Implementation of PACS Driving the Demand For Digital Radiography

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Web conference presentation on the implementation of PACS is driving the demand for digital radiography in European markets. Market overview, key challenges, revenues and trends.

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Implementation of PACS Driving the Demand For Digital Radiography

  1. 1. Implementation of PACS Driving the Demand for Digital Radiography Simone Carron, Research Associate Healthcare August 11, 2010
  2. 2. Focus Points Market Overview Key Challenges faced by DR and CR vendors Factors influencing and retarding growth PESTLE Analysis Importance of Product attributes to End-users Market Revenues Market Trends Technology Trends 2
  3. 3. Market Overview Radiology has witnessed a technological evolution in the past few decades with the development of newer imaging modality. The emergence of digital and computed radiography has altered the face of conventional radiography. There is a transition from film based systems to film-less systems and this is being fuelled by a need for improved work flow, productivity, efficiency and accurate diagnoses. Capital spending freezes and financial shortcomings delayed purchases of equipment in 2008-2009. However the DR/CR market has been more resilient than other imaging modalities largely because an estimated 70 percent of all imaging procedures are general radiography. The European digital radiography (DR) markets amounted to $68.0 million in 2009 and is expected to reach $111.2 million in 2016 growing at CAGR of 7.2 percent. The European computed radiography (CR) markets amounted to $228.0 million in 2009 and is expected to reach $237.4 million in 2016 growing at a CAGR of 0.6 percent. Source: Frost & Sullivan 3
  4. 4. Key Challenges Faced by Vendors Digital and Computed Radiography Market: Key Industry Challenges (Europe), 2010-2016 Financial short comings and capital expenditure freezes are delaying purchase 1 of equipment. Intense competition among vendors leading to market concentration and 2 reducing scope of profitability. Industry High initial investments and lack of awareness among buyers about the 3 Challenges available options to make the transition from analogue to digital technology. 4 Anticipation of Legislations and Healthcare Reforms causing purchase hesitation. Growth of CR and DR technology is hindered due to the 5 low adoption rate of PACS in some regions of Europe.. Source: Frost & Sullivan 4
  5. 5. European Digital Radiography Market - Factors Influencing and Retarding Growth Implementation of PACS driving Superior image quality of DR allows the demand for DR accurate diagnosis DR enables greater productivity at Increased Patient Throughput and Drivers lower dosage optimized work flow Restraints CR sales encroaching upon DR Without patient volume Initial investment of DR is growth Low adoption rate by DR is not so beneficial significantly higher physicians and radiologists Source: Frost & Sullivan 5
  6. 6. European Computed Radiography Market - Factors Influencing and Retarding Growth CR can be easily integrated into CR requires the least CR is a smooth and cost existing analogue systems amount of retraining for effective solution CR technology is apt for medical staff. low-volume imaging Drivers environments. Restraints Poorer image quality in some CR The European CR market results in retakes CR procedures are similar in is saturated as opposed to workflow to conventional DR. radiography Source: Frost & Sullivan. 6
  7. 7. PESTLE Analysis Digital and Computed Radiography Market: PESTLE Analysis (Europe), 2010-2016 European countries such as France are adopting measures to outsource imaging. The French Ministry of Health is planning to Decline in PACS prices and adopt a strategy which would involve extensive outsourcing to Political affordability of digital solutions private outpatient centers owing to shortage of Radiologists in 10 have encouraged vendors to lure the public sector. customers with comprehensive packages of PACS and digital Certain vendors are resorting to Asian countries as low cost 7.5 solutions. production centers in the future that would enable them to keep their cost base low. 5 Environment Economic 2.5 With the benefits of digital solutions Film less technology and the use of such as Patient comfort, ease of use, photographic plates eliminates the and work–flow optimisation becoming need for hazardous processing 0 more widely known, digital solutions chemicals used in conventional have become more appealing and radiography, that may have harmful acceptable among radiologists and effects on the environment. end users. Legislation Society Many countries in Europe have made End users are looking to plans to implement digital imaging invest in Integrated CR and DR mandates or have already done so, Technology solutions in order providing opportunities for digital to have the best of both imaging vendors. worlds. Technology Rating indicates level of impact of PESTLE factors on growth. Source: Frost & Sullivan Scale = 0 to 10, where 0 is low impact & 10 is high impact. 7
