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Signify Premium Insight: The Power of Perspective: AI Vendor Sentiment Index Q2

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Co-written by Dr Sanjay Parekh

Each vendor has a unique view of the market. One of the deliverables offered as part of Signify Research’s AI in Medical Imaging Service, the Vendor Sentiment Index (VSI), captures these views and assesses how confident vendors are feeling about the overall imaging AI market outlook, their ability to establish pilot sites and their ability to convert the pilot sites to paying customers or secure new commercial deals over the coming months and years.

With a cocktail of global headwinds, including inflationary pressures and the risk of a global recession, geopolitical tensions, and stretched healthcare systems dealing with a myriad of other priorities, AI vendors could be expected to be nervous about the months ahead. However, with recent success in procuring new (relatively large) funding, and shifts in potential reimbursement (e.g., new CPT codes), there are, for some at least, also reasons to be cheerful.

The Signify View

Data for the latest edition of the survey was collected from vendors during Q2 (April 1st – June 30th) and offers insight into their sentiment towards the following quarter (calendar Q3) and the upcoming 12 months. It includes data from 26 AI vendors, ranging from those with strong global prominence to those which are relatively unknown, alongside engagement from informatics vendors representing more than 58% of radiology global market share, including 6 of the top 10 vendors according to Signify’s vendor market share data.

Some of the findings of the Q2 survey are consistent with the results from the Q1 analysis. AI vendors, for instance remained more confident than their imaging IT counterparts. This makes sense. Imaging IT vendors are, for the most part, longer established, have more historical experience of the market, and frequently interact with a broader array of healthcare providers, companies providing support and tertiary services, and other vendors. Their point of view is likely to be wider than that of a smaller AI vendor, which has a more specialised focus on its market. As such, imaging IT vendors could face a larger number of risks or face greater exposure to them compared to dedicated AI vendors.

In addition, young, hungry AI vendors, developing not only new products but entirely new product categories, using hitherto unutilised technology, and attempting to sell their wares to often sceptical and cash-strapped providers need to be bullish. Why would they take on such a challenging endeavour if they didn’t believe their product promised worthwhile returns?

There are also some more pragmatic reasons AI vendors can be confident in the face of incoming global headwinds. While providers still face barriers such as clinical validation and technical and legal hurdles, which are stymieing the adoption of medical imaging AI tools, progress is being made. In June, for example, Optellum’s solution became eligible for reimbursement, highlighting that AI solutions are making progress towards becoming more cost-effective and a viable value proposition beyond efficiency gains. During the quarter, there were also some significant funding rounds, such as Viz.ai’s $100m haul, highlighting that AI vendors aren’t out on a limb, with investors also confident in the future of the technology. This, in turn, bolsters the confidence of AI vendors’ Q3 and beyond outlook, as reflected in the VSI.

One of the major observations, however, was that the overall results for the second VSI survey (Q3 outlook) were more conservative and less positive compared to the first VSI survey (Q2 outlook). This was especially true for vendors’ outlook on commercial deployments, which is likely to be a significant influence behind the gloomier outlook in the market overall.

Summer Slowdown

Another trend that held over from the Q1 index was that vendors were more confident about the coming 12 months rather than the coming quarter. This is understandable. The Q3 period, July, August and September, is, especially in Europe, often slower for businesses. Staff are taking vacations, and major purchases and installations are often delayed until the autumn. As such for the three metrics assessed (overall market outlook, pilot installs and commercial deployments), it is likely that vendors expect less activity over the summer months, ramping up over Q4 as teams get back from the summer holiday period, and events like RSNA give them a chance to promote their products.

As such, an uplift in confidence should be seen in the next survey, for which data is currently being collected, which assesses vendors’ confidence in Q4 onwards. This will prove to be something of an acid test. If confidence remains low, it could illustrate the severity of the challenges ahead, and weigh on the overall market outlook for the year ahead. Adoption of AI in medical imaging has long been forecast to be a measured process, but a lack of confidence in the ability to find pilot sites and secure new commercial deployments will highlight that the rollout will take longer than expected.

Alternatively, the fall in confidence seen in the Q2 index may instead represent a return to “normality” after the overconfidence observed among some vendors in Q1. At that time some vendors were perhaps overly bullish, with the lingering optimism from the last RSNA show, and the recession of the Omicron wave of Covid-19 offering a cause for confidence. However, it appears vendors may have failed to consider the other global challenges affecting the fortunes of the AI and imaging IT market performance.

