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A potential Medicare initiative to review the utilization of imaging and capital purchase expenditures could cut into sales for Philip’s (NYSE:PHG) Brilliance 64 slice CT scanner, sources told Pharmawire.

In addition, the product could still run into reimbursement issues if a premium price is sought by Philips, a reimbursement expert said.

Philip’s Brilliance 64 slice CT scan has four times as many detectors as a typical multi-detector CT scanner. It can produce detailed pictures of any organ in seconds and can provide three-dimensional images, which include 3-D views of the blood vessel, according to the company website.

The Brilliance 64 slice CT can be used for neurological, pulmonary, cardiovascular, trauma and whole-body studies.

Yet Ronald Podraza, CEO of Reimbursement Principals noted that without a more concrete body of clinical evidence showing why the 64 slice scanner is superior to the alternatives, he would be surprised if any payors were willing to pay extra for the additional information.

Podraza pointed to an effort by the Obama administration to find areas in which significant savings in medical expenses was possible, and said imaging will almost certainly undergo a utilization review from Medicare. ”Apart from the usual capital issues, if I’m a hospital, and I know that if I buy this I’m going to have Medicare looking over my shoulder, it might make me think twice about that purchase,” he said.

Philips could not be reached for comment.

A hospital CFO who wished to remain anonymous agreed and said one of the areas where everybody is seriously looking to save costs is with imaging equipment. The CFO said after evaluating the 64 slice CT scanner, it was thought the hospital could afford to wait a bit longer before investing in the technology. The CFO said there was sentiment among some hospitals that less expensive CT scanners are sufficient with the economic climate being so uncertain, and with the price tags on these devices being fairly substantial.

The CFO also noted that this technology is constantly being upgraded and changing, so leasing CT scanners is being considered by many hospitals.

Frank Clark, vice president for information technology and CIO of the Medical University of South Carolina, said those hospitals that do no have a 64 slice CT scanner may not be adding one this fiscal year. He noted while hospitals may be holding off a bit longer, cutting edge technology such as the 64 slice CT scanner is still wanted. Clark added that he considered this to be a competitive device.

Clark said these large capital acquisitions or expansions are being looked at and scrutinized heavily by the board and leadership in hospitals. He added that many of the bigger ticket items along with high end scanners are being delayed and re-evaluated as hospitals across the country navigate the economic climate.

Prices for 64-slice scanners are falling materially as customers can buy efficient 16-slice scanners at almost half the price of a 64-slice, at half a million dollars or less, according to an analyst report that cites newsletter DI Scan.

A consultant in the space said he believed there would be a review of imaging as part of the effort to cut costs, and added that the Centers for Disease Control and Prevention (CDC) may also look into adopting new guidelines for the use of imaging in addition to Medicare’s likely review. He said that hospitals would likely be reluctant to purchase the 64 slice scanner until the issue is resolved, because of this uncertainty.

Philips also markets the Brilliance ICT, a 256 slice-CT scanner; as of the end of 2008, this device had been installed at an estimated 55 hospital centers.

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