Written by
Cranfield, UK, 8th November 2023 – A concept stretching back decades, teleradiology has offered a considerable growth engine for IT vendors, teleradiology reading providers, and private equity companies. Excluding a blip during the pandemic, where teleradiology reading volumes fell in tandem with total diagnostic imaging procedure volumes, the market has grown at a steady pace over the past decade, with announcements of prominent market players generating double-digital growth year-on-year not being uncommon.
As market dynamics evolve within the healthcare ecosystem, including increasing diagnostic imaging volumes, reimbursement cuts, severe radiologist shortages, and burnout, the pressure on providers to use out-of-network teleradiology services to maintain or expand capacity has been amplified. In emerging geographies, such as India, similar challenges are present alongside underdeveloped digital infrastructure and initiatives to improve access to primary care.
The growth in the teleradiology market has also intensified M&A activity, leading to a phase of extensive consolidation among teleradiology reading providers. To meet the evolving needs of the market, teleradiology providers have made strategic acquisitions to expand expertise and specialities, radiology workforces, customer base, or geographic reach. Add to this the fact that interest in the market remains strong from both private equity and technology vendors; the question arises: how can vendors best capitalise on the evolving market landscape?
On the Technological Frontier
A fundamental driver for any teleradiology business is maximising efficiency and quality, an essential requirement to remain competitive in the market and manage the increased imaging volumes being outsourced. As such, cutting-edge AI and IT solutions to promote faster reading times and minimise errors have been highly sought after, with teleradiology providers typically among the first adopters of AI and cloud.
As teleradiology providers have consolidated and formed more extensive networks, and increased reading volumes, these organisations have become a fast-emerging market opportunity for prominent imaging IT vendors that once focused on the hospital market. Previously, the IT landscape in teleradiology aligned to smaller best-of-breed vendors, whereby portfolios offered a “lighter footprint” complemented by niche workflow orchestration capability specific to the customer segment. However, in recent years, the market has observed vendors such as GE HealthCare and Change Healthcare announce cloud-native radiology IT solutions targeted at the outpatient/teleradiology market.
For incumbents, such as Konica Minolta, Intelerad, and Ramsoft, doubling down on specialised functionality, whether this be patient portals, billing, or reporting, to emphasise the efficiency of the platform will be crucial to not only secure the installed base but leverage provider consolidation to displace competitors when the consolidation of IT contracts inevitably follows. The ability to demonstrate real-world use cases of value and ROI will also drive investment from those teleradiology providers acquired by private equity, whereby a lean and efficient model will be the highest priority.
Beyond the core radiology IT platform, AI has created a significant buzz amongst reading providers from an operational and image analysis perspective. Algorithms, including those for triage, case prioritisation, and report generation, are playing an integral role in streamlining the reporting process and lightening radiologist workloads. While there have been several notable public announcements, such as between Aidoc and Everlight Radiology, and Qure.ai and USARAD, the adoption of AI will be dependent on two factors: firstly, the price point of the algorithm and how it impacts the profitability of the teleradiology provider; and secondly, whether the algorithm can be proven to speed up the reporting turnaround time and improve a teleradiology providers performance against SLAs.
Hurdles Ahead
Whilst there is a strong record of growth from both a technology vendor and teleradiology provider perspective, realising the market opportunity is not without hurdles. Establishing strategic priorities has become more important amid heightened levels of consolidation, and caution is advisable to both those seeking entry into the changing ecosystem and seasoned players.
Of the risks facing providers, front and centre is the double-edged sword of radiologist shortages. What continues to be a significant driver for the adoption of teleradiology is also, due to its severity, hampering workforce recruitment and retention for the teleradiology providers themselves. To mitigate this risk and ensure the business’ workforce can meet the volume and high SLAs, providers such as vRad (owned by Rad Partners), the US market leader, have significantly increased compensation post-pandemic. Although not all providers are compelled or able to afford to keep up with national market leaders, providers with tighter margins will have to evaluate other incentives to improve the longevity of their workforce. In some instances, IT investment and the improved user experience of the radiologist can play a critical role in employee satisfaction with AI or cloud, reducing some of the daily burden.
For teleradiology providers that operate in emerging markets, international growth ambitions are common, with notable players in Asia Pacific eyeing market opportunities in the US or UK, for example. In such cases, the route of partnership is often the most fruitful, allowing a provider to leverage their partner’s existing installed base while offering complementary services – whether this is additional modalities or specialisms, or, as has been witnessed before, offering out-of-hours reading services for imaging facilities in different time zones, e.g., between the UK and Australia. International expansion is rarely an easy feat, however. Regulations, licensing, and credentialing requirements, as well as prospective reimbursement, vary significantly between countries.
The Market of Tomorrow
Upon reflection, amid the myriad challenges, there is reason for optimism; the drivers of teleradiology’s past growth will hold over the mid-term, with no immediate risks currently visible in the global market to cause sudden disruption. Technological innovation will increasingly supplement the growth opportunity that the market offers. As dynamics within teleradiology evolve, and consolidation progresses steadily, providers, technology vendors, and private equity alike must be purposeful with their strategy, evaluating not only the market opportunity today and in the near term but also understanding the market’s direction over a longer timeframe and diversifying to mitigate risks in the post-pandemic environment.
Related Research
Signify Research’s Teleradiology – World – 2023 market intelligence report 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 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.
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