Written by
Cranfield, UK, 15th January 2024 – Since the pandemic, the teleradiology market has experienced re-vitalised growth amid a strained global economic recovery. The total teleradiology market (reading services and IT revenue) grew over 21% YOY in 2022 to $2.1bn. As significant influences, such as radiologist shortages, continued reimbursement cuts, innovation, and technology adoption propel the market forward, the future seems bright. By 2027, Signify Research forecasts the total teleradiology market will hit over $4.3bn and is expected to perform over 173k reads.
Teleradiology reading services are expected to evolve in the short- to mid-term in mature diagnostic markets such as China, the USA, and Western Europe. However, X-ray imaging and out-of-hours reporting will remain teleradiology providers’ primary modality and service, representing over 57% and 47% of global teleradiology interpretations in 2022, respectively. Over the forecast period, the widening clinical penetration of advanced modalities, principally CT and MRI, coupled with qualified staff shortages that can read more complex cases, will drive demand for emergency and specialist teleradiology reading services. Importantly, for providers serving emerging markets, such as India, Latin America, and the Middle East, the prevalence of X-ray will remain, and a transition towards advanced modalities will be a longer-term ambition.
Despite abundant opportunities for providers and tech vendors, most geographies are highly fragmented and localised markets. Therefore, leaving many within the ecosystem wondering – how to capitalise on the evolving market?
*Referencing data from Signify Research’s Diagnostic Imaging Procedure Volumes Database – 2023, which forecasts diagnostic volumes for X-ray, CT, MRI, and Ultrasound up to 2026.
Growth Strategies for Teleradiology Providers
The growing acceptance of teleradiology and the trend of hospitals outsourcing image interpretation to providers such as imaging centres, radiology reading groups, and teleradiology providers, alongside the influences discussed above, should be a source of optimism for providers. However, there are hurdles to overcome to achieve the potential growth available, as discussed in a previous insight – teleradiology providers are not immune to the challenges facing the hospital market, with increased wages, radiologist shortages and reimbursement cuts also impacting the future teleradiology providers.
Accordingly, teleradiology providers have pursued more aggressive investment and adoption of advanced technologies such as cloud and AI. Both offer an advantage for recruitment, allowing radiologists to utilise the latest technology and newer user interfaces while boosting efficiency. The most significant technological disruption will occur as IT vendors begin to incorporate generative AI into their portfolios short- to mid-term, allowing providers to leverage tools to streamline reporting through auto-impressions, report curation, and image exchange (retrieving priors to improve diagnosis). Yet, significant barriers concerning technology’s readiness for implementation remain ahead of the market, with bias and hallucinations still to be overcome.
Beyond technological investment, teleradiology providers may seek diversification to grow and differentiate themselves. At the height of the pandemic, teleradiology providers, like smaller healthcare providers, recognised the business continuity risk of offering a single service, i.e., only out-of-hours or a single modality. Based on this, providers have already started to expand core offerings with new services such as routine/overflow capacity or new modality interpretations such as CT or MRI. Longer-term, this is expected to progress further. One opportunity anticipated is expanding beyond radiology and beginning to offer multi-specialities, as has been the case with Artys, a market leader in Spain and Latin America, which has acquired providers to broaden its services into neurology and oncology. Another opportunity, and an alternative to multi-specialism, is that providers seek to expand coverage within radiology, either by acquiring imaging centres to enable the provider to offer both image acquisition and interpretation services or by exploring Radiology-as-a-Service (RaaS). RaaS is a concept that consolidates and streamlines the operations of the radiology department and is gaining interest across mature and emerging markets, with providers such as Premier Radiology in the US already positioning themselves in this offering.
What Does this Mean for IT Vendors?
Due to niche use cases for technology, with complex credentialing, reimbursement, and reporting requirements, teleradiology providers often self-developed PACS and workflow solutions to meet their needs. The legacy of these solutions remains in the market, with self-developed IT representing a third of the top 10 IT vendor shares in 2022. However, this trend is on the decline.
Despite the previous preference for self-developed solutions, as networks become more complex and providers begin to evaluate broader AI, cloud, or international/speciality expansion strategies, the cost required to maintain self-developed systems while simultaneously managing reading volumes and workforce challenges will prove difficult. To overcome the self-developed hurdle, vendors must emphasise flexibility to integrate self-developed tools and the benefits of third-party solutions such as scalability, managed SaaS business models, or AI integration/orchestration capability.
