The events of the past few months seem to have collapsed the calendar, and it’s suddenly time for a few New Year’s Resolutions. With a look forward and a peek backwards at last year’s events, here are some dubious tidbits from your fearless forecaster.
Cardiac Imaging
Can radiologists and cardiologists get along in the same sandbox? The world of cardiac imaging is changing, as manufacturers, researchers and physicians respond to the opportunity to improve the diagnosis and treatment of cardiovascular disease, still the leading cause of death in the U.S. Traditional imaging assets are under improvement (not direct attack), so the future of cardiac catheterization labs, echocardiography and nuclear medicine remains rosy. The newer developments in cardiac CT and cardiac MRI are positioned as both earlier and later screening and diagnostic tools that add value at selected points in the continuum of care for these patients. So the protocols for managing patient encounters may change (such as a quick look in the cardiac CT before a cath lab visit to evaluate the coronary arteries), and new markets created (in some instances ahead of the clinical protocols!).
Computer Aided Detection
Let’s get it right, it is not computer aided “diagnosis” — the computer is diagnosing nothing, just detecting some areas of interest for a physician to review and check. Thus, computer-assisted detection is CAD’s true name. For now, CAD has real value in mammography and new competitors on the scene to compete with R2 Technology. This is good news for R2, as the market should enter a rapid growth phase now that customers appear to have a choice, and R2 has an opportunity to maintain a dominant market share.
Among other CAD applications demonstrated at RSNA, lung cancer appeared to be the next likely area of clinical development, as the research begins to enter the phase of large clinical trials. While this application is trailing breast cancer at the clinical level today, it addresses a larger unmet need of early diagnosis and treatment. Lung cancer screening today is almost non-existent and ineffective — it’s time for a change, and CAD will be a key part of this change, whether the exam is performed on CT or x-ray.
PACS
The current and future investments in PACS are becoming the driving force for change in medical imaging throughout the healthcare system. The former big island of the radiology department is now more likely constructed as a chain of smaller islands (such as ER, ICU, surgery, cardiology, orthopedics, etc.) all connected by fiber and cable. The database and archiving aspects of these imaging networks are the key design variables, no matter how big or small the facility. Many customers are ready, willing and able to upgrade their current PACS or department-specific PACS (the mini-PACS of old), and are taking the models out for a test drive. Strategically, PAC systems represent an inflection point for business. The network touches every image, no matter its source or destination. Medical imaging is still about the image, not the technology. Prudent investors and customers should do their homework, and invest in products and systems to address today’s needs, and begin finding money for the next round of investment, which will only be bigger.
GE keeps rolling
In the post-Jeff Immelt days of GE Medical in Waukesha, Wis., the medical imaging industry was ripe with speculation on how the business would perform, absent his presence. Most predictions of absolutely no change were right on the mark — there has been no discernible change as GE Medical is still a white-hot competitor. The organization, people and products are a valuable resource to customers and a significant pain to competitors.
GE’s direction is time-consuming to summarize at the modality/product level, but easy to summarize at the top level — growth, growth, growth (BIG GROWTH). Whether the subject is ultrasound, CT, MRI, x-ray, IT, the discussion is always how much and how fast. One continuing theme heard regularly is productivity, which means “imaging plus.” Before and after an image is acquired, the rest of the work to schedule a patient, analyze the image, prepare a report, make a diagnosis and treatment decision and get paid now falls within the GE business model. This seems obvious, but is realistically the only way to obtain 20 percent growth numbers in a market where capital spending on imaging equipment grows at a rate of less than 8 percent per year (if that in some cases).
So, is this business approach laying waste to the competition? Hardly. To summarize briefly, GE Medical sells solutions (not just imaging products). There still remains, however, a robust market for (just) products, which keeps many other companies in business as well (big and small).
Much of the radiology market is not ready for the Big Bang approach to radiology management, which implies a fully integrated single-source systems approach (as in handing over the keys to GE). These departments and managers still see benefits in connected but de-linked systems, and many subscribe to the theory of finding the best product in each category, no matter who builds it.
The business of medical imaging still depends on the ability of having imaging systems ready to handle real patient medical emergencies, and fully integrated systems carry the fear of the entire system going down completely. This may have no basis in reality, but is certainly a widely held perception (I’m still on hold — the airline reservation system is down!).
Healthcare is still not subject to all competitive and market forces, but does benefit from the GE Medical approach, which offers a close inspection and analysis of the clinical imaging business, with real tools to improve the financial and healthcare delivery metrics for these organizations.
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].
