Rapid Rise and Fall for Clinics That Market Scans to Patients

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.

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.

It shows the limits of direct-to-consumer advertising and the power of dissuasion by professional societies, which warned against getting one of these scans. The tests, they said, would mostly find innocuous lumps in places like the thyroid or lungs, requiring rounds of additional tests to rule out real problems, and would miss common cancers, like those of the breast.

It also shows the workings of the medical market - when insurers refused to pay, requiring customers to dig into their own pockets for the tests, scanning centers found themselves cutting prices to compete. Within a year, some centers said, prices fell to less than $500 from $1,000 or more.

And when the flow of patients began to slow, the combination of low prices and reduced business spelled doom. It turned out that the assumption by radiologists - that people would be willing to pay for early detection by scans and that there was a huge market waiting to be tapped - were not true.

The scans were something new in American medicine - not like traditional screening scans, mammograms or colonoscopies, for example, in which patients are overseen by their doctors. People requested these scans on their own. They paid on their own, with no hints that insurers would start picking up the bill. And the reports came to the customers, not their doctors.

Some proponents said the scans would enable people to take their health care into their own hands. Critics said the scans were medical nightmares, a powerful medical technology gone out of control.

But few anticipated the precipitous reversal of fortune for the scanning centers.

In Seattle, Dr. Scott Ramsey of the University of Washington got a federal grant to study patients at nine centers, expecting to enroll 1,500 patients. Last year, when he was ready to begin, only two centers were left, and he enrolled just 50 patients.

He also hoped to do a study with a company, ScanQuest, on the scans' effectiveness. "We were in negotiations when they suddenly stopped returning our phone calls," Dr. Ramsey said. It turned out that ScanQuest had gone out of business.

"I've never seen a market for a medical technology collapse so completely," Dr. Ramsey said.

Whole body scans erupted onto the national scene in 2000, helped in large part by Dr. Harvey Eisenberg, the owner of HealthView, a scanning center in Newport Beach, Calif. Oprah Winfrey, scanned there, featured him on her show, and his competitors watched with interest as he got attention on morning shows like "Good Morning America" and "Today" as well as in newspapers and magazines like USA Today and Men's Health. Soon, HealthView's waiting list grew to eight months.

The HealthView Web site quoted Whoopi Goldberg ("The most comprehensive health exam that exists. I love them.") and William Shatner ("I'm sending everyone I know."). And the site told how the concept worked: a person could call and make an appointment and have a simple 15-minute scan, while lying fully clothed on a table.

The powerful X-ray scanner could look inside the entire body, "from the neck to the pelvis," the advertisements said. "Almost all diseases uncovered at asymptomatic stages can be modified, reversed, or cured," HealthView promised. Those whose scans found nothing amiss could have peace of mind.

Soon, competitors opened their own center, CT Screening International, just across the street. Dr. Michael Brant-Zawadzki, a radiologist who was medical director there, remembers those heady days after the center opened in 2001.

"The place was jammed," Dr. Brant-Zawadzki said. "We had a waiting list, and we were competing with the poster boy of whole body scanning."

In just two years, CT Screening International had grown to a national chain. "It was a very big operation, and it was an enormously rewarding operation," said its chief executive, Dr. Richard Penfil.

The business also appealed to radiologists who normally send reports to doctors but have little contact with patients. At the scanning center, though, Dr. Brant-Zawadzki sat down with patients and discussed their scans. "It was very pleasurable," he said, adding that "it also promoted the value of radiologists to those patients."

Dr. Carl Rosenkrantz, a radiologist in Boca Raton, Fla., said the business had another appeal - it promised radiologists a good living without being on call at a hospital and even without necessarily being present at the scanning center.

"The goal in life seems to be to try to figure out some way where you don't have to go to the hospital, where you don't have to take calls," Dr. Rosenkrantz said. "Radiologists saw this as a cash business and a way out."

Academic medical centers also got into the business, including Beth Israel Deaconess Medical Center at Harvard, which opened Be Well Body Scan. The center is owned by the Beth Israel Radiology Foundation, a nonprofit organization that supports the hospital's radiology department.

Dr. Max Rosen, medical director of the scanning service, says he has saved lives, finding a lung cancer at a stage when it could be removed, he says, and a heart problem that led to a bypass operation.

