This report originally appeared in the November 2011 issue of DOTmed Business News

Medical chillers remove the heat generated during the use of machines such as MRIs and CTs. Different modalities require specific types of chillers in order to function safely and properly. But protecting multi-million dollar machines from meltdown doesn’t come cheaply.

New standard-style medical chillers weighing between 15 and 30 tons generally fall into the price range of $20,000 to $40,000, depending on the model, says Kim Bernard, a sales application engineer with Dimplex Thermal Solutions, a chiller manufacturer operating under the brands Koolant Koolers and Schreiber Chillers. Customized chillers can cost upwards of $70,000, she adds.



Maintenance is also expensive, generally running around $2,000 a year, according to Bernard. And for more complex machines, or for customers who choose extended warranties, that price can reach $3,000 to $4,000 annually.

The typical medical chiller lasts at least 10 years, Bernard says.

Sales in the sector
Sales in the market have been mixed. Dimplex Thermal Solutions said it was performing well this year. “We’re probably going to have two times the sales revenue this year as we did last year,” Bernard says, adding that the company’s international sales are also on the rise.

Similarly, Mike Marrone, president of Cold Shot Chillers, mentions that their sales have gone up since last year. The company sells chillers overseas through domestic OEMs. “In other words, if one of our domestic manufacturers—such as GE, or Elekta or Varian—is selling abroad, then we ship our machines internationally,” he says.

Johnson Thermal Systems, on the other hand, has not been so fortunate. Sheri Johnson, the company’s president, says that this year’s sales have been slower than last year’s, but she remains optimistic. “We’ve seen it increase in the last half of this year; we’re seeing it pick up quite a bit,” she says.

Turner Hansel, the vice president of Filtrine Manufacturing Company, says their sales over the past year have been unpredictable. “One week you’re up, one week you’re down,” he says. According to Hansel, Filtrine is considering the possibility of expanding their overseas market in the future.


For Chiller City, a refurbisher of medical chillers, sales have been nearly doubling every year for the past half-decade, says Andy Wylde, the company’s president. “[The refurbished medical chillers market’s] pretty recession-proof,” he says. “You’ve got a lot of big chains, big companies that operate a number of hospitals, and so once one of them finds you and realizes you’ve got the stuff they need, they put you into their purchasing database and then they all call whenever they break something.” Chiller City sells less than 5 percent of its chillers internationally.

Why buy refurbished?
The most obvious reason to purchase a used medical chiller is, of course, the lower cost. Another reason customers may be motivated to buy refurbished is for a quicker delivery time.

“I’ve had people call me at five o’clock in the afternoon wanting to know if they could send a courier to pick up a chiller that night,” says Chiller City’s Wylde. “Not very many people are going to do that for them.” He adds, “In the medical industry that sometimes makes all the difference in the world; to get the stuff delivered as fast as possible.”

Recent trends
One of the biggest trends in the sector—similar to that of any business in the current economy—has been the growing amount of customers who are looking for opportunities to save money. One way for them to do that is to seek out a high-quality chiller that will provide them with as much operating time as possible.

“Uptime is extremely important to [customers],” says Filtrine’s Hansel. “If an MRI is down, they’re losing money and that’s a lot of money. It’s not just an inconvenience; it hits the bottom line. So people understand that you can buy cheap and possibly save money today, but [you will] lose money tomorrow.”

Wylde says that the biggest trend he has noticed is the market’s lack of available spare parts. “Everybody’s trying to cut costs, so the easy way to cut costs—at least in the near term—is not keeping spare parts for anything on hand like they used to,” he says. “So when something breaks, they’re just frantic to try and replace it.” As a refurbisher, this trend has been beneficial to Wylde’s business.

Cold Shot Chillers’ Marrone has noticed that more and more customers seem to want their chillers to be hooked up to building management software, a computerized system that controls and monitors a building’s electrical and mechanical equipment.

Going green is the way to go
In recent years, the chillers sector has been shifting toward more environmentally friendly technology. “Energy efficient stuff is definitely at the forefront of everybody’s mind in the market,” says Johnson Thermal Systems’ Sheri Johnson.


