Tag Archives: Amy Thompson

Signify Premium Insight: “Providers Need to Know that Vendors can Deliver” – Capitalising on Healthy Growth In Imaging IT Markets

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Senior Analyst            Amy Thompson

While the Covid-19 pandemic has mercifully ceased to be the all-pervasive issue it was at its peak in 2020, the impact of this world-changing crisis is, unsurprisingly, still shaping many medical imaging markets. In 2020, the pandemic caused a spike in some modality sales which led to a subsequent uplift in sales of some Imaging IT segments. Following such a spike, a cooling of the market was expected for 2021.

However, as highlighted in Signify Research’s Imaging IT – Core Report – World 2022 one of the deliverables of the Imaging IT Market Intelligence Service, this didn’t turn out to be the case for the medical imaging IT market in 2021.

“The majority of the market, and definitely on a global perspective, performed better than expected,” states report author, Senior Analyst Amy Thompson. “We were expecting a softer year in some markets because of the strong year that AV had in 2020 due to the Covid 19 pandemic and the upsell of AV IT via the imaging modality sales channel.

“But, what we actually saw was a second year of unprecedented spending in 2021, which aided stronger recovery and growth in AV and  greater volumes in radiology and cardiology IT markets, from both replacement cycles and new deals.

“Deal activity did not quite reach pre-pandemic levels, so we can’t say that the market has fully reverted to “normal”, but it is tracking very positively.”

This is particularly true in mature markets. For total imaging IT; the US saw annual growth in 2021 of 3.6%, growth in Western Europe was 2.7% and growth in Japan was 6.8%, but also applied to some emerging markets such as India, which recovered faster than expected.

Add-on Advantage

This was a particular surprise. “India was hit hardest by Covid later than the rest of the world,” says Thompson, “The expectation that there would be at least a short-term lingering impact from the pandemic. But, actually, the total imaging IT market recovered faster than expected, led by strong modality sales, with opportunities to upsell AV IT.”

This was the case more broadly, with growth of “add-on” products, including image exchange tools, operational workflow solutions and universal viewers continuing into 2021. However, in 2021, these deals sat alongside the pent-up demand from contracts that were pushed out from the height of the pandemic, which began to be initiated in 2021.

These deals will continue to be realised, which will lead to some surprisingly strong growth in certain markets. “There is,” notes Thompson, “almost a convergence of deals that were already planned for 2022, 2023 and 2024 and those planned for 2020 and 2021 which were pushed back.

“There are also other fundamental factors supporting the market. Across the world there is a lot of recovery and resilience funding available, while there are also multiple initiatives around digitisation to deal with the pandemic backlogs for imaging and diagnosis. It is creating a swing in the market that will lead to an unprecedented and atypical growth period.

“This means that in North America for example, which is a very saturated and typically slow-moving market, there will actually be decent growth. It won’t be double-digit that some emerging markets offer, but for a mature market like the US, it is a level of growth that won’t happen again for some time.”

Strategy Shift?

Such unusual growth prospects could lead some vendors to re-evaluate their strategies in order to ensure they are capitalising on this unique opportunity, especially given the typically less risky option that mature markets present.

However, Thompson cautions that it isn’t that simple. “I think that if a vendor is evaluating its strategy for emerging markets, the correct course of action will depend on its portfolio and its current installed base.

“Should a vendor, with no installed base, try and enter a brand-new market, especially considering the growing risk in many emerging markets? Probably not in the next two to five years. However, for those vendors which already have an installed base, looking to expand and grow in these markets might represent a sensible priority and growth opportunity.

“In all cases, it’s important to remember that the performance of any market won’t be uniform, there will be pockets of opportunity. For example at the top-tier academic side, it could be upselling multi-ology solutions, or offering a second iteration of a package for a specific customer. So, there will be examples of vendors growing amid difficult overall market conditions. There are good opportunities, but the question is, how much risk will vendors be willing to take on to maximise this opportunity?”

Best Foot Forward

Despite the differing suitability of specific vendors and their portfolios for different markets, there are several factors which can put them in the best place to take advantage of the expected growth trends. In developed markets future plans are almost as important as current capability.

“It’s very clear where the market is heading,” Thompson explains, “there is a drive to outpatient settings, and a greater need for collaboration and interoperability across healthcare, both in terms of imaging, but also across healthcare more broadly.

