important consideration, which should be carefully analyzed. With Eric Jutkowitz we previously published a paper on this in Facial Plastic Surgery, which includes tables to assist in making this important decision.

Dr. Downie: Innovation. It must be a good fit for my practice. And it has to have a clear return on investment.

Joel Schlessinger, MD: The most important is the number of practices with that product/device in our area and the results in trials, preferably by investigators that I know and trust. I will often check out the device with friends or colleagues and usually try to find a non-speaker/KOL for the company if possible as they won't be as biased.

Dr. Pozner: Efficacy. Efficacy. Efficacy. Price a bit!

Dr. Fabi: Patient demand…A device with science to support both safety and efficacy…A company that offers practice support and recognizes it is more than just a sale to meet a quota, but a sale that starts a partnership.

Jeannette Graf, MD: I have been very disappointed when I have purchased devices since there are so many hidden costs they never tell you about. 

I have been in situations where companies were sold and the new company stopped making tips for what I needed.

I look at my practice as a solo practitioner who travels a lot during the year so I am very picky about what I will buy (my preference is performing injectables). Now, I rent my lasers and I am quite satisfied since I primarily do hair removal, IPL, and resurfacing.

Brooke Jackson, MD: Companies seem to be sold more and more frequently. Once the technology is deemed a good fit and you may be choosing between two companies, often the icing on the cake for the sale is the reputation of the company either with past  personal dealings or those of respected colleagues. However, once the company has been sold things do change, particularly with the level of service (on a paid service contract!) which is often frustrating and disappointing.

Consumables: Yay? Nay? Maybe?

Dr. Fabi: I am not opposed to consumables if a company can demonstrate the value in them...such as marketing support, practice support, educational support, research to support new indications, etc. I believe that consumables keep companies engaged in a partnership with practices, and it becomes a win-win for both parties when the consumable is reasonably priced and the company's engagement is high. 

Dr. Downie: I hate consumables. When devices have expensive consumables, I will sometimes stay away from purchasing those devices.

Dr. Few: I agree with Jeanine Downie, I prefer technology without disposables but one must look at the entire picture. We have to look at how many times someone has to have a given treatment to yield the end goal vs. opportunity lost by holding a room hostage from our filler patients.

The bottom line: it is crucial to consider patient diversity when looking at a given technology, many patients are willing to look at disposables as a needed variable and it actually better justifies premiums that are expected financially.  

Dr. Schlessinger: Consumables are a fact of life but there is a point where they go from reasonable to outrageous…I carefully calculate the cost of consumables and take a pass if they are too high.

Dr. Woodward: Expensive consumables wouldn't be a problem if the device really works consistently well, because it is difficult to give a gratis touch up to an dissatisfied patient when the consumable is expensive.

Dr. Carniol: Consumables/maintenance contracts/ marketing add to the cost of acquiring/using the device as described in the Jutkowitz, et al. paper.

These costs should be included in the financial decisions related to the device.

Dr. Pozner: I disagree with some of the others on this. I don't mind consumables. It all depends on price point of the device. When a cheaper device with consumables is obsolete it's not as big a deal—the device is often paid off quickly. I am not a fan of expensive devices with high consumables.

Dr. Biesman: While no one loves consumables, I do understand the need in order to generate secondary (or even primary) revenue stream for the manufacturer. The manufacturer becomes vested in its users being successful and that can be important.  In the big picture it is important to have industry partners that remain viable and committed to helping their customers grow their business.   

Can you share some knowledge gained from divesting a device?

Dr. Carniol: We stop using devices when better technology is developed. Therefore we assume that over time devices/procedures will become out of date/less popular. We consider this analogous to modern computers. We incorporate this consideration into the decision to purchase a device.

Dr. Biesman: Anything that sounds too good to be true probably is. I believe that every device is really optimized to achieve a relatively limited number of outcomes in a certain subset of patients…I look for evidence-based information; if there are no clinical trial data or efforts to obtain such data, I am skeptical.

Dr. Sykes: I am very cautious about devices that have heavy upfront costs and ongoing consumable costs. I never want to get into a position of feeling that I will “push” a given procedure/service because I have purchased a given device and want to pay for that device.  

Dr. Schlessinger: I have traded in multiple lasers over time and have also transitioned from one to another over time. This is the natural cycle of these devices, so it isn't surprising… Don't expect huge returns and you won't be disappointed. On the other hand, do your best to invest in your staff and promotion to make any new technology succeed.

Dr. Few: Fortunately, I have not had to remove too much technology because I do a formal business plan for any given technology and refuse to be swayed by the emotional temptation to have the latest toy on the block every time. That being said, I do love the toys if they do what they are supposed to do!

Dr. Pozner: If it stays in the closet for six months without being used, it gets sold.

Don't buy at tail of device lifespan. Middle is safest bet. I agree with Julius Few on the business plan. Don't buy on emotion. n

Learn when to ignore “Conventional Wisdom” for device purchases. Download the Modern Aesthetics® app.

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