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Revenue growth for fixed General Radiography and Fluoroscopy is set to reach 10% and 8% respectively in 2021

The fixed digital radiography market is expected to grow at 10% year-on-year in 2021, reaching $1.1 billion, whilst the fluoroscopy market will also experience good levels of growth at 8%, closing 2021 at $463.2 million. These figures, taken from Signify Research’s General Radiography & Fluoroscopy – World 2021 report, show an encouraging rebound after a challenging 2020, during the COVID-19 pandemic.

Demand to switch from mobile to fixed radiography in 2021

The general radiography market grew by 12% in 2020, due to the exceptional demand for mobile radiography systems. The world market for mobile radiography systems is estimated to have increased by an impressive 77% year-on-year.

Mobile digital radiography (DR) systems are at the forefront in providing initial screening for pneumonia, a secondary and more progressive stage of COVID-19 in severe cases. Mobile DR systems are also used to track progression of pneumonia due to the capabilities of bedside imaging, enabling their use in emergency rooms, A&E facilities and in the ICU. During the peaks of the pandemic, hospitals and healthcare facilities around the world were desperately attempting to procure mobile radiography systems to supplement existing inventory in the face of supply shortages at most of the leading vendors.

As healthcare facilities rapidly sought out mobile systems, often discarding brand loyalty for whatever systems were available, budgets were diverted away from fixed radiography systems and fluoroscopy systems. The fixed digital radiography (DR) market declined by 14% year-on-year in 2020. In unit terms, 11% fewer fixed DR systems were sold in 2020. As the pandemic begins to subside, and healthcare budgets gradually return, investment in the fixed general radiography market is projected to return to pre-pandemic levels by the end of 2021.

On the contrary, the global market for mobile radiography systems is projected to see a sharp decline of 39% in 2021. With most hospitals and health clinics having recently purchased mobile radiography systems during the pandemic, the inflated installed base will restrict the need for new systems in the coming years. The market is forecast to return to growth in 2023, driven by the replacement of older analogue systems.

Stronger growth forecast in multi-purpose fluoroscopy

The fluoroscopy market experienced a challenging year in 2020. With fluoroscopy budgets diverted to COVID-19 response, alongside fewer fluoroscopy procedures, the market saw a 19% decline in revenue. Clinical demand is shifting away from fluoroscopy to CT and endoscopy, further threatening this market. The main procedures that remain a stronghold for fluoroscopy include barium-swallow scans and upper GI procedures. Stronger growth is forecast for multi-purpose systems which can perform both radiography and fluoroscopy, due to wider clinical usage and associated higher return on investment. After the steep decline in 2020, the fluoroscopy market is expected to gradually recover and surpass 2019 revenue levels by 2024.

Key trends by region

North America

  • Unlike most other world regions, North America and in particular the United States, remains a classical fluoroscopy market, with far lower uptake of remote imaging, due to the associated detachment from the patient and concerns of jeopardising image quality and subsequent litigation.
  • Brand loyalty continues to be strong for general radiography equipment, to prevent retraining and adjustment of workflows.

Latin America

  • Demand for analogue and CR systems remains high in Latin America, with the lower prices being a key deciding factor. In Brazil it is estimated that 85% of general radiography exams are still conducted on analogue systems, a far higher number than many other emerging countries. However, with falling prices of flat panel detectors, digitalisation is expected to gather pace in the coming years.
  • Fluoroscopy remains a small market in Latin America due to the relatively high system prices yet lower utilisation due to the niche clinical applications they address. The shortage of trained radiographers is also holding back the fluoroscopy market.

Western Europe

  • The general radiography market in Western Europe continues to remain focused in the higher end market segment, especially floor-mounted systems.
  • Fluoroscopy continues to be a very small market in most Western European countries, with France being the exception, where the market for remote systems is forecast to increase over the coming years. France is unique in that hospitals use fluoroscopy for patient positioning and to localize where to start imaging, and this modality is therefore used frequently. Additionally, there is a strong replacement market and older systems are typically replaced like-for-like and not with a multi-purpose system. Most other Western European countries have much less uptake of dedicated fluoroscopy equipment.

