Sometimes the market works

I first addressed this issue several years ago – On whole body CT scans and More on ‘body CT scans’.

Despite my keen observations, many investors (including physicians) invested in this technology. While they did make money immediately, apparently the business is no longer profitable – Rapid Rise and Fall for Body-Scanning Clinics

For a brief moment, Dr. Thomas Giannulli, a Seattle internist, thought he was getting in at the start of an exciting new area of medicine. He was opening a company to offer CT scans to the public – no doctor’s referral necessary. The scans, he said, could find diseases like cancer or heart disease early, long before there were symptoms. And, for the scan centers, there was money to be made.

The demand for the scans – of the chest, of the abdomen, of the whole body – was so great that when Dr. Giannulli opened his center in 2001, he could hardly keep up. “We were very successful; we had waiting lists,” he said. He was spending $20,000 a month on advertising and still making money.

Three years later, the center was down to one or two patients a day and Dr. Giannulli was forgoing a paycheck. Finally, late last year, he gave up and closed the center.

Dr. Giannulli’s experience, repeated across the country, is one of the most remarkable stories yet of a medical technology bubble that burst, health care researchers say.

It began as a sort of medical gold rush, with hundreds of scanning centers, with ceaseless direct-to-consumer advertising, and with thousands of Americans paying out of pocket for the scans, which could cost $1,000 or more.

It ended abruptly with the wholesale shuttering of businesses.

CT Screening International, which scanned 25,000 people at 13 centers across the nation, went out of business. AmeriScan, another national chain, also closed. So, radiologists say, did another company that put scanners in vans and traveled to small towns in the South.

The business’s collapse, health care researchers say, holds lessons about the workings of American medicine.

Whole body CT scans were never more than very high priced snake oil. One should never invest in a business which has shaky fundamental underpinnings.

We should carefully evaluate all new health care technologies prior to spending money to acquire or use them. Whole body CT scanning sounded intriguing. Face validity always helps when one considers adopting a new idea in health care. However, eventually (in this case 2 years) the promoters of that technology must demonstrate efficacy. Whole body CT scanning had no supportive data and thus no current business. And this is good!