Cooling Confidence

How significant the impacts of this tempering of confidence remains to be seen. It could represent nothing but a periodic bump in the road, with the overall trend of the market still overwhelmingly positive. Alternatively, there could be several, relatively swift repercussions. For imaging IT vendors, which are juggling lots of different priorities, a lack of confidence in the near-term commercial potential of AI solutions, including AI platforms, could encourage them to increasingly focus on these other areas. They are, after all, also looking to facilitate transformative changes among providers, with cloud adoption, enterprise imaging strategies, and workflow integrations, among the other burgeoning trends.

This could be particularly true given the reduction in confidence of securing commercial deployments for both AI vendors and in particular imaging IT vendors, whose confidence fell 2.3 points from 7.0 to 4.7 for the quarterly outlook, and 1.9 points for the 12-month outlook from 7.7 to 5.8. AI vendors are focused only on selling their AI solutions, whereas imaging IT vendors must focus on selling a wider portfolio, which often offers greater margins. Customers could expect some AI functionality as part of a broader imaging IT deal, or AI tools could be used as an incentive to make a deal, for example, with these types of negotiations relying on the sacrificing of AI’s potential for broader commercial aims.

Year-End Celebrations

Despite these nuances, confidence among both imaging IT and AI vendors is, overall, expected to improve in the next survey, with vendors likely to feel more optimistic about both the outlook in Q4 and the following 12 months, in terms of both commercial deployments and pilot sites. There are several factors, from funding to reimbursement that have emphasised the potential of the market going forward. Beyond that, RSNA presents vendors with an opportunity to demonstrate and promote products. The corollary of this expected optimism will be a shrinking of the gap in confidence levels between AI and Imaging IT vendors. Imaging IT vendors are likely to have new AI products at RSNA, while the AI capabilities added to their existing solutions will also have matured, rendering AI a more important part of their offering.

Conversely, if the optimism of imaging IT vendors continues to lag severely behind that of AI specialists, it could either signal a change in strategy and a de-emphasising of AI, or market traction is far slower than previously anticipated, despite AI vendors’ bullishness. Longer-term, other trends could start to dampen vendor confidence, which may represent difficulty in the overall market. Increased competition, for example, could make it more difficult for individual vendors to secure pilot sites or commercial deployment, hurting their confidence. However, the fact that the market can sustain such competition is indicative of its overall health (and depth of investors’ pockets). Another, similar factor ties into the ongoing product evolution of AI solutions. As tools are becoming increasingly sophisticated and focusing on entire care pathways and downstream outcomes, or evolving into comprehensive solutions, for example, less complex tools risk being commodified. As this happens, some AI capabilities may become ‘just’ another feature of an imaging IT system, rather than a stand-alone product with a robust value proposition. Some vendors would see this opportunity very differently to others, resulting in varying confidence levels.

Such concerns can be left for the future. At present, different vendors are drawing different conclusions about the opportunity the market offers. The coming quarters offer a chance for AI to make significant progress, allowing vendors to close out the year on a high. However, if this fails to happen, and vendors still fail to see the upside, 2023 could instead become a year of reflection and renewal instead of growth and optimism.

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Signify Premium Insight: AI Making the Move to Maturity

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.

Dr Sanjay Parekh, Senior Analyst

The medical imaging AI market is among the most dynamic of all the sectors in medical imaging. Its nascency, its rate of technical development and the application of the technology are combining to create a market that is changing incredibly quickly.

Despite the volatility of the market, senior analyst and author of Signify Research’s AI in Medical Imaging report, Dr Sanjay Parekh, has been able to discern several key trends in the market.

Great Growth

“The market for AI-based image analysis tools for medical imaging is set to reach $1.36bn by 2026,” Parekh states, “up from $402m in 2021.” Much of this revenue is for stand-alone AI tools, but AI-based advanced visualisation (AV) bundled AI tools are also included (accounting for 27% of the total market in 2021).

This represents a CAGR of 27% between 2020 and 2026, highlighting that the AI market is gaining momentum, many of the reasons for which are clear.

“There was for instance a large flurry of regulatory approvals in 2020 and 2021. In the US in 2020 for example, there were more approvals than in 2018 and 2019 combined. There was also the first wave of NMPA Class III approvals in China. With these regulatory approvals vendors can commercialise their tools.

