Article

Purchasing Pre-owned Ophthalmic Equipment

You can save if you know how to buy.

Purchasing Pre-owned Ophthalmic Equipment

You can save if you know how to buy.

BY JERRY HELZNER, SENIOR EDITOR

Buying pre-owned ophthalmic equipment can be compared to driving up a twisting and narrow mountain road. It can be quite a pleasant experience if you are careful, but it can be big trouble if you are not.

This article will offer advice on purchasing used ophthalmic equipment so that you achieve significant savings and have no regrets.

The good news for buyers of pre-owned equipment is that the unreliable dealers who sprung up with the growth of the Internet have been largely weeded out in the past few years, leaving the field primarily to reliable and experienced dealers who use the Internet as one of several key tools to provide information, satisfy customers and earn repeat business.

"There are now about six to 10 major dealers in this country who have worked hard to self-police the business. We have even established a telephone hotline (863-660-8026) that customers can call if they have a problem with a dealer," says Jody Myers, owner of Florida Eye Equipment in Lakeland, Fla. "We also have established an informal network of experienced, reliable dealers who will often work together to help a customer find the specific equipment that a practice requires."

"There are very few practices that are telling me that money is no object when it comes to buying ophthalmic equipment," says Gordon Siteman, vice president of sales and marketing for Lombart Instruments, the largest distributor of ophthalmic equipment in the United States. "Everyone is looking at the bottom line and taking steps to maximize profitability. Practices are looking to obtain used equipment that has the same utility as if they were buying new. This includes such mechanical and optical items as slit lamps, phoropters, microscopes, chairs and stands."

Select Durable Equipment

Siteman says practices that purchase high-quality, durable mechanical and optical equipment such as the items mentioned above can save approximately 20% to 30% compared to buying new. However, he cautions against buying used automated equipment, where the technology is constantly evolving and rapid obsolescence is an issue.

"The best comparison I can make about automated ophthalmic equipment is to ask if you would want to buy a used computer," says Siteman. "I don't think most of us would do that."

Siteman says that the opening and equipping of satellite offices make up a significant part of the current demand for pre-owned ophthalmic equipment.

"Given the strong demographics that will drive increased demand for eye care as the baby boomers age, many practices are expanding by opening satellite offices, he notes. "However, they would like to limit their start-up costs for these offices until they see if the demand materializes. Purchasing used equipment is a good way to limit those costs."

Siteman says doctors who are seeking used equipment to create a new lane or outfit a satellite office may not be able to get all the brands and models on their shopping list.

"Quite often, they will wind up with a mix of new and used equipment because the good used pieces they want aren't always available," he says. "But the real goal is to satisfy your essential requirements with some degree of cost savings."

The opening and equipping
of satellite offices make up
a significant part of the
current demand for pre-owned
ophthalmic equipment.

Siteman, whose company sells some pre-owned ophthalmic equipment, says good sources of such equipment for dealers are trade-ins, practices that are closing due to retirement and foreclosures.

Demand is Strong

Myers started Florida Eye Equipment 18 years ago. He says his business is good, with the current demand for pre-owned equipment exceeding the supply.

"Our sales have doubled in the past 2 years," Myers asserts. "The quick evolution into next-generation ophthalmic equipment has created additional demand in areas such as optical coherence tomography (OCT)" says Myers. "Some practices feel that they must have the latest in OCT equipment. That means they will trade in a perfectly good OCT machine that another practice will be thrilled to get. The demand for used OCT equipment is tremendous."

While OCT represents a "hot" area of the pre-owned equipment business, Myers also sees strong demand for the durable, traditional products with long life cycles. Many of these items can be used for decades without becoming obsolete. Because of their durability, they tend to hold their value longer, making them somewhat less of a bargain than higher-tech equipment.

"We offer a 6-month warranty on everything we sell," he says. "We have three technicians here who recondition and service equipment and will send out surgical equipment such as phaco machines and YAG lasers, to be certified by factory-trained technicians."

A Six-point Checklist for Purchasing Used Equipment
1. Assess your equipment needs and preferences in relation to the budget you have available for capital expenditures.
2. Balance the lower initial cost of used equipment against the longer useful life, better warranty, parts availability and upgraded features that are often valid reasons for purchasing new equipment.
3. Deal only with reliable sellers who have an established track record and who can maintain any used ophthalmic equipment you buy.
4. Buy "used" only when the product will not quickly be rendered obsolete by changing technology.
5. Obtain a service history of any piece of equipment you are considering.
6. Be careful about buying any pre-owned equipment used in invasive surgical procedures. You could be held liable for problems caused by faulty equipment.

Earl Roseman, president of Belrose Refracting in Skokie, Ill., has been selling pre-owned ophthalmic equipment for more than 30 years. He agrees that business is good right now but sees the rapid advance of ophthalmic technology as a challenge to dealers' business acumen.

"The one thing you don't want to do as a dealer is build up an inventory of equipment that may quickly become obsolete," he says. "If the demand for a certain kind of equipment suddenly drops off, the dealer is stuck with it."

That's why Roseman is more comfortable dealing in the more traditional items.

"Some of the most popular items that are commonly requested by practitioners besides complete lane setups are chairs and stands, autorefractor-keratometer combination units, phoropters, slit lamps, automated perimeters and diagnostics," he says. "The demand today for reconditioned equipment is at an all time high, with managed care being a huge factor, malpractice insurance skyrocketing, office space and property prices increasing, plus the general cost to run a business. On mostly all of our refurbished instrumentation, the practitioner can save anywhere from 25% to 50% as opposed to buying new, with all items being completely serviced by are qualified technicians with our service department located on our premises."

Check Before You Buy

Reliable dealers agree that if you do intend to buy any piece of used equipment, there are several precautions you should take. First, make sure that the seller can service the equipment. The seller should have a direct link back to the manufacturer, ensuring access to the parts, service bulletins and schematics that will enable the equipment to be maintained. You should also get a service history of the piece of equipment you're buying. The more history you have, the easier it is to make an informed decision."

Roseman lists the types of questions he would ask of any dealer in pre-owned ophthalmic equipment.

"If I purchase my phoropter from you, do you completely dismantle the entire instrument and check everything including all powers, axis and prisms, or do you just sell as is? Do you at least clean the optics? Do you have your own service department doing the repairs and service? Will you come out and install and calibrate the equipment if I purchase from you? What is your guarantee?

Make sure the seller
can service the equipment
and has a direct link
back to the manufacturer.

"What if after 1 week the slit lamp malfunctions? Do you provide me with a loaner? Can you come to my office to do the repair? If parts are needed immediately, or even 2 years from now, can you provide them? Do you have a well-stocked parts department? Do you have a parts department at all? Can I lease the equipment? How long have you been in business?"

Myers was one of the first equipment dealers to grasp the potential of the Internet, setting up a Florida Eye Equipment Web site in 1994.

"There's no doubt that the Internet has facilitated our business and enabled us to generate international sales," he notes. "It also serves as a source of the used equipment that we resell. Doctors will list equipment they have for sale on our site, and many times, we'll buy it. We sell a lot of used visual fields, fundus cameras and phoropters. Phoropters really haven't changed in 20 years. Doctors are more cautious about buying pre-owned surgical equipment, but we do business in used microkeratomes and phaco equipment. We'll even put a buyer and seller together on an excimer laser, but we first get the manufacturer to recondition it and certify that it's operating properly."

Though the used equipment experts we talked to for this article may differ on some small points, they all agree that pre-owned equipment is a viable option for most ophthalmology practices — if you know exactly what you want and purchase from a seller who will stand behind their products. OM