“The 97th RSNA was, again, a good event to gauge the ‘health’ of medical imaging”, summarized UK-based Anthony Stevens, a market researcher and consultant with a focus on imaging technology. “The congress, which has attracted up to 60,000, and more, delegates from around the world is in essence the worldwide congress for radiology and, by extension, for imaging. – The exhibition”, added the expert, “provided an opportunity to see how suppliers in this $40bn healthcare segment are faring”. In an interview with Applied Clinical Informatics in Chicago, Stevens described his analysis of trends at RSNA and in the market.
?What has been the trend in Chicago in recent years?
Stevens: Visitors over the last few years have seen the aisles getting larger and the number of exhibitors falling. Company mergers, changing economics in some sectors, and the fact that new technologies and applications are just not coming through are all to blame. Imaging is also changing as a field: interventionists have migrated to their own meetings, and they have taken their suppliers with them. Although adding CT and MR to nuclear medicine has been a benefit ... In recent years, molecular imaging has become a major component of the meeting.
The 1990s saw an explosion in IT as specialist vendors began attending the show while IT also took a share of the stands of the major equipment companies. Film companies, their traditional business model wiped away, reinvented themselves as purveyors of filmless radiology encompassing PACS, CR and DR. By the middle of the last decade, IT-related activity may have accounted for over one third of the exhibition floor. PACS vendors predominated but companies supplying hardware, analysis software and storage solutions also showed up. By the end of the decade, IT extended to off-site reading of radiology images.
Companies offering on-call reading had large stands although ostensibly to promote their services in reality the main trade was to sign up new readers and investors. This year the presence of these groups was noticeably reduced. Some had achieved their aim of refinancing or sale … what about the others?
?What exactly is happening in radiology-related IT?
Stevens: The decline in IT at the show is partly a function of the froth leaving the sector and partly that in many countries, PACS is now an established product and future sales will be replacement. More worryingly for the large suppliers is that the fear that customers had of IT has gone. RSNA is covered by Wi-Fi and aspects of the meeting increasingly assume that delegates will log-on and use it. Customers now understand what a network is and how little it costs to put one in their home. They are increasingly questioning the cost of networks in radiology and feel that they have less to worry about in taking on lower cost providers. Companies such as the Korean manufacturer Infinitt and Merge are some which have benefitted. Less money in a sector feeds through to the marketing budget and ultimately less is spent on exhibitions.
?What are the trends regarding mobile modalities?
Stevens: Mobile CT, MR, and more recently PET/CT used to surround the exhibition areas like wagons circling the encampment. Each hall had its share of mobiles reflecting the anchor provider; GE, Philips, Siemens etc. This year there were very few mobiles on display. Does this reflect a decline in business or just that it is no longer economic to take units off the road? Mobile provision held up well even as most centers put in fixed CT and then MR. Mobiles were used to augment activity or stand-in when equipment was replaced. As centers moved from one to two fixed systems there was a lower requirement for mobile provision during replacement. PET/CT took over the baton but this appears to have stalled. The 250 units operating in the US are a far cry from the 800 mobile MRs operating at the peak.
?Who is taking up the vacated space?
Stevens: The groups taking up that space include those supplying the original equipment manufacturers (OEM) and suppliers from the emerging economies; most noticeably Korea and China. China and Korea supported smaller manufacturers through the provision of national trade stands and joined Germany as the only countries supporting their small business sector in this way. Larger exhibitors included Samsung which recently took over fellow Korean manufacture Medison, and from China Mindray, Neusoft and WDM. To date most of their production has gone to the domestic market but increasingly they are looking abroad. Mindray has already had success in western markets, in Spain it is now the number one ultrasound supplier but others are also looking abroad as economic concerns push customers in developed markets towards the equipment in the value segment. Where better to find distribution deals than at the RSNA?
?Please let us have your in-depth look at what’s happening in the emerging markets.
Stevens: Both new and established manufacturers now look to outsource key components. Manufacturers of specialized components have been one of the major groups which have expanded their presence at the exhibition. Not surprisingly they are reticent to disclose who they are selling to but it is a fair guess that far eastern manufactures are increasingly important. Key components in X-ray (tubes and detectors), CT (gantry designs), MR (gradient and rf power supplies and rf coils) and ultrasound: (beamformers and probes) are all to be found on the exhibition floor.
Established manufacturers are also looking at how to best address developing markets. The Chinese market for MR now exceeds 700 units per year, way above Europe, and growth is approx. 15% p.a. in China, while in Europe sales are falling … and in some markets will drop more than 10% this year. The recent move by GE to operate their X-ray business from China only reflects moves that other companies have made to increasingly source manufacturing from developing economies. The mid tier will become increasingly important as developed markets seek value and developing markets seek higher performance products.
?What is the effect of tighter budgets on innovation in the modalities segment?
Stevens: Very few new products were launched in 2011 and most were reconfigurations of existing technologies. The money is no longer around to snap-up the latest offerings. Sales of PET/MR from Philips and Siemens have yet to reach 40 systems worldwide. This is hardly surprising. With a price tag of up to EUR 5 million very few cash strapped economies can afford this. Long-established manufacturers are increasingly eyeing the value segment. Traditionally innovation has been important even to sell lower-value offerings. The argument goes ‘we know how to make the top of the range so we equally know how to deliver an affordable product’.
How do you differentiate when purchasers don’t see themselves buying a value product but where price is a key driver. It is easier when you quantify your product 3.0T or 320 slice but difficult when you can’t ... 1.5T and 64 slice MR account for 70+% of sales in Europe. Shifting the mid tier to 128 slice in CT keeps manufactures one step ahead of their challengers but no one would suggest a shift to 3.0T in MR. How do you name a value product? For GE it’s anything without the title Discovery.
?What’s in store for the upcoming years?
Stevens: The next few years will see a move away from high-tier products towards the ‘value’ segment. More than one keynote speaker emphasized how fortunate they had been to be working in an era full of developments and by extension that this may not be the future. Its over 25 years since my first RSNA and its hard not to feel that the glory days are over.