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Signify Premium Insight: What Intelerad Hopes to Make with Life Image Acquisition

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Intelerad has continued its streak of acquisitions by buying up medical image exchange vendor Life Image. The move, along with its previous acquisition of another image exchange vendor Ambra in Autumn 2021, means the enterprise imaging vendor has now combined two of the top three competitors in image exchange, and has given itself a clear market leadership position.

Intelerad hopes that the acquisition will enable the vendor to capitalise on the interoperability focus of the 21st Century Cures Act in the US and should help providers more easily share images across their networks, preventing information sharing bottlenecks and use of legacy processes such as burning CDs. Given Intelerad’s recent run of acquisitions and the integration that they require, is adding another company into the mix really the best use of the company’s resources?

The Signify View

As detailed in several previous Premium Insights, since Hg Capital took a majority holding in Intelerad in February 2020, the imaging IT vendor has sought to expand its capability, and secure market share by making a succession of acquisitions. These have included a variety of companies, including cardiovascular information systems vendor LumedX, image management platform provider Digisonics, UK based enterprise imaging company Insignia, mammography screening management software vendor PenRad and several others. By making these acquisitions, Intelerad has not only been able to grow its position in the market, but it is assembling the capabilities it requires to create a cloud-based multi-ology enterprise imaging platform.

One of the acquisitions to pave the way for this ambition was Ambra, a deal which not only netted Intelerad a growing, profitable business, but also helped to round out Intelerad’s radiology offering, bringing cloud-based PACS, image exchange and VNA to its platform. Further, by buying a vendor offering such capability, Intelerad acquired a toolset that can help bring together its other disparate acquisitions into a cohesive whole.

The latest acquisition, of Life Image, builds on this momentum. It adds another, larger, successful image exchange business to the vendor’s portfolio, cements Intelerad as the market leader in image exchange in the US and adds further tools that will help Intelerad integrate its host of acquired companies.

A Question of Acute

Life Image also opens new sales opportunities for Intelerad. The enterprise imaging vendor’s customer base is heavily weighted toward the outpatient radiology segment. While this is a lucrative and growing market, it is also one that is increasingly being targeted by major international vendors with companies such as GE HealthCare and Change Healthcare, amongst others, harbouring designs on the segment.

Life Image, on the other hand, is primarily focused on larger provider networks, and academic institutions. Flourishing in this market has, so far, proved somewhat difficult for Intelerad, so the vendor will look to utilise Life Image’s installed base and network of contacts to aid in its growth of the large, lucrative mainstream acute market, including the government health sector. This is especially true given the vendor agnostic nature of image exchange systems. For a hospital to adopt image exchange from Life Image, there is no requirement that it sever ties with its current image IT vendor and enter into a new partnership with Intelerad. Life Image’s image exchange could therefore not only prove to be attractive as a standalone product, but allows Intelerad a ‘seat at the table’ when providers look to update existing imaging IT systems. This opportunity can be enhanced by the intelligence Life Images’ platform can provide on incumbent imaging IT vendors volume and performance, offering Intelerad useful insights with which to tailor their own sales pitches when contracts come up for renewal.

This isn’t Intelerad’s first attempt at targeting the acute sector, with its previous acquisition of LumedX an earlier strategy for gaining ground in the market. However, the fact that Intelerad is continuing to target the acute sector with Life Image highlights the importance of the acute market .

Additionally, Life Image, as well as Ambra, to a certain extent, are also well placed to make progress in the market thanks to recent changes in policy, with the 21st Century Cures Act requiring providers to be able to provide patients with their medical imaging data. This initially focuses on general health data and medical history, but, over time will increasingly address all kinds of data, including medical images. As the ability to share images becomes a necessity for providers, Intelerad, given its ownership of Ambra and now Life Image, two of the three largest vendors in the image exchange space in the US, finds itself in a position which appears increasingly promising.