Eastern Europe, Middle East and Africa

  • Lower-cost analogue solutions continue to sell well in the African general radiography market. In Eastern Europe there remains a focus on floor-mounted digital X-ray solutions, as the lower price point is a key factor in this price-sensitive market.
  • French speaking parts of North Africa still have a strong demand for fluoroscopy systems, following France in this trend. Elsewhere, demand remains lower.

Asia Pacific

  • The fluoroscopy market is largest in China and Japan, with all other Asian countries having very limited uptake, as other modalities are favoured for traditional fluoroscopy procedures.
  • Lower cost floor-mounted systems continue to dominate the general radiography market, especially in China.

Competitive analysis

In 2020, Carestream consolidated its position as mobile DR market leader, followed by GE Healthcare, Siemens Healthineers, Philips and Fujifilm.

Siemens Healthineers and GE Healthcare secured the position of joint market leaders in the fixed DR market, with GE Healthcare gaining significant share in 2020.

Siemens Healthineers was the world market leader for fluoroscopy in 2020, with Shimadzu, Canon Medical and Philips following.

Future outlook

The fixed DR market will rebound in 2021, as budgets and investment will return to fixed radiography rooms. Signify Research forecasts investment will gradually return for high-end DR solutions, such as ceiling suspended and multi detector systems from 2021 onwards. Growth in the low-end fixed DR market is forecast to primarily come from emerging regions, such as Africa, Latin America and Asia, where there is a significant installed base of analogue radiography and computed radiography ready for digitalisation. Growth in the fluoroscopy market will be limited as clinical procedures move from fluoroscopy to CT or endoscopy. As a result of increased focus on cost-efficient solutions and return on investment, most of the demand for fluoroscopy equipment will be captured by multi-purpose systems capable of performing general radiography procedures.

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Signify Premium Insight: GE Healthcare’s New Beginning

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 week GE made headlines when it announced that it was breaking up into three separate businesses. The firm, which at one time was the world’s largest, revealed that Healthcare will be the first of GE’s business units to be spun off, with the split taking place in early 2023. In separating GE Healthcare from GE’s Aviation and Energy businesses, the company will enjoy greater freedom, despite GE retaining 19.9% ownership of the Healthcare business. This, hopes GE CEO Larry Culp, will give the spinoffs a “greater operational focus” allowing Healthcare, along with the others, to be more flexible in targeting their own specific sectors.

The Signify View

Talk of GE splitting out its healthcare business is nothing new. In 2018, then CEO John Flannery laid out a plan for carving out the conglomerate’s Healthcare unit and establishing it as an independent business. This, he said, would provide the “best environment” for the healthcare business to flourish, and enable it to seek investment and opportunities on its own. Although those plans were shelved with the removal of John Flannery in 2018, the possibilities remain the same. A GE Healthcare unbound by the wider GE enterprise and the hardships it has faced since the 2008 financial crisis is still potent.

This newfound  freedom could, in the near term, be evidenced by the company taking an increasingly acquisitive attitude. Until GE Healthcare’s recent announcement that it had picked up BK Medical for $1.45bn (read our analysis here), the company had not made any significant acquisitions in imaging in more than four years, due in part to belt tightening at a GE corporate level. This recent dearth of acquisitive activity is in contrast to the vendor’s closest competitors, Siemens Healthineers and Philips, which have both bought up a string of companies in recent years. Siemens has picked up several vendors including Medicalis, Corindus and most-recently Varian, a $16bn investment set to be a major growth engine for the business in coming years. Philips meanwhile has also been busy, purchasing Carestream Health in 2019, BioTelemtry in 2020 and Capsule Technologies in 2021 among a number of others.

These acquisitions have enabled Philips and Siemens Healthineers to ready themselves for an increasingly digital future focused around precision medicine in which larger, more comprehensive managed service contracts are the norm. Today, Siemens and Philips are arguably better positioned for growth in the coming decade compared to GE Healthcare, which, despite being innovative internally, remains on the back foot. GE’s separation puts the vendor in a better position to fight on this front and make up lost ground.