“This drive towards multi-ology enterprise imaging platforms, with greater AI integration, as well as operational workflow and business intelligence tools is what providers want, although much of the market is not ready to deliver this today. Providers need to know a vendor’s development roadmap and understand how they plan to deliver this long-term ambition. Providers are looking for long-term partnerships, so they need to have confidence in vendors’ solutions five or ten years from now.

“That could have many facets, including radiology consolidation, the cloud, AI platforms, enterprise imaging with digital pathology integration, the convergence of EMR and diagnostic data into workflows. Providers need to know that when they need it, a vendor can deliver.”

The picture is different in emerging markets, where there is a less defined recipe for success. As markets develop, with increased digitalisation and provider consolidation, they will increasingly look towards international vendors because they will need more advanced capability than many domestic solutions are able to offer.

The Small and the Mighty

As well as varying significantly by region, different types of vendors are also likely to fare differently over the coming years, with different types of vendors harbouring the advantage at different times.

“The bigger health technology vendors,” Thompson elucidates, “compared to the smaller independent vendors have the edge in terms of pure scale, the breadth of their portfolios, their ability to invest and their access to resource.

“All vendors are now offering core enterprise radiology platforms and starting to offer multi-ology, enterprise imaging solutions, they are all slowly working on cloud and are also defining AI strategies, with either native development or AI partnerships.

“However,  larger imaging IT vendors with modality and broader healthcare technology portfolios are increasingly placing a lot more emphasis on operational service lines, fleet management solutions, command centres, and the scalable analytics solutions helping to optimise the care pathway and modality use

“Smaller, challenger imaging IT specialist vendors don’t have this capability. They don’t have the breadth to be able to provide a like-for-like product, but instead tend to be nimbler, and able to react more quickly to short-term opportunities. The question is whether they can maintain short-term advantages over the longer term.”

The Journey Begins

This will prove to be the key challenge for the smaller specialist vendors. Over recent years they have been eroding market share from the larger health tech vendors, but as the solutions from these larger vendors evolve, conditions could become increasingly difficult for the smaller vendors. They have enjoyed an early lead with regards to some technologies, but as the larger vendors catch up and, thanks to their breadth, are able to expand their offering further, smaller vendors will need to find a new way to compete.

For all vendors though, in the near term, the outlook is positive. Last year proved to be a much stronger year than was expected, with growth that is set to accelerate, granting significant opportunities for vendors that are able to react.

The market direction is clear, but, as Thompson emphasises, “success in the next two years comes down to more than the portfolios of today.”

“Success will be determined by vendors that can best demonstrate and outline their intentions, highlighting what that means for the provider and showing timelines for delivery. Essentially, it means aligning their roadmap with the key strategic plans that providers have. Vendors need to be transparent and open with providers and be ready to embark on that journey together.

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Terarecon logo on silicon chip

Signify Premium Insight: The Concerted Effort that TeraRecon Must Make

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 saw Boston-based vendor ConcertAI secure $150m in series C funding, adding to the $150m series B round in 2020 and boosting the company’s valuation to $1.9bn. The AI start-up, which specialises in offering real-world data to life sciences firms to manage regulatory clearances and develop clinical trials, and supporting healthcare providers to improve patient experience, will use the money to scale its software solutions.

The funding puts ConcertAI in a strong position. But will AV and medical imaging AI firm TeraRecon, which was integrated into ConcertAI in November 2021, also see any benefit?

The Signify View

TeraRecon first became linked to ConcertAI after being acquired by corporate parent SymphonyAI in March 2020. This portfolio of companies seeking to develop new generation AI solutions across a variety of sectors, from retail to financial services, brought TeraRecon on board and placed it alongside stablemate ConcertAI. At the time the deal seemed to offer clear synergistic opportunities for both parties such combining population data from ConcertAI with imaging biomarker technology and expertise to improve patient stratification for oncology clinical trials. Alternatively, providers could utilise imaging data from TeraRecon alongside EHRs and real-world data from ConcertAI to develop more integrated care management solutions.

Since then, however, TeraRecon has been relatively muted. Instead of revealing new, integrated products, public releases and announcements have slowed and several key c-suite personnel have left. This seems something of a regression from several years ago when TeraRecon was among the earliest of AI vendors to promote the AI-marketplace-platform model, securing patents and forging ahead with a novel approach to radiology AI’s last-mile challenges. Moreover, the senior leadership at TeraRecon were at the forefront of every industry debate and event discussing the role of AI in medical imaging.  Concurrently, the vendor was among the strongest independent AV vendors, securing good market share and beginning to make connections between AV and AI.