“As well as having more products on the market, there has been continued progress with regards to reimbursement. There is the continued reimbursement for HeartFlow’s FFR-CT solution in the US, the UK and Japan, as well as parts of Europe. Additionally, pockets of China are already reimbursing the use of FFR-CT tools, but national reimbursement is still pending. There has also been a flurry of Category III CPT codes [for which there is no compulsory reimbursement] provisioned for quantitative image analysis tools for ultrasound, MRI and CT, which as well as encouraging the uptake of AI, could lead to reimbursement. While NTAP payments have also been renewed and expanded, such as the recent Optellum clearance, which has defied the norm and will now receive reimbursement for its Virtual Nodule Clinic solution for lung cancer despite the CPT code remaining as Category III.

“All of these factors combined will help the markets continue to grow.”

Areas of Interest

Growth will not be equal across all clinical segments, however, with four areas, which currently represent around 87% of the market, set to continue to stand out. These are cardiology, neurology, pulmonology, and breast imaging, with each having facets that mean they are likely to continue powering growth for AI vendors.

Use of AI is the most mature in the breast imaging market; however, opportunities for growth are more limited than elsewhere. “Because of the relatively limited number of use cases; namely breast nodule detections and breast density analysis, the breast imaging market will not to be as large as the other three,” continues Parekh.

“Cardiology is likely to account for the largest proportion. This will be driven by two factors. The first is increasing uptake and continued reimbursement for FFR-CT tools. Even accounting for its failed SPAC merger, HeartFlow, one of the success stories for the medical imaging AI market, has a relatively large install base and strong commercial traction as well as still offering an appealing value proposition. There are also opportunities for FFR-CT, especially in China, as vendors like Keya Medical, Shukun Technologies, and Raysight receiving regulatory approval for their FFR-CT tools.

“In addition, clinical guidelines recommending CT imaging as a first line diagnostic procedure will drive the adoption of AI.”

Stroke care is also set to rally.

Neurology will be a growth area mainly because of stroke imaging AI solutions. The NTAP code for stroke LVO, which was first issued in 2020 to Viz.ai and then renewed in 2021, was renewed again in 2022 and it looks set to be made permanent soon, thanks to the uptake of stroke imaging AI tools and the increased use of the code in such instances.

“Not only has the payment been created, but providers are using it and its use shows that providers value the end-to-end stroke solutions which benefit the entire care pathway as well as the radiologist.”

There are also other opportunities within neurology, with brain quantification tools, for example achieving moderate success. Some vendors offering such tools are generating revenue, but, while these will continue to be valued, other drivers such as the commercialisation of drugs for neurodegenerative disease are needed before they become a major driver of growth.

“Finally, in pulmonology, the relative value of using AI market is smaller compared to FFR-CT or head CT for example. Although there are vendors working on comprehensive solutions for both chest X-ray and chest CT that do restore that value, the most successful among them are setting a benchmark for other tools looking to gain traction. Further, the continued roll-out of screening programmes for lung cancer and TB, for example, will drive further traction in this market.”

Relinquishing a Point

There are commonalities across these clinical areas, however. It is becoming clear that the utility of point solutions across modalities and clinical areas is in general, very limited. Developers who can only offer single point solutions are looking increasingly unlikely to be selected by providers.

Instead, tools that offer the most value to providers will gain success. This value, however, can manifest in various ways. Many solutions focus on efficiency, but there are also solutions that could actually slow diagnoses, but still enhance the quality of a diagnosis by offering additional metrics, for example. This value is, in some cases, also no longer derived from incremental improvements in specificity or sensitivity that new tools might offer.

“If you offer 93% accuracy compared to 92%, is that going to make a difference,” Parekh asks. “Are you going to get a better diagnosis or is the patient going to be on a completely different treatment pathway? No. Instead value is extended beyond the analysis of the pixels in an image, to patient care and improvements to the clinical care pathway. The vendors that have started doing that are the ones that are going to succeed.

“Breast imaging tools, for example, that combine detection, quantification and classification of nodules, which are far more valuable than those which only offer nodule detection. Moreover, adding in breast density analysis will enhance the value proposition of such a solution even further. More significantly, however, are the tools that are looking at radiology more broadly and seen to offer value across the clinical care pathway (beyond the radiologist). These solutions can come from vendors which solely offer AI, or those which also offer capability to deploy and integrate AI.