  8. 8. Importance of Product Attributes to End-users Digital and Computed Radiography Market: Importance of Product Attributes to End Users (Europe), 2010-2016 Level of Importance Price is the most important factor considered during Purchase Price Low High a purchase as buyers are looking to make the 0 1 2 3 4 5 transition to digital at affordable prices that are in line with their budgets. High throughput is one of the key attributes considered during a purchase. End-users are looking High Throughput Low High to invest in systems that have a throughput capacity 1 2 3 4 5 at least double that of an analogous system that can provide improved workflow. End users are not only keen about low purchase prices Low High but are also interested in the type of technology they 0 are investing into. They are aware of the fact that a Detector Type 1 2 3 4 5 premium price needs to be paid for these advanced features and superior technology. Maintenance costs are a major concern among end Low High users who look at Return On investment (ROI) as an Maintenance Costs essential factor to help them determine the profitability 1 2 3 4 5 of their practice in the long run. End users, in particular radiologists are looking for Low High digital solutions that can optimise work flow and Reliability 0 provide enhanced diagnostic image quality, therefore and 1 2 3 4 5 reliability and ease of use are important attributes Ease of Use considered during a purchase. Key : Low High Source: Frost & Sullivan 8
  9. 9. European DR and CR Market Revenues Revenues ($ Million) • The European digital radiography market amounted to $68.0 million in 2009 and is 500 expected to reach $111.2 million in 2016 . The market is expected to grow at a compound 400 annual growth rate (CAGR) of 7.2 per cent. The growth rate is expected in the range from 6.4 per cent to 7.2 per cent if economic 300 factors are favourable. 237.4 200 • The European computed radiography 228.0 market amounted to $228.0 million in 2009 and is expected to reach $237.4 million in 100 2016. The market is expected to grow at a 111.2 68.0 compound annual growth rate (CAGR) of 0.6 0 per cent. The CR market has reached a 2009 2016 saturation phase in most of the European Computed 228.0 237.4 Radiography countries and therefore decline in revenues 68.0 111.2 is expected to be seen during the forecast Digital Radiography period (2010-2016). Source: Frost & Sullivan 9
  10. 10. Market Trends and Opportunities Digital Radiography Market: Market Trends and Opportunities (Europe), 2010-2016 Broader Portfolio and in line with the end-user’s budget Vendors offering a broader range of products that can feed the end-user’s budget have an Cost effective solutions edge over others in the DR and quick ROI market. End-users are looking to invest in cost effective Improved workflow solutions that can provide quick Return on and throughput investment (ROI) to ensure the profitability of their practice in the long run. Mobile and DR systems that can improve work flow and retrofit DR throughput thereby allowing enhanced diagnostic image quality are the order of the day. Mobile and retro fit DR are likely to be a growing trend owing to their easy integration into existing conventional and CR systems providing digital technology at lesser effort and inconvenience Source: Frost & Sullivan. 10
  11. 11. Market Trends and Opportunities Computed Radiography Market: Market Trends (Europe), 2010-2016 Integrated CR and DR With CR becoming more of a Integrated CR commodity the future of CR is expected and DR to be integrated systems. Although CR has been an initial step towards digitisation the integration of CR with DR offers much scope. CR in the use of Mammography in Use of CR CR is expected to find its use more in Mammography women’s health in imaging dense breast tissue or implants. This would offer an added benefit of using existing x-ray and yet provide digital images. Broader Portfolio Broader Portfolio The European CR market is a saturated one and Portable therefore the focus is more on price, End-users are and looking at what is necessary to make the transition from analog to digital therefore vendors with a Automated CR broader portfolio are at a better position in the market. The viability of CR is apparent and hence new systems that offer portability and automated manual process will ensure competitiveness in this segment. Source: Frost & Sullivan 11
  12. 12. Digital Radiography - Technology Trends Digital Radiography Market: Technology Trends (Europe), 2008-2010 Computer Three major technical developments that aided have potential to increase sensitivity of detection DR making it more competitive than CT for chest imaging. Dual – Energy Digital Imaging Tomosynthesis These trends are the technological advancements in DR technology that have taken place recently and those that are expected to be launched in the market in the near future. Mobile and Cost effective and retrofit DR economic DR for developing and price conscious Dual markets DR/Fluoroscopy 2008 2009 2010 Source: Frost & Sullivan. 12
  13. 13. Major Industry Participants Source: Frost & Sullivan. 13
  14. 14. Next Steps Request a strategic approach document for a Growth Partnership Service or Growth Consulting Service to support you and your team to accelerate the growth of your company. (myfrost@frost.com) +44 (0)20 7343 8383 Join us at our annual Growth, Innovation and Leadership 2011: A Frost & Sullivan Global Congress on Corporate Growth (www.gil-global.com) Register for the next Chairman’s Series on Growth: The “GIL” Culture: A Critical Element to Long-term Success 11 August 2010 10:00 AM BST (www.frost.com/growthEU) Register for Frost & Sullivan’s Growth Opportunity Newsletter and keep abreast of innovative growth opportunities (www.frost.com/news) 14
  15. 15. Your Feedback is Important to Us What would you like to see from Frost & Sullivan? Growth Forecasts? Competitive Structure? Emerging Trends? Strategic Recommendations? Other? Please inform us by taking our survey. 15
  16. 16. For Additional Information Katja Feick Noel Anderson Corporate Communications European Vice President Healthcare New Business Development 0049 (0) 69 7703343 +44 (0)207 343 8389 katja.feick@frost.com noel.anderson@frost.com Siddharth Saha Director of Research Healthcare + 44 (0) 207 343 8374 siddharth.saha@frost.com 16

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