The firm hasn’t given up much ground from this position in AV, a market that moves slowly after all, but neither has it moved forward whilst other vendors have made headway, somewhat negating its early ascent. One initiative, for example, was to integrate AI tools from its platform with its own AV capabilities, packaging the combinations into specialist “premium” suites that were more attractive than individual tools. While TeraRecon’s progress slowed on this front, imaging IT vendors, AV vendors and modality vendors have incorporated competitive AI offerings, increasingly eroding the specialism that allowed TeraRecon to shine.

Move to the Money

Against this backdrop of increased competition and lengthy implementation cycles for clinical AI, integrating TeraRecon into ConcertAI is a sound move that offers a more direct route to financial success. Making significant returns in clinical AI is a difficult and drawn-out affair. The technology’s profitability is stymied by several barriers including a lack of reimbursement and a lack of financial impact studies, as well as the fundamental question of who will foot the bill. In preclinical and life sciences, on the other hand, the route to returns is much clearer, with pharmaceutical firms willing to invest in specific drug discovery projects, effectively using ConcertAI or alternatives as an external research team with project or milestone-based fee structures. This approach enables ConcertAI to gain commercial traction whilst waiting for the clinical market to mature. In the near term this could leave TeraRecon as a diagnostic imaging specialist whose expertise is applied to the preclinical space, with areas such as companion diagnostics a potential strength. For ConcertAI, having such expertise in imaging analysis in-house, and promising to utilise imaging data alongside other clinical data, could be a major selling point, improving the vendor’s odds of courting big-pharma and top academic provider interest.

Despite that, in the grand scheme of ConcertAI’s opportunities, TeraRecon’s existing AV business does not appear to be a  priority. ConcertAI has recently announced strategic agreements with the likes of Pfizer and Bristol Myers Squibb, so the returns of its funding round will be spent on the development of capability and service that can support such multi-billion-dollar companies. TeraRecon is not a central part of that strategy. It will, for the most part, be able to maintain the share it has carved out for itself within the AV IT market mid-term, and its technology will lend an edge to ConcertAI in preclinical, but it is unlikely to be able to chart its own course, and invest in its own growth in AV, as it would have been able to prior to its acquisition.

A Deal to be Done?

Given this impasse at which TeraRecon sits, it could be seen as an attractive acquisition target by vendors looking to round out their imaging IT portfolio. While ConcertAI will value TeraRecon’s AI capabilities and the vendor’s AV expertise, aside from being a dependable, albeit comparatively small source of revenue, it will be a lower priority to the vendor. As such ConcertAI could look to pare of TeraRecon’s AI abilities to bolster its preclinical and life sciences package, and then sell off the remaining AV business.

There are several vendors that would both benefit from such an acquisition and have deep enough pockets to make it a reality. Two of the most obvious names are Intelerad and IBM Watson Health. Since private equity investor HG Capital acquired a majority stake in Intelerad in early 2020, the imaging IT vendor has been on an acquisition spree, picking up Ambra, Digisonics and LumedX among others.

The vendor has also shown that it is beginning to link together the capabilities of these formerly disparate businesses into one cohesive whole (see In Step with the HIMSS Set, Intelerad Marches Forward). However, this enterprise imaging platform to-be, as yet lacks an AV solution, an omission that could be readily addressed by the acquisition of TeraRecon. What’s more such a deal would also net the vendor TeraRecon’s 10% share of the North American AV IT market in 2021, handily propelling Intelerad’s total imaging IT market share from 3.5% to 5% in North America.  The story is similar for IBM Watson Health. Freed from the wider tech business Watson Health’s new owners, Francisco Partners, could handily add TeraRecon’s AV capability and market share, to advance Watson Health’s along its enterprise imaging journey.

The Here and Now

For ConcertAI, the funding is another sign of confidence in strategic focus on real world evidence for life sciences. With a valuation of $1.9bn, it is clear great things are expected of the start-up. These, in the near term at least, are unlikely to come from TeraRecon and its strengths in image analysis or AV capability.