Real World Advantages

Beyond offering opportunities for increased sales of Intelerad products within the acute space, the acquisition of Life Image also builds on another revenue stream. With the access to the range of medical imaging data that it brings, even if Intelerad doesn’t itself own the images, the enterprise imaging vendor can better position itself to serve hospitals and customers through the establishment of a real-world data platform.

The growing importance of health data, including medical imaging cannot data be understated, and hospitals are increasingly aware of the value of that data. The acquisition of Life Image allows Intelerad to further tap into the value of this data, as customers from areas such as pharmaceuticals turn to this data to improve the efficiency of drug discovery, for example. While the true value of Life Image will take some time to realise in this regard, given the nascency of the market, the fact that Intelerad is already preparing for such opportunities places it ahead of the curve compared to most of its direct competitors.

Making a Whole

The picture isn’t universally rosy, however. While the acquisition of Life Image is no doubt a sensible move, and invariably will have been somewhat opportunistic, it doesn’t solve Intelerad’s fundamental problem, deriving value from its long list of acquisitions greater than the sum of the constituent parts.

There are also some gaps in Intelerad’s lineup. The vendor, does, for instance, harbour some AV capability, but, in lacking a fully-featured in-house solution, relinquishes some control. The same is true of AI, with a partnership with Blackford Analysis bringing machine learning tools to Intelerad’s customers, but again, offering less control than an equivalent platform owned by Intelerad. Furthermore, those companies that have so far been acquired continue to effectively sit as a ‘house of brands’ rather than a single cohesive whole.

This is understandable, the integration of such a range of capabilities into one holistic platform is no trivial task. However, the imaging IT market is slow moving, with opportunities to tender for contracts and displace incumbents few and far between. To stand a chance of securing such deals, the vendor does not need to have a fully-integrated cloud-based system ready to deploy right away, but it should at least offer potential customers an outline of its plans. Even simply offering a roadmap would help the vendor give confidence to providers attracted to the potential offered by Intelerad’s acquisitions, but hesitant to commit to the company’s system.

This guidance for customers and potential customers should be among Intelerad’s priorities for RSNA. There will likely be some outline for existent customer and key targets already being quietly shared behind closed doors. But, by committing to a roadmap at the industry’s largest event, promoting its vision and building momentum for its upcoming integrated solution, Intelerad can ensure that the acquisition of Life Image adds not just a strongly performing company to its already impressive roster, but, adds a toolset that can help with a much larger ambition.

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Signify Premium Insight: Canadian Firm Pockets Cash to Give Patients Their Images

This Insight is part of your subscription to Signify Premium Insights – Medical Imaging. This content is only available to individuals with an active account for this paid-for service and is the copyright of Signify Research. Content cannot be shared or distributed to non-subscribers or other third parties without express written consent from Signify Research. To view other recent Premium Insights that are part of the service please click here.

Last month PocketHealth raised US$16m in a Series A funding round that will be used to increase the medical imaging sharing specialist’s presence in the US. The start-up is focused on developing tools that integrate with EHRs in a bid to make it easier for patients to access and understand their medical images and radiology reports.

The tool, which is available for a yearly $49 subscription fee, enables patients to download, share and transport their medical images. This allows access to their images as well as the ability to share images with other physicians and providers, via PocketHealth itself, or via fax or CD.

PocketHealth says it will use the funding to hire more staff and build more clinical partnerships in Canada, its domestic market, and the US.

The Signify View

When it comes to stakeholders in healthcare, patients have, sometimes literally, more skin in the game than anyone else. It is, therefore, a natural assumption that these patients should want to be as involved as possible in their care. This is one of the fundamental tenets upon which PocketHealth’s plans are based.

PocketHealth indulges this sensibility, banking on the belief that patients will want to feel a sense of ownership over their own medical images, that they should want to be able to look at these images themselves, easily share them with whomever they wish, and even scrutinise their radiology reports using the company’s simple language glossary. Should patients seek such accessibility, some of the Canadian company’s tools could prove attractive. The appetite for outpatient imaging is growing, particularly in the US. PocketHealth’s software will make it easy for patients to be more flexible with their care and take advantage of this growing range of providers available to them.