A consideration as the teleradiology market evolves is how an imaging IT vendor can leverage the existing installed base to penetrate further into new markets. For cases where a teleradiology provider seeks to acquire an imaging centre or a hospital or imaging centres (possibly private equity backed) moving to acquire a teleradiology reading provider, the IT opportunity becomes more complex. With the facility’s ownership playing a vital role in the decision-making process, vendors that may not directly operate in the teleradiology market can capitalise on the growing volume and opportunity it offers.
For AI vendors, the teleradiology market is a greenfield ecosystem ripe for targeting, given providers’ inclination to invest heavily in AI to drive efficiency gains. As such, the teleradiology market offers vendors a chance to become revenue-generating and to leverage first-adopter customers to generate evidence of ROI and health-economic benefits of solutions and platforms. Although a significant opportunity, an operational challenge for customer acquisition is that the teleradiology provider landscape is highly fragmented. Therefore, it will be necessary for AI vendors to consider sales-channel options – to either sell directly or evaluate partnerships with AI platform vendors and imaging IT vendors. Regardless of the route taken by AI vendors, integration into existing IT infrastructure (self-developed or third-party) will be paramount to optimise performance.
Looking Ahead to 2024
The teleradiology market is entering a promising stage of growth; having felt the acute effects of the pandemic, many providers have emerged ready for the market opportunities of the future. Although barriers remain, providers, vendors, and private equity increasingly recognise the market’s growth potential.
Looking to the year ahead, more consolidation is expected to follow, with M&A activity anticipated to grow YOY. In 2023, several prominent acquisitions were recorded, despite investment in healthcare experiencing a slowdown from previous years overall. Acquisition targets are anticipated to fall into one of two categories: specialised IT vendors acquired by teleradiology providers or larger imaging IT vendors, whereby the acquired assets offer differentiation in areas such as reporting, workflow, or AI, or acquisitions led by a desire to expand geographically.
Teleradiology providers will look to reach beyond their domestic markets, with vendors in emerging geographies across Asia Pacific and Latin America eyeing growth prospects in mature, higher-cost (revenue per read) markets such as the US and Western Europe, e.g., Spain or the UK. Despite the high reading volumes available to providers in emerging markets, the highly competitive and cost-sensitive nature of said markets means that significant revenue growth is challenging. This is evident from Signify Research’s top 10 reading providers ranked by revenue, with the list dominated by US- and UK-based providers.
Related Research
Teleradiology – World – 2023
Signify Research’s Teleradiology – World –2023 will expand on the analysis of its previous 3 editions and will provide an up-to-date, data-centric outlook on the global market. Using a methodology that blends primary data collected from in-depth industry discussions, the report will offer a balanced and objective view of the trends that are reshaping the market landscape.
About Matthew Watson
Matthew joined the Medical Imaging team at Signify Research in 2022. He holds a first-class MA in Economics, graduating from Heriot-Watt University in 2022 and previously completed an internship at Unilever.
About the Medical Imaging / Healthcare IT Team
Alongside its Imaging IT services, Signify Research’s healthcare IT team provides expert analysis of the global teleradiology market through its Teleradiology – World – 2023 report. Combining primary data collection and in-depth discussions with industry stakeholders, our thorough research approach yields credible quantitative and qualitative analysis, helping our customers make critical business decisions with confidence.
About Signify Research
Signify Research provides healthtech market intelligence powered by data that you can trust. We blend insights collected from in-depth interviews with technology vendors and healthcare professionals with sales data reported to us by leading vendors to provide a complete and balanced view of the market trends. Our coverage areas are Medical Imaging, Clinical Care, Digital Health, Diagnostic and Lifesciences and Healthcare IT.
Clients worldwide rely on direct access to our expert Analysts for their opinions on the latest market trends and developments. Our market analysis reports and subscriptions provide data-driven insights that business leaders use to guide strategic decisions. We also offer custom research services for clients who need information that can’t be obtained from our off-the-shelf research products or who require market intelligence tailored to their specific needs.
More Information
To find out more:
E: enquiries@signifyresearch.net
T: +44 (0) 1234 986111
www.signifyresearch.net