There is an advantage to using image analysis in its preclinical and drug discovery remit. Longer term there are lucrative possibilities such as the identification and cataloguing of imaging biomarkers, enabling diseases to be increasingly diagnosed from imaging alone, reducing the need for biopsies and other interventional diagnostic procedures. Such tools could be commercially successful, but would first require significant investment in research and development and would still take several years for any sizable returns.

Instead, it seems that TeraRecon, and the capabilities it brings, may not be the best complement to ConcertAI’s trajectory, while the company’s recent quietude and personnel changes also suggest change could be afoot.

Ultimately, regardless of its origins, this change could be welcome, with the clinical markets in which TeraRecon blossomed, increasingly under pressure; AV tools are being incorporated into broader imaging IT platform vendors to enhance diagnostic capability, interest is growing in edge AI and modality vendors are looking to bring such technology to their hardware, and there is growing appetite for the care pathway approach. Competition from leading imaging giants such as Siemens Healthineers, Philips and GE Healthcare is only going to intensify as AV is encompassed into broader diagnostic care packages of modality, edge AI, diagnostic viewer and service line offerings, while emerging AI platforms such as Blackford Analysis, Aidoc and others attempt to carve out their own piece of the imaging analysis market.

ConcertAI’s funding round will not solve these problems for TeraRecon. However, as ConcertAI grows its path will increasingly diverge from TeraRecon’s AV heartland, forcing the latter to act. Whether that is as part of a different parent, or in new partnerships with others, change is essential. For TeraRecon, stasis is unsustainable.

 

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Signify Premium Insights: Structured Reporting – Radiology’s Most Overlooked and Undervalued Opportunity

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.

Co-written by Amy Thompson and Steve Holloway

Limited radiologist resource has been a long-standing industry concern. While there are an increasing array of products and technologies that are available to offer significant efficiency and workflow improvements to the radiology workflow, some have enjoyed far less commercial traction than their capability warrants. As detailed in Signify Research’s latest report from its Imaging IT Market Intelligence service, structured reporting is one such innovation.

Structured reporting offers radiologists and healthcare providers numerous benefits. By using structured reports, radiology departments can improve the efficiency of their reading and standardisation of report content. The removal of ambiguity in reports supports collaboration across teams and supports improvements in care quality, an ever-greater priority as providers form multi-disciplinary teams to facilitate better patient care and diagnosis.

Beyond improving reports the adoption of structured reporting will also help bestow healthcare providers with a wealth of clean, standardised healthcare data that can be used to improve and develop new diagnostic techniques. As this quantity of data available to providers grows, there will also be opportunities to support the use of precision medicine or further develop and refine AI algorithm development. These benefits will become greater as providers adopt structured reporting at scale, with full enterprise-wide deployments necessary for the maximal advantages to be realised.

Using structured reporting can also have a positive impact on providers’ finances too. Adoption of the technology can, for instance, reduce the risk of missed revenue associated with incomplete reports. More simply, the adoption of structured reporting will also help providers to operate more efficiently across diagnosis and treatment, and as such, save providers’ resources. The potential of federated diagnostic data, enabled with structured reporting, also has substantive commercial value to providers, with the pharmaceuticals and clinical trial sectors especially interested in obtaining high quality, annotated radiology data.

Slow to Bite

Despite these advantages and the potential of the technology, adoption has so far been sluggish. This is, in short, because customers have been slow to demand structured reporting, making it a lower priority for imaging IT vendors to advance past voice recognition or basic reporting templates. There are also some more specific barriers such as the lack of national frameworks for reporting standards, overcoming traditional free-form reporting culture within radiology and the relatively complex integrations required to embed structured reporting across all radiology reporting workflows.

Best of breed vendors and some imaging IT vendors have started developing advanced structured reporting tools using integrated AI and NLP technology to support “no-click” report generation to  overcome these barriers. However, from an imaging IT vendor’s perspective, the customisability and complexity of such tools mean they are relatively demanding of resource to develop, implement and deploy. This is exacerbated by the lack of a standard framework of how reports should be structured, therefore each customer requires the product to be reconfigured. For a midsize vendor, this requires R&D technical investment that it can ill afford to spend, especially when broader focus and resources are increasingly geared towards bidding for larger enterprise imaging or PACS contracts in order to maintain presence in the increasingly competitive and consolidated market. Consequently, the cost of developing a structured reporting add-on cannot be justified in many markets, as the return on that outlay will not be felt for several years with mainstream adoption in mature markets not expected for 5-7 years. Furthermore, structured reporting integration  is rarely a customer “deal-breaker” for major contracts.