However, there are some limitations to this opportunity. PocketHealth boasts that it already has more than 500 imaging providers across North America signed up to the service, but this is an agreement which will be approached by providers with some reluctance, or at best, caution. While individual outpatient centres may benefit from making it more straightforward to bring customers across from competitors, by the same token, it is also easier to lose them. At least providers don’t necessarily have to pay for this privilege, with the most basic provider plan available at no cost.

Poking a Bear

Another longer-term challenge for PocketHealth is that much of its functionality is already possible, or relatively straightforward to implement via a provider’s existing EHR or medical imaging IT vendor. PocketHealth may be successful in the short term but will need to quickly consolidate its position, lest it risk other larger and more established vendors sensing an opportunity and rushing to fill it. Together the top three image exchange vendors  in the US (Life Image, Ambra and Nuance) represent 86% of the market. Although these are primarily focused on provider-to-provider exchange, if any one of those vendors decided to extend functionality to support patients’ ability to share images, it could immediately reach a significant portion of US patients.

PocketHealth will face other challenges too. While it is no doubt true that increasing patient engagement can, in some circumstances have a positive impact, how universally these benefits can be applied is likely overstated. This is borne out by a study published in the American Journal of Roentgenology of a comparable initiative by imaging IT vendor Visage, which saw radiologists at NYU Langone record video reports in plain English, to keep patients better informed about their health. While anecdotal feedback of the video reports was positive, uptake was, on the whole underwhelming. This was not only true for radiologists, of which just 105 out of 227 included in the study made video reports, but also patients. In total 3,763 video reports were produced during the study period, but of these, just 864 (23%) were viewed.

Patients Care?

One finding highlighted by the study is the fact that, even when more patient-friendly reports are freely given, actual demand among patients is very low. This apparent lack of interest will only be exacerbated when patients are required to pay, as PocketHealth requires if it is to make any money. Further, it undermines the product’s central premise that patients really will value having constant, direct access to their scans.

Even the product’s plain-English glossary should be treated with caution, suggested as such by PocketHealth’s claim that the company worked with doctors to ensure it is “comprehensive and accurate”. The risk is that many of the findings that can be seen on medical images are complex and detailed. Plain English will, in many instances fail to convey this nuance – there is after all a reason specific medical and technical language is required. While not an immediate threat given physicians will still have access to the original reports, it does introduce a degree of vagary that will not sit comfortably with many physicians, allowing patients to understand the subtleties of their diagnoses.

Fundamental Frailty

These are not trivial issues with the product that can be overcome with software updates, or tweaks to UI. These are fundamental barriers that, on the face of it, could limit the long-term feasibility of the product unless significant changes are made, or additional opportunities are identified. As the value of patient data increases, such an opportunity could be in the commoditisation of deidentified patient imaging data, for example.

Without such prospects, on the other hand, PocketHealth’s longevity looks limited. The vendor may well enjoy some short-term success, utilising its novel approach to capitalise on the growing outpatient imaging sector, and riding the Covid 19-induced interest in digitisation and remote technologies. However, longer-term, PocketHealth is at risk of succumbing to one of two outcomes. If the product is very successful in the short term, large EHR and imaging IT vendors will see the opportunity, and quickly look to offer a patient-facing integrated image exchange themselves, either by developing one internally or picking a company in the space, such as PocketHealth.

Alternately, the vendor’s image-sharing capability will be assumed by large EHR and imaging IT vendors, while the ability for patients to view their own images and read their own reports will be underutilised. It may transpire that most patients who want additional detail about their diagnosis, do so through their doctor, and not an app, resulting in a service that isn’t used.

In either scenario, unless PocketHealth does hold an ace up its sleeve in its product pipeline, the long-term opportunity looks slight. The Canadian vendor therefore needs to capitalise on its current momentum and the novelty of its product to capture as many patients and providers as possible. It should seek to invest in establishing its brand and credibility, while getting customers to use its service. This still might not be enough to grant the vendor the long-term market leadership position it seeks, but it should at least help bolster its valuation and make a buyout more likely than a battle. When all things are considered, that’s a commercial, if not necessarily clinical, win.

