Forward looking — that’s the only way to forecast, even though some prefer the rear-view mirror approach to guessing what lies ahead. The only trouble arises when the road starts curving, which in healthcare seems to create more anxiety than opportunity.
Looking back over 2000 for clues to 2001 and beyond, a few points are certainly worth noting.
Consolidation
Even Rip van Winkle woke up for the action this year, which included an open checkbook policy from the medical divisions of GE, Siemens and Philips. Why now? Affordable valuations of the target companies, and aggressive analysis of the benefits of scale, as in large scale. The infrastructure costs of sales and service for the global medical devices market can be effectively leveraged by growth. Most of the major OEMs had opportunities and gaps in their product line offerings that were easily filled via acquisition. The presence of a global service organization provides a recurring revenue stream that was usually not available to the specialty single modality company.
Most aggressive deal — Philips and Agilent’s Healthcare Solutions Group. This move positions Philips to challenge GE Medical Systems.
Most strategic deal — Siemens and Shared Medical Systems. Siemens moves into broad-based healthcare IT services, where the major growth in hospital spending continues.
GE’s best deal — all of them. Marquette, OEC, Lunar, SMV — they all fill the needs of current customers, and leverage the GE name to gain market share.
Most interesting deal — GE and Fonar. I guess they got over that little lawsuit from a few years ago.
X-Ray
So, how will digital X-ray go in 2001? I’ve seen estimates of unit sales ranging from 40 to 100 units this year in the U.S., which is better than last year, but still a round-off error in the market. The variations in digital X-ray confuse both the customers and manufacturers — CCD, CR, DR, amorphous silicon, DQE … One of the better pieces of advice is to develop a comprehensive filmless strategy, and CR plays a significant role due to its capabilities to provide mobile and portable X-rays in this setting. 2001 should deliver an improved market as prices and costs drop after a concentrated year of effort in cost-reduction of the imaging plates. The
quality of the image analysis software is expected to become the key differentiating factor over the next two to three years, as the acquisition hardware starts to settle and extracting the image information becomes a value-added step in the workflow.
PACS
This area looks like one of the best places to be in 2001, if you are a customer. Clearly, this is a year to obtain bang for the buck as storage/archiving and network costs have dropped tremendously. ASP offerings are effectively driving down market prices as well, if you choose to buy. If you are a manufacturer of PACS, a growing market may make your squeezed margins come out OK in the end. It should help if you are a part of a larger company.
CT
Hot new offerings are differentiating the standalone CT of 20 years ago from the integrated choices today. Combined functional and anatomical imaging systems, image-guided surgery systems, cardiac CT options — all of these are choices that take imaging to the next level. CT is still the workhorse imaging platform that surgeons rely on endlessly.
MRI
The physicists continue to deliver the goods from this complex modality, now including high-field (3T+), spectroscopy, cardiac MRI and fMRI. With continued growth in procedures and no pressure on reimbursement, this area should be golden for at least the next few years (and maybe more).
3D — Ready for primetime
3D imaging has been hanging around the research and academic sites for longer than many X-ray systems. The latest generation of computers appears to have finally reached a performance level that any study can be accomplished in less than 1 hour, and provide invaluable information to almost every specialty in medicine. Specific analysis protocols are developed weekly, reimbursement is available on many fronts, and seeing is believing in your own clinical setting. Take the time to evaluate these systems carefully for your own institution — they really are worth another look at this time.
Hope you enjoyed the fast pace this year. It probably will be even faster in 2001! 
Doug Orr, president of J&M Group (Ridgefield, Conn.), consults with medical device companies in strategy and business development for emerging growth markets, notably radiology and cardiology. Comments and suggestions can be sent to [email protected].
