(FORTUNE Magazine) – A DOZEN OR SO companies are bringing computer-aided design--the technology engineers use to fashion cars and airplanes--to the practice of medicine. Through the magic of CAD, as it's called, doctors can now manipulate three- dimensional color images of complex bone fractures or tumors tucked deep in the brain. Since these images can be cut apart and put back together on the computer screen, a surgeon can simulate an operation before performing it. Some doctors are even using CAD to design and make artificial bones. Two technological leaders in the field are Contour Medical Systems of Mountain View, California, and Phoenix Data Systems of Albany, New York. Their systems are being used in hospitals affiliated with New York University, Stanford University, and the University of Wisconsin, among others. Both private companies started selling their products last year. First off the mark, Phoenix says it has sold 15 systems at $500,000 each. Contour, with a slower and cheaper ($175,000) system, has several out on trial and has sold one.

In recent years the development of equipment such as computer-aided tomography (CAT) scanners has given doctors a good look inside the body. But the pictures show only thin slices of, say, a hipbone; trying to see a whole hipbone is like trying to picture a loaf of bread by looking at each slice. To create a three-dimensional image, CAD systems in effect stack the slices together. A pile of 50 or so CAT pictures will generate a true picture of an entire skull on the CAD screen. The surgeon can look at the image of a damaged skull and turn it to any angle. Knowing exactly how it is broken, he can then practice cutting and moving bone fragments back into place. This saves critical time and mistakes on the operating table. Contour uses CAD to custom-design and manufacture artificial bone for sections of the skull, where implants can be made because they are subject to less pressure than, for example, the bones in a limb. Without CAD, a surgeon repairing a shattered skull takes part of the patient's hip or rib, painstakingly whittles the new piece, and then implants it. Recently a doctor at the Palo Alto Medical Clinic used a Contour system to design a three-by- five-inch piece of skull for a young woman. The computer translated the design into a computer tape, which was sent to Contour's factory and fed into a machine that produced a mold. Within a day the surgeon had a silicone ''bone,'' which he placed successfully over the girl's damaged skull. Speedy operations are salve for the patient on the table and the family in the waiting room. But the clincher in the sales pitch to hospitals is that the new systems make surgical facilities more productive, and hence more economical.