One of the most popular ways that chillers are becoming more energy efficient is with an economizer, which uses free cooling. “When it’s cold outside, we don’t have to spend a bunch of money running a refrigeration system to make 45 degree water when it’s 20 degrees outside; you let the air do it,” explains Jeff Johnson, vice president and sales engineer for Johnson Thermal Systems.

According to Hansel, with the use of an economizer, Filtrine Manufacturing Company is able to save at least 10 percent for every 10 degrees that the temperature drops outside. “We’re able to save a fair amount of energy on a single, small chiller for the customer using the ambient, lower temperatures outside as the temperatures cool down,” he explains.

Vendors are also going green by using higher-efficiency fan systems, pumps and compressors, which are the three primary energy users in a chiller, according to Bernard. Chiller manufacturers can also be more environmentally conscious by designing systems that use the least amount of refrigerant possible, says Jeff Johnson, who mentions that his company uses propylene-glycol antifreeze, which is virtually non-toxic.

Seismic certification
Depending on the state, seismic certification is becoming increasingly important to the medical chillers sector. “California has started with the biggest increase in those seismic requirements,” says Sheri Johnson, who predicts that these regulations will eventually spread throughout the rest of the country. “Being able to keep your equipment safe during an earthquake is a big deal because it’s a big investment, and [customers] want that stuff still up and running,” she says.

According to Bernard, the entire medical model line of Dimplex Thermal Solutions has gone through seismic shake tests and was approved for OSHPD, California’s seismic certification preapproval program. “This means they can not only sustain an earthquake without tearing apart, [or having] things falling off that could injure people if it fell off a roof, but are also still operational after going through an earthquake,” she explains.

“Of course in the medical field, when you’re doing MRIs and that type of thing, if you have an earthquake where there might be a lot of injuries, these pieces of equipment need to be operational so that the doctors can diagnose and help to take care of these injuries,” adds Bernard. “So it’s a big deal to still be able to have everything in your hospital operating.”

The medical chillers sold by New Hampshire-based Filtrine Manufacturing Company have also been seismically tested to determine where their center of gravity is.

In Texas, where Cold Shot Chillers is located, seismic requirements are not as high a priority. “We haven’t really seen a whole lot of specifications for earthquake [requirements],” says Marrone.

Challenges
“Price point is always a challenge,” says Bernard. “It’s always a good balancing act between giving all the features that they give you, the exceeding quality and reliability factor, while keeping it within a price range tolerable to a customer.”

Hansel says finding business in the United States is one of the biggest challenges facing his company. “There are a lot of jobs out there that get started; you quote them, and then they sit and sit and sit, waiting for it to get started,” he says. “Then sometimes they never do get started, they just don’t pull the trigger. They’re not sure they’re ready to go yet with the economy up and down.”

Refurbishers face the difficult task of delivering products to the customer as quickly as possible. “Delivery time seems to be everything,” says Wylde. “Nobody wants to wait, and that creates a lot of stress, trying to get the stuff shipped out and making sure it’s good to them.”

Jeff Johnson mentions the difficulty of educating customers on the importance of properly maintaining their equipment, while Marrone says it’s a challenge to provide adequate support for the sector, as customer demands are on the rise.

Slow but steady growth to come

“I don’t see that there are going to be many changes here in the U.S.,” says Hansel in reference to the future of the medical chillers sector. He instead suggests that slight changes may occur overseas, in terms of what type of chillers will be in demand.

Jeff Johnson forecasts that medical chillers will continue to become larger, more complex and increasingly powerful— much like the imaging systems they are created for.

“It’s going to follow the same trends as your medical equipment does, so you should see annual growth at a steady but slow pace,” predicts Bernard.

DOTmed Registered 2011 Chillers Companies

Names in boldface are Premium Listings.
Domestic
Andy Wylde, Chiller City Corporation, AZ
Sheri Johnson, Johnson Thermal Systems Inc., ID
Kim Bernard, Dimplex Thermal Solutions, MI
Marshall Shannon, Image Technology Consulting, LLC, TX
DOTmed Certified
DOTmed 100

International
Imad Muati, IMC, Syria
DOTmed 100