Diagnostic Imaging Scan - November 27, 2007 - (Page 4) X-ray today is more about digital than film, as an aging installed base replaces worn-out systems with ones built around flat panels. Easing the transition are advantages made possible with postprocessing algorithms, image stitching, and digital tomography. • Biospace Med (5534) shows off its low-dose, high-contrast EOS x-ray system, utilizing two matched sets of x-ray tubes and digital detectors mounted orthogonally on a mobile C-arm. • Canon Medical Systems (3311) notes the digital radiography detectors it supplies to a multitude of end-product manufacturers. • Carestream Health (2513) emphasizes the DR 9500 with an x-ray tube and detector fixed to a ceiling-mounted U-arm that moves around the patient for easier positioning and increased throughput. • Fujifilm Medical Systems USA (1129) remolds computed radiography into digital radiography, integrating phosphor-based detectors into systems that do away with cassette toting by automatically reading and erasing plates for the next exposure. • GE Healthcare (1729) focuses on the Definium portfolio. • Imaging Dynamics (4729) demonstrates DR systems built around CCD-based detectors, framing the two-detector X220, cleared in June by the FDA. • Konica Minolta Medical Imaging USA (2554) promotes its line of CR products, including the single-bay Regius Nano CR, commercially released in early summer, and its flagship dual-bay Xpress CR. • Philips Medical Systems (4129) standardizes digital x-ray systems on the Eleva platform to simplify training and boost productivity. • Siemens Medical Solutions (7713) unveils the Artis zeego, a next-generation interventional system with a multiaxis C-arm and robotic technology. • Swissray International (7162) shows the ddRCompact series of digital radiography systems, cleared earlier this year by the FDA. An optimized patient positioning system and algorithms for stitching orthopedic images differentiate the new products. • Toshiba Medical Systems (7130) displays, as a work-inprogress, a low-contrast imaging feature for its Infinix products. Storage options are modular, allowing facilities to configure the initial set-up however they want, Wheeler said. If storage needs increase, more capacity can be added. Facilities might begin with a very low-cost tape or optical drives featuring removable media, expanding with RAIDs or more sophisticated and costly components. Wheeler expects to have five or six orders for the beta version of SyntryPACS soon after the RSNA meeting. Full production will begin by January. Its credibility buoyed by the more than 700 hospitals currently depending on its storage devices, QStar should attract hundreds more customers seeking a PACS solution, he said. “I would like to have hundreds of installations a year from now,” Wheeler said. “I think that is a very realistic number.” QStar is working through distributors that usually sell storage products to end users in the medical community. The addition of Syntry PACS will add another dimension to their business by attracting customers who can’t afford the big-ticket PACS from vendors such as GE Healthcare, Agfa, and Siemens. Wheeler expects QStar’s entry into the costsensitive PACS market to have no effect on its traditional customer base, made up of GE, Agfa, Siemens and the like, which buys storage components to augment their own PACS. “We are satisfying a market need that they cannot directly address primarily because of the pricing issue,” he said. from 2006 withered and imaging centers felt the pinch. The number of centers may shrink another 10% in the year ahead, even though procedures are expected to grow, paradoxically, in the double digits. This continues a trend that has gone on since at least 1999. Despite the shrinking provider base and increased demand for services, the opportunity of centers to invest in their future has all but vanished. Revolving credit lines are tapped dry. Investors aren’t seeing the returns they were promised, so they’re hesitant to put in more capital. And operating capital is being squeezed not only by the DRA but by utilization management companies (also known as radiology benefit management companies, or RBCs). These RBCs are clamping down on “overutilization” and privileging requirements. In the year ahead, the influence of the RBCs is expected to grow. Already many, including MedSolutions, AIM, and NIA, manage the imaging expenditures covering more than 38 million lives. What else will centers soon face? Key trends are unmistakable. Some will make life harder for centers, some easier. Others could have either effect, depending on how they play out: • Payers, both government and commercial, will be more organized and aggressive in their management of imaging costs. • Price transparencies will develop in the freestanding market. • Emerging federal and state regulations and oversight will alter how and where outpatient imaging is delivered, pushing volume back into radiology practices and hospitals. • Imaging demand and volumes will continue to increase by 8% to 10%. • Imaging providers will need to demonstrate and deliver quality, cost, and service levels to payers, providers, and consumers. • Large multispecialty group practices will become significant imaging providers in many markets. • Consumer and physician expectations regarding patient experiences will continue to rise. • Hospitals will become savvier and better able to compete vigorously in the freestanding space. Amid all these developments, there is an underlying reason for hope that the future will brighten, for both centers and equipment vendors. The combination of center closures, consolidations, and stagnated growth by entrepreneurs will begin to create enough volume for those remaining centers to become profitable. Possibly in the latter half of 2008, these volumes will justify new big-ticket purchase prices. In essence, the pendulum that has wreaked havoc in the imaging centers community will swing the other way, bringing along a period of rebuilding and growth. Steven R. Renard is a diagnostic imaging and radiology industry consultant who has nearly 15 years of related experience, primarily in imaging center operations. November 27, 2007 Commentary ImagIng’s pIt and pendulum By STEvEN R. RENARD As a consultant, I have the opportunity to speak with many operators, vendors, payers, analysts, and banks about the future of outpatient imaging. In our conversations, I share trends, numbers, and perceived areas of growth. What they want to talk about most is financials, particularly what 2008 will bring. It’s a curiosity that these folks, no doubt, share with vendors. Imaging centers and vendors have shared much over the past year. Little of it has been good. Of the 6037 free-standing outpatient facilities operating at the start of 2007, 10% have closed, consolidated, or fallen into default. The Deficit Reduction Act did much of the damage, as reimbursements Copyright © 1991-2007 CMP Healthcare Media Group LLC
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