One Vision

For this to happen GE Healthcare must establish a vision for its future and commit to a strategy to lead it there. This is another of the commonalities shared by Siemens Healthineers and Philips. For Philips, early in the last decade it saw great potential in the healthcare technology industry. Over time it sold off its other business units so could focus myopically on premium healthcare technology with a very strong emphasis on service and partnerships. Siemens Healthineers meanwhile has always strived to be a master of technical innovation and has focused heavily on precision medicine. That isn’t to say other vendors don’t share the same competencies, but Siemens and Philips have always maintained a certain clarity of vision and market reputation.

At GE Healthcare this focus has been somewhat lacking. This could in part stem from GE Healthcare’s origins in the wider GE conglomerate, which sought success in every corner of industry. GE Healthcare’s approach is similar, with the vendor a reliable performer across the board, yet no clear “leadership” identity in major market sectors. After separating from the wider GE corporation in 2023 however, GE Healthcare would benefit from prioritising and promoting several clear strategic aims. The vendor should commit to exceptional excellence in some areas in which it is already strong, such as radiology, critical care, women’s health and enterprise clinical analytics.  In doing so, and in investing in these areas, GE could foster innovation within the company and help develop areas as significant commercial differentiators compared to competitors.

Less tangibly, GE Healthcare’s release from the broader conglomerate and a clear, new vision for the company to rally around is likely reinvigorate the vendor. GE has endured several difficult years of paying down debt and striving to increase margins. These problems will not disappear, but GE’s other units are likely to bear their brunt. GE Healthcare’s freedom will offer something of a fresh start, with its now unconstrained leadership team able to chart their own course.

 Freedom isn’t Free

There are some sacrifices GE Healthcare will have to make in exchange for its newly found freedom. It could, for example, lose out on some opportunities which see healthcare equipment rolled into, or added onto a deal struck for a completely different industry sector. Some opportunities for major government tenders could have been opened in the past by connections made in deals for products made by GE’s other business units, or chosen on the back of sterling service provided in major tenders for other GE products. Although these deals would not have been common, they were sizable and long-term.

As well as no longer being able to benefit from the wider conglomerate’s reach, Healthcare may also miss its access to GE’s infrastructure. This could be in the form of company-wide software platforms and systems (such as the previously much touted Predix industrial intelligence platform), or supply chains and the economies of scale that may reduce the cost of some of the raw materials or components used in the manufacture of its medical imaging systems and other equipment, for example.

In reality, these are small and not insurmountable prices to pay compared to the possibility offered by the separation. Whether this possibility is being realised, however, will depend on whether GE Healthcare is able to hit certain achievements in the coming years. Speaking of the separation, Larry Culp said it would enable investment in both existing and adjacent markets. This needs to be attended to immediately, with GE investing not only where it is itself strong, but in making acquisitions where it is less prominent. Two obvious areas where acquisitions could significantly bolster the vendor are in the interventional and surgical space, and in digital pathology. The acquisition of BK Medical has added firepower to GE Healthcare’s interventional and surgical ultrasound offering, broadening its capability and helping to round out its portfolio, but there is still more to be done with other modalities. Digital pathology, meanwhile, is set to be a significant growth area in the coming years, and at present, GE lacks strong capability in this space following its earlier acquisition and wind-down of Omnyx.

The Value of Prestige

In addition to clarifying its mission and making several key acquisitions, GE should also aim to establish leadership positions in a select few, high-status areas. While GE is the market leader in a number of segments in terms of installed base, these tend to be in more price competitive markets. GE Healthcare would garner a great deal of cachet and credibility if it were able to assert itself both commercially and technically in one of the more advanced and prestigious market segments.

Broadly, GE’s split emphasises that the golden age of the traditional industrial conglomerate is over. But instead of a death knell, that represents the breaking of a new dawn for GE Healthcare, which now holds its destiny entirely in its own hands. If GE Healthcare can inspire its customers, its employees and its investors, and capitalise on the opportunities available to it, then the vendor is more than capable of not only maintaining its global leadership position in the medical imaging market, but doing so in a way that is more innovative, better addresses the spectrum of customer needs and is ultimately more profitable.

 

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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