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Signify Premium Insight: In Step with the HIMSS Set, Intelerad Marches Forward

This Insight is part of your subscription to Signify Premium Insights – Medical Imaging. This content is only available to individuals with an active account for this paid-for service and is the copyright of Signify Research. Content cannot be shared or distributed to non-subscribers or other third parties without express written consent from Signify Research. To view other recent Premium Insights that are part of the service please click here.

Returning after a Covid-imposed break, the 2022 Healthcare Information and Management Systems Society (HIMSS) Global Health Conference and Exhibition was the backdrop of several significant product announcements from key players in medical imaging IT. Among them was Intelerad, which chose the event to launch a new enterprise imaging software suite.

Intelerad says its new Enterprise Imaging and Informatics Suite ties together several components from the vendor’s recent acquisitions and will enable secure image sharing, improved workflow efficiencies and enhanced integration with electronic health records (EHRs) to improve image management for radiologists.

The Signify View

Over the past year Intelerad has been rapidly arming itself with new tools. Boosted by the financial clout bestowed upon the vendor following its purchase by HG Capital in early 2020, it has been aggressively pursuing acquisitions. These deals have seen the vendor amass a raft of capability which will form the core components of a rounded out, multi-ology enterprise imaging solution. However, up until HIMSS, there was no clear strategy on how the vendor will bring these disparate tools from several different vendors together.

Last week’s show began to tell that story, offering an initial outline of the solution it is working to develop. As it stands Intelerad is moving carefully, largely in a bid to continue to benefit from the reputations built up by its acquired brands; it is, after all, very hard to win back a lost customer that has become embedded in a competitor’s ecosystem. As such, the vendor has for the time being decided to maintain the branding and feel of the individual components of the products in its enterprise imaging suite.

This light-touch integration, which has resulted in a suite of different brands under the one Intelerad banner is only a temporary solution. Over time Intelerad will follow the lead of several other imaging IT vendors and invest in creating a single, cohesive platform, but the present ‘house-of-brands’ approach will allow Intelerad to service customers in the meantime.

Making Intentions Clear

As importantly, the announcement of its product suite will also signal to Intelerad’s customers its direction of travel. When a solution is relied upon for the efficient operating of a hospital, providers look to their vendors to have roadmaps aligned with their own strategic planning. Providers may not need a fully consolidated multi-ology enterprise imaging solution with advanced AI and cloud capability today, but they need confidence in their vendor selection that such as solution can be adopted in the future.  As such, providers will become increasingly unwilling to commit to long and expensive imaging IT contracts with vendors that haven’t at least laid out a roadmap for developing that capability. With imaging IT deals being signed for longer periods, for a provider, a vendor’s future offering is almost as important as its current portfolio.

This focus on future capability means that there is still a lot of work to be done on Intelerad’s part. With providers committing to vendors for longer periods of time, vendors need to show that they are continually innovating and developing for the future. One objective Intelerad must work towards in this regard is the increased integration of the separate tools. Over the coming years Intelerad must fully bring together the constituent elements of its portfolio, if its customers are to enjoy the full benefits of a true, multi-ology enterprise imaging system.

Plugging the Gaps

The corollary to that is that the vendor must also continue to fill the gaps in its portfolio. Through its acquisitions of LumedX, Ambra, Insignia and others, Intelerad has acquired broad capability that will complement its own PACS offering. There are, however, still some obvious gaps. Some, like advanced visualisation and other ‘ologies such as digital pathology, which could be resolved either through partnership or acquisition – which path will be taken remains to be seen. The firm’s longstanding partnership with Blackford Analytics for AI is a prime example of the partnership approach.

