Delineating category meanings an art as well as a science

When it comes to understanding the terminology for pre-owned, remarketed, secondary or used equipment, the differences and distinctions between categories or types can be thin, gray or completely misunderstood.

Why? Oftentimes, used equipment terms can be used interchangeably, which is a grave mistake that can lead to surprise, disappointment or complete annoyance on the part of the clinician once he or she flips the on-switch.

Here’s how key executives in the used equipment industry segment draw the lines between "as-is," "rebuilt," "reconditioned," "refurbished," "remanufactured," "pre-owned," "remarketed," "secondary" and "used."

"Some of these terms are synonymous, but there is unfortunately no recognized standardization," said Tony Richardson, marketing director, OSI-Oncology Services International, Ramsey, NJ.

As is means equipment is sold in the condition it was acquired, warts and all, buyer beware. Often brokers offer major equipment as "as-is, where-is," which means the customer has to pay to de-install it, transport it and re-install it, he said.

Rebuilt, as well as reconditioned and refurbished implies that the seller has gone through the unit and made sure it functions correctly and is clean, and maybe cosmetically refinished. But with medical devices it should not involve changing the performance in any way from the way the original designer had intended, and which was given regulatory approval to be marketed. Always ask for a list of what is done to rebuild the unit, according to Richardson.

With medical devices, remanufactured can be critically different from refurbished in that the unit might be redesigned with some different components and functionality, he noted, but if so it should be under [Food and Drug Administration Good Manufacturing Practices] design control and the subsequent remanufactured unit should comply with any FDA 510K marketing approvals.

"‘As-is’ or ‘as-is, where-is’ transactions are recommended only for centers that are fully equipped to take on the risks and costs associated with buying used equipment," said John Vano, president, Radiology Oncology Systems Inc., San Diego. "We recommend these types of sales to centers that have a lot of equipment and parts support already, and that have their own dedicated engineering staff to address problems that can emerge during the installation. As-is transactions are common when equipment is sold from facilities or brokers to independent service organizations. ISOs carry parts inventories and have the engineering staff capable of handling problems that can emerge."

Vano indicated that rebuilt is an expression that he hears rarely used in the medical equipment world. In fact, he likens it to meaning the same as remanufactured.

Reconditioned is an expression that refers to a machine that is lightly refurbished and/or cosmetically enhanced, Vano continued. "A strong running system with little need for repair that can use a cosmetic enhancement would be sold as a ‘reconditioned machine.’ This is a popular term in international markets where clients are averse to spending a lot on refurbishment solutions but want machines that look new when they are installed. In many of these markets, engineering labor is so inexpensive that having dedicated staff to repair and service equipment on an ongoing basis is not a major concern. Hence they are less apt to invest in a refurbishment or remanufacturing solution."

Vano noted that refurbished equipment represents a very broad classification. "The refurbished process can be as basic as a ‘basic wear parts replacement and cosmetic enhancement’ to a full-blown ‘remanufacturing process,’" he said. "We offer several versions of refurbishment packages for the different machines we sell, and we encourage our customers to evaluate and assess each one. One benefit of paying up front for an extensive refurbishment is that it can significantly reduce the service/warranty expenses and downtime. For example, we recently reduced the price of a two-year warranty contract by close to 50 percent since the customer elected to have an extensive refurbishment done to their machine."

The remanufacturing process is reserved solely for original equipment manufacturers or FDA-approved remanufacturing providers, according to Vano. "Remanufacturing is a very expensive project that entails replacing all the major components of a system with brand new components," he said. "With the constant supply of used equipment in the market, it’s often cheaper to replace an entire unit with a newer, used/refurbished unit, than it is to remanufacture a unit. A remanufacturing solution is useful for sites that need to replace their equipment but find it difficult to do so. For example, a site that has performed extensive construction or remodeling over the years might find that it’s now impossible to move a machine out of a vault to replace it. In this situation, a complete remanufacturing can extend the useful life of the machine for many more years."

With more than a decade of dedicated ISO experience, Bob Mighell, co-owner and president, World Medical Equipment Inc., Marysville, WA, fully understands the subtle and not-so-subtle nuances in categorizing used equipment.

"As-is would denote a piece of equipment that has been removed from service to be sold without any service being done to it or without any warranty," he said. "Rebuilt, reconditioned and refurbished usually designates bringing a piece of equipment back to the original manufacturer’s performance specifications. Within that group the quality and depth of the work done can vary significantly.

"The FDA defines remanufacturing as significantly changing a device’s performance or safety specifications," Mighell continued. "If a vendor claims to be a remanufacturer, the smart buyer should ask the following important questions: What was changed? Was the change properly registered and approved with the FDA? Does the vendor have adequate liability insurance comparable to the Original Equipment Manufacturer (OEM)? Some vendors use the term remanufactured to designate a more thorough refurbishing job without realizing the FDA implications."

As is systems are typically de-installed from a customer site and shipped directly to the buyer, according to Knut Fenner, vice president and general manager, Siemens Proven Excellence Refurbished Systems Division, Siemens Healthcare USA, Hoffman Estates, IL. "Nothing has been done to these systems, which often leads to major quality problems for the new owner since these types of equipment might have major technical flaws," he said. "Warranties are not available. The Siemens Proven Excellence program does not offer as-is equipment and would not recommend the purchase of such equipment to its customers."

The terms rebuilt and reconditioned indicate that the piece of equipment has gone through some type of cleaning and repair, Fenner noted, but cautioned that the quality of the work performed as well as the depth of the process varies greatly. "Only an OEM-refurbished system has gone through a detailed refurbishing process, including hardware and software upgrades and is guaranteed to have passed system tests, performing up to original performance specifications," he stated.

"Refurbishing a system means bringing the system back to the same performance specifications as the original device," Fenner said. "OEM-refurbished refers to a program that is provided by the Original Equipment Manufacturer – like the Proven Excellence program by Siemens. A previously owned system undergoes a refurbishment process which ensures that the system is restored to the same quality and performance specifications as the original system – using original OEM parts, test equipment and procedures."

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