The prioritisation of R&D for imaging IT vendors is complex, with many competing investments needed across the core imaging platforms, as outlined in figure 1 below. Vendors are being led by customer needs, which at present are centred around the transition to cloud, enterprise imaging strategies or the integration of AI, all of which are deemed to offer a greater return.

Figure 1: Structured reporting alongside other R&D areas of focus for imaging IT vendors, with our view of when, based on mainstream adoption, renewal cycles and product readiness, vendors can expect ROI from their investment.

A Base on Which to Build

The irony of this lack of prioritisation is that structured reporting could contribute significantly to the other, higher priorities that are on vendors’ roadmaps. Structured reporting for example, provides a centralised access point for AI integration directly into the workflow with the key findings being pre-populated within the radiologists’ report. For operational workflow and BI, it helps automate and streamline the workflow with the findings enabling deeper insights across both clinical and operational metrics. The value of structured reporting, is not only in the tool itself but its ability to advance, connect and support the wider enterprise.

The development of structured reporting tools will accelerate as providers begin to recognise the value outside of niche departmental applications. Although structured reporting is readily used in departments such as neurology, surgery and invasive cardiology, these are typically only partial rather than comprehensive solutions closely aligned to procedures as opposed to broader diagnosis. The wider adoption of enterprise imaging strategies at healthcare providers will help heighten awareness of the benefits of structured reporting.

Locally Led

There will also be regional differences in the rate of adoption of structured reporting. Some regions such as the UK and DACH are relatively advanced in terms of uptake. This has been catalysed by technical considerations, such as the availability of structured reporting tools and integration into best-of-breed RIS  workflow components, as well as expanding capability to digest AI and AV findings.

Adoption also varies by provider type. Although some hospitals with stretched budgets will be keen to take advantage of the solutions, particularly on the back of the economic disruption caused by COVID-19, most customers so far have been large academic hospitals. This is primarily because of additional research capabilities that structured reporting will facilitate, with the vast amounts of data it brings offering opportunities in everything from clinical practice to AI development.

Other types of providers, such as outpatient centres have been more reluctant, with the tools, at present, offering them less upside and limited use cases demonstrating the efficiency these products create. To date there has also been little evidence to suggest public or private payer-driven markets will adopt more quickly; while the population health benefits of structured reporting could support public health initiatives, most publicly driven imaging IT deals are focused more heavily on cost and reducing complexity, threatening the potential for widespread structured reporting adoption without widespread case studies outlining the ROI. In the private sector, there is arguably more potential near-term given the care quality benefits and growing commercial value of richer imaging datasets. However, until vendors can provide evidence of the operational, monetary savings or care quality benefits, adoption will be limited to the top end of most markets.

Building Momentum

Adoption will increase, but there is still a long way to go before widespread adoption is common. Vendors should take stock and focus on structured reporting competency as a clear differentiator competitively, even swallowing the near-term cost of development in order to lay a foundation for longer-term ROI and deal success. Case studies of successful deployments will also be crucial to prove the advantages of their solutions and allow them to categorically quantify the impact their tools had on their existent customers. Over time, providers will increasingly stipulate structured reporting capability in their tenders, so those that invest in the technology earlier will benefit as customer demand catches up.

However, it is the broader impact of structured reporting that should be most compelling to vendors and providers alike. As AI adoption gathers pace, structured reporting will be at the intersection of ensuring AI-driven results are embedded into the radiologist workflow without slowing reading. Furthermore, broader research, care quality and population health initiatives will increasingly rely on real-world evidence from the federated output of structured reporting.

Healthcare providers may have limited capacity to undertake substantial changes to radiology reporting workflow and care practices currently as they battle the tail-end of the COVID-19 pandemic and resources are stretched. Before long however, the penny will drop that structured reporting deployment can have substantiative benefits in radiology and across the care continuum. Some vendors are gambling this will happen far into the future. Based on Signify’s recent research, however, we believe the realisation of the importance of structured reporting might occur much more quickly given its foundational impact on the success of next-generation imaging IT. In a market where competitors are clawing for differentiation in a commoditised market, structured reporting is today perhaps the most overlooked differentiator of all.

 

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