At Yale, Dr. Howard Forman, an associate professor of diagnostic radiology and management, said he had felt pressure from hospital administrators to explore the possibility of offering whole body scans to healthy people. He could see why. "From a profitability standpoint, you would go in this direction." But he and his colleagues resisted. "There is no evidence that the scans are good medicine," Dr. Forman said.

Dr. Barnett Kramer, director of the National Institutes of Health's office of disease prevention, said: "For every 100 healthy people who undergo a scan, somewhere between 30 and 80 of them will be told that there is something that needs a workup - and it will turn out to be nothing."

The same arguments were made by the American College of Radiology and the Food and Drug Administration.

Radiologists at scanning centers protested. It may not be proven that scans save lives, but on the whole, they said, the benefit of finding something like cancer early outweighs the problem of finding harmless nodules and having additional tests to rule out disease.

But that is not how the scans were portrayed by professional societies, the scanning center doctors say.

"We were perceived as charlatans, bilking the population," Dr. Brant-Zawadzki said. He was chagrined, he said.

Dr. Edmund Lundy, director of the Health Test Scan Center in Boca Raton, says his center is one of the few in his area still in business. The trick, he said, is to market to doctors, persuading them to send him patients. When doctors do the referring for diagnostic purposes, health insurance often pays, he adds.

So Dr. Lundy sponsors seminars for doctors and hired former drug company representatives to visit them.

"I think there's a real place for doing this," Dr. Lundy said of the scans. "And I think there's a population that wants to have it done. It's a question of who's going to pay for it."

Be Well Body Scan at Beth Israel has also stayed in business, even though it sees just 25 patients a week, not nearly enough to make a profit, said Dr. Rosen, its director.

"We don't want to lose money, but we don't have stockholders; we don't have investors," Dr. Rosen said. When he is not using the scanner to screen patients, he said, he uses it on patients who need diagnostic radiology.

Dr. Eisenberg, the man who scanned Ms. Winfrey, has a new company, Body Scan International. These days, instead of seeing patients in an office, he takes the scanner to them, operating out of a van that, on a recent day, was parked in a rundown parking lot beside a runway at John Wayne Airport in Irvine, Calif.

Dr. Eisenberg was unavailable for an interview, but one of his employees, Don Ark, said that since last May, the van has gone to two sites, an Indian reservation and an electrical workers' union.

As for Dr. Giannulli, he has moved on to other things. He founded a company, CareTools Inc., which sells software for medical record keeping to doctors' offices. That, he says, is the new frontier in medicine.

These diagnostics were not just marketed to those who self paid. I have several elderly neighbors who underwent scans on the orders of their Doctors and it was paid either on their Insurance or through Medicare.

The owners of the CT Scan clinics? You guessed it, the same Doctors who prescribed the procedures in the first place. BTW The scans didn't show anything, as expected, but cost the taxpayer about $2,000 per.

It ended abruptly with the wholesale shuttering of businesses

This is the beauty of capitalism. If this had been a govt. program, it would have gone on and on with the motto being "if this saves only 1 life, it is worth it"

I noticed the ones still in business are the ones who figured out how to bill insurance or the government.

a simple 15-minute scan, while lying fully clothed on a table

"We detect an engorged wallet. Immediate excission is required."

Yeah, better to have the hubble telescope inserted into one's neathers, or a digital rectal exam....oops those don't really work do they.

The idea of being able to diagnose everything early, with a simple process is anathema to some parts of the medical community. Why cure when you can treat.

As to the market taking care of this, all that gear and software is going to get cheaper. 1K per scan sounds a bit inflated. At some point, medicine is going to have to realize it is a service industry with no more expectation of government suport than any other.

Top sends

New scanners with much higher resolution and faster speed are coming to market. They will decrease false negatives and further increase the capability to diagnose heart problems as well as cancer.
As a recent cancer survivor..I get a scan every 6 months to detect any possible re-occurance. The Dr. told me it would also be an excellent screening for any new form of cancer that attacks me.
A scan earlier would have made my survival even more certain. The new scans will be cheaper due to speed.

Let me get this straight, doctors don't want to be at the hospital? They need to get another line of work.

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