With the backing from HG Capital, Intelerad has the means to continue acquiring capability, however the question will be raised on the value of acquisition over partnership. In the instance of AV, white labelling of specialist AV tools and competency is common, so an acquisition may make little business sense. Other areas are less certain. Intelerad will increasingly need to offer advanced AI solutions to its customers to remain relevant, however, with the AI market being so nascent, and the technology changing so quickly, an acquisition near-term looks unwise. Such a move may be warranted in the future, but at present an acquisition represents a commitment to a particular solution far larger than seems sensible or indeed necessary. Furthermore, the Blackford partnership provides core Intelerad customers access to a broad array of AI tools. While there are some difficulties associated with partnerships, they are, in the short to medium term, a pragmatic option for Intelerad, allowing it to offer AI capability to its customers, in an essentially risk-free way.

The imaging IT vendor could alternatively look to develop some capability in house. For AV and AI this is the least practical route, but for cloud capability, developing its new platform cloud-natively will require some intensive R&D investment, especially considering the technical complexities and nuances of its new “house of brands”. Although some cloud expertise and technology assets  were brought in-house with the Radius acquisition in 2020,  a complete cloud-native platform represents a complex challenge for any vendor, but it is one that must be undertaken. From a provider’s outlook, similarly to enterprise imaging strategies, the importance for vendors currently is to have a clear cloud strategy, outlining the roadmap for cloud-based products and maintaining flexibility to support different customers strategies, whether on-premise, fully hosted cloud or a hybrid approach.

Persistent Progress…

These challenges are not a surprise, nor, for the time being at least, are they causes for concern. Although the vendor’s announcement at HIMSS wasn’t a revolutionary product release, it did clearly signal to Intelerad’s customers that progress is being made on the most important strategic objectives, and the vendor remains a stable supplier, although one that does not dance on imaging IT’s bleeding edge.

This is enough today, and, assuming similar progressive steps continue to be taken, the vendor is positioned well. What’s more, as evidenced at the Floridian show it is also reflective of the broader state of imaging IT.

HIMSS 2022 represented an evolutionary step on from vendors’ offerings at RSNA in December. Many of the key priorities remained the same, with a heavy focus on operational workflow, business intelligence and interoperability, reflected in some of the announcements from GE, Philips and others. More broadly vendors began to offer answers to the question of how data can be brought together across an enterprise. Integrating patient data from sources such as the EMR alongside diagnostic imaging data offers significant potential, and vendors such as Hyland have begun to show solutions that facilitate this kind of integration.

These, and other similar plays, offer a glimpse of the true potential of the use of data in healthcare. Rather than looking retrospectively to assess the past performance of an imaging department within a wider hospital network, vendors are making headway on solutions that offer analytics which are proactive and predictive, drawing out actional insight and useable suggestions to support providers. This centralisation of data is still in its relative infancy, but, as seen at HIMSS, the appreciation of the value of data is increasing and the first foundations are being put in place.

…To Dizzying Peaks

HIMSS, like RSNA 2021 before it, was a somewhat smaller and quieter affair compared to previous years, but also like RSNA, the show’s return brought with it a renewed vigour and focus. Vendors at the show can see the dizzying peaks of possibility that new technologies offer, but their expeditions have only just started, and they have barely left the foothills.

On a smaller scale the same is true for Intelerad. It has amassed many of the components it needs to be successful and will have no doubt made plans to bring on board those which are not yet in its clutches. It has begun the process of integration of these components and signalled its future direction to reassure customers of its commitment to their enterprise imaging objectives. And, as a trump card, its capital backers mean that it is ready to further add to its ranks with another strategic acquisition should the opportunity arise.

Intelerad is, in short, comfortably placed. If it can continue to demonstrate that it is steadily progressing, there is no reason to doubt its ability to realise its vision.

 

About Signify Premium Insights

This Insight is part of your subscription to Signify Premium Insights – Medical Imaging. This content is only available to individuals with an active account for this paid-for service and is the copyright of Signify Research. Content cannot be shared or distributed to non-subscribers or other third parties without express written consent from Signify Research. To view other recent Premium Insights that are part of the service please click here