low key 2010 rsna: pointing to a year of low growth in us medical imaging?
DESCRIPTION
Frost & Sullivan analysis of the medical imaging market.TRANSCRIPT
Low Key 2010 RSNA: Pointing to a Year of Low Growth in U.S. Medical Imaging?
Nadim DaherSenior Industry Analyst, Medical Imaging
Dec. 7, 2010
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Agenda
PET-MR CT MR Radiography (CR, DR, Tomo) Imaging Informatics
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Breakthrough Innovation: Hybrid PET-MR
• Siemens and Philips simultaneously showcase new hybrid PET-MR system (510k pending) – the result of many years of R&D in Europe.
• Systems are installed and operational at a handful of luminaries in Europe. • Radically different approaches to system architecture:
• Philips’s system combines a PET system on one side and a 3T MR system on the other side, with the patient bed in between. Hybrid imaging is obtained through post-processing registration.
• Siemens’s system integrates the two modalities in one gantry, allowing for simultaneous PET and MR imaging.
• The two companies are taking on a different approach to the market: Philips will first be targeting Oncology, while Siemens will start with Neurology.
• The two systems also have different price points: Philips’s system will be listed at ~$4 Million, while Siemens’ system will be listed at no less than ~$6 Million. System installation will require an extra $1+ Million for construction (shielding, etc.)
• No viable reimbursement / business model for this new modality at this point. The large research academic facilities will constitute the primary customer target in the first phase for clinical investigation.
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CT: Dose, Upgrades… and more Upgrades
• RSNA 2010 marks the official end of the “Slice Wars”. Now that the “premium segment” has been the same for the 3rd year in a row, slice count was virtually absent from the vendors’ marketing messages.
• Greater emphasis was put on Dose reduction and optimization. The vendors recent R&D efforts in that area are paying off today: dose has been reduced significantly for most advanced and routine CT exams.
• Marketing battles continue around the percent dose reductions achieved, however less than in 2009. Marketing competition is shifting to the vendors’ their longer term goals in that area, to bring dose for all procedures down to 1-2 mSv. Also targeting more “Contrast efficiency” for contrast-enhanced procedures.
• From a business standpoint, dose reduction consists of software/hardware upgrade packages priced over $150k, targeting the vendors’ installed bases.
• Vendors highlighting the cost-efficient upgrade paths from 64-slice or 128-slice to higher configurations, which in effect reduce their revenue opportunity and make for a more complex business model.
• More upgrades: For GE customers, one way to improve image quality and dose efficiency is to invest in a large, expensive server cluster that does heavy lifting post-processing.
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MR: Affordability and Dedicated Systems
• Similar to CT, the ‘premium’ segment in MR, 3T MRI, remains unchanged for the third year in a row (and probably for several more years).
• All major manufacturers now offer a 3T MRI system with no hint at commercializing higher field magnets (e.g. 7T) for the clinical market (outside pre-clinical)
• Wide-bore MR systems and open-MR systems used in bariatric and MR-guided procedures seem to become more commonplace. Philips launched a new MR that is allegedly the first “digital MR” system, but the benefits are yet unclear.
• Marketing messages revolved around the MR imaging workflow and how to allow for a higher patient throughput. Integrated coils are also used to that end.
• Pricing pressure has continued if not accelerated during the current year: In MR, 1.5T systems are now priced at slightly more than $1 Million. Dedicated scanner configurations make the modality even more affordable.
• Similarly in CT: 64-slice CT remains the most popular CT configuration, is now listed under $1Million, with customers not necessarily going for fully features configurations.
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Radiography: Wireless, 3D Tomo
• Wireless CR goes mainstream and makes a bigger hit than on its first year: First Carestream, now Canon, soon also Fuji.
• DR retrofits and DR systems from smaller players lowering the price differential compared to CR.
• More advances shown in DR, such as high-resolution and wireless DR.
• 3D Breast Tomosynthesis slowly becoming a market reality. Hologic, Siemens (and others?) expecting FDA approval soon.
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Informatics: Workflow Beyond PACS, Meaningful Use
• Front-end PACS applications subject to minor improvements, no breakthrough.• RIS systems show low profile, while reporting and dictation take more center stage.• By now almost every PACS vendor has developed the 3D capabilities of its own PACS.
While these still lack the breadth and depth of the third-party advanced visualization solutions, they are sufficient for the large majority of imaging procedures.
• By now almost every PACS vendor offers some type of a vendor-neutral or enterprise archive for the back-end, but most are shying away from the “VNA” terminology.
• In the margin of the PACS industry, small innovative companies (e.g. LifeImage, Poiesis) solving big workflow challenges.
• CAD companies going beyond CAD applications and into wider workflow solutions spanning complete disease states or organ treatments.
• Clinical decision support for imaging and image sharing / image exchange focus more interest than in the past, now in light of HITECH and Meaningful Use.
• Very few RIS/PACS companies communicated about Meaningful Use at RSNA. Certification of some RIS or PACS modules is underway, but will require another year or so. The (undeclared) goal seems to be to target the second phase of stimulus funding, in 2013.
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Informatics: Mobility and the Cloud
• Mobility: Ubiquity of the tablet (iPAD/Android) at the imaging IT vendors’ booths – used to view patient reports and patient records (EMR) but also images – even 3D images using zero footprint thin-clients.
• These tablets viewed less and less as gadgets, and start to make it into the real life clinical workflow with better defined scenarios, guidelines.
• Thin-client PACS now ubiquitous, Web access much improved industry-wide and no longer a key differentiator for PACS vendors.
• “Cloud” a very hot topic at this year’s RSNA, in both aspects of the technology: not just cloud storage, but also cloud computing.
• Cloud storage, many storage vendors highlighted their cloud-based hosted services leveraging their remote data centers and used mostly for disaster recovery and business continuity.
• Cloud computing makes it way to medical imaging starting with the most data processing-intensive applications (CAD and advanced visualization). Two companies (TeraRecon and Biotronics3D) were highlighting such solutions that do not require customers to purchase any system on site.
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U.S. Market Implications
PET- MR a breakthrough new modality, but expect no short term impact on market growth
Major imaging modalities (CT, MR) continue to improve, but don’t call for a new round of capital investment
Price erosion continues across all tiers of products due to heightened competition
System upgrades will keep vendors and customers busy, but will not keep a large flux of capital flowing
Cost-effective modalities (CR, Ultrasound) continue to perform well in the market
Imaging IT market moves away from capital turnkey replacements and towards incremental ‘fixes’ or service based models
These trends point to a year of low revenue growth in 2011.
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For Additional Information
For Additional Information
Johanna HaynesCorporate CommunicationsNorth America(210) [email protected]
Carol SklossDirector of SalesHealthcare(210) [email protected]
Antonio GarciaIndustry ManagerMedical Imaging(210) [email protected]