“These vendors can bring in advanced visualisation capabilities, workflow capabilities and even structured reporting capabilities to address a given use case, while also offering their own native or third-party AI image analysis capabilities to create entire workflow packages. That is AI demonstrating value.”

Money to Money

Value is also forthcoming in a broader sense. Despite the turbulence in some tech markets and in some corners of the medical imaging market, investment for medical imaging AI vendors is still available, although it is becoming more discerning.

“Investors seem to be more than willing to continue to back vendors that have already shown progress,” opines Parekh, “but we are not seeing many Angel or Series A rounds.”

“Where we are seeing a lot of action is for the later-stage funding rounds, which are increasing in both size and number. This indicates that a set of market leaders are being established, such as the $100m funding club [a term coined by Signify Research including vendors that have received more than $100 million in total in venture capital funding]. Even with this greater investment in established companies we are starting to see evidence of a market shakeout.

“Last year we saw Nanox acquire Zebra Medical Vision, at the start of 2022 we have seen MaxQ-AI closing its radiology business, and Sirona acquiring Nines. RadNet, a large outpatient imaging group in the US also acquired two Dutch-based AI start-ups Aidence and Quantib to add to its portfolio after previously acquiring DeepHealth, and expand its push to deploy AI across screening for some of the most prevalent cancers. There is also some speculation about some other vendors also making pivots after not receiving funding that was expected. We have seen consolidation coming for a long time, but between the investment being focused on the largest vendors, and the difficulties for the smaller vendors, we are starting to see the shakeout take place.”

The impact of this market shakeout will be different in different regions. One area that is more difficult to make predictions for is Europe. Presently, the Western European market is starting to catch up with the US, but this growth is expected to stagnate in May 2024 when the new European Union Medical Device Regulation (EU MDR) is coming into force. There is currently a backlog of 12 to 18 months for vendors to upgrade their CE Mark to the incoming regulation, not to mention the more stringent requirements for this regulation. This raises the possibility of many vendors missing the deadline and therefore being unable to offer their products commercially in the EU.

Approval Ratings

This could have significant impacts, say Parekh.

“It is more likely that the larger vendors, the ones with the funds to pursue the MDR, will be the first to receive it. If you are a smaller vendor, then you may not want to, or be able to go for MDR approval. Ultimately, that will leave those that have MDR certification by May 2024 with an ‘early-to-market’ advantage over those that don’t. It could effectively level the playing field, and serve as a reset button, with only those that have been able to secure the new certification, regardless of past CE Mark approvals. This regulatory backlog is also therefore likely to hold back the market as a whole.

“It could also lead a lack of innovation, with smaller start-ups and research groups shifting their focus from radiology, keen to avoid the additional barriers they must pass, so there could also be a short-term innovation gap. This is another reason we could see more consolidation in the market.”

Despite these challenges the future is still bright for medical imaging AI vendors. The market increased by more than $60 million between 2020 and 2021, and growth is only set to continue. This shows a young market taking the first steps to maturity and a nascent technology making the first moves toward more mainstream adoption.

“Overall,” Parekh concludes, “it is growing, at a steady pace for now but with a big ramp up in the medium term, from 2024 onwards.”

“All signs are positive.”

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The Medical Flat Panel Detector (FPD) Market Experienced a 4% Increase in Unit Sales in 2020

Cranfield, UK, February 23rd 2022; Written by Bhvita Jani and Graham Cooke: The medical flat panel detector (FPD) market experienced a 4% increase in unit sales in 2020 reaching a market size of just under 70,000 units. However, the market revenues declined by almost 10%, equating to a market size of $2.1 billion USD. Market fluctuations echoed those seen in the X-ray modality markets, with static FPDs used primarily in fixed digital radiography (DR) rooms and mobile DR experiencing  10% year-on-year growth. Growth was driven by healthcare providers globally buying mobile X-ray systems for diagnosis of pneumonia as an indicator of COVID-19. Conversely, the market for dynamic panels, often used for fluoroscopy, surgical and interventional procedures, saw a sharp decline with units falling by 18% from 2019 to 2020 as elective surgeries were postponed or cancelled.

Signify Research predicts the medical FPD market to reach 85,000 units by 2025.  However, as average selling prices are expected to continue to fall, market revenues are predicted to decline.

In 2021, market dynamics shifted with demand for static panels used in mobile radiography declining, as the surplus demand in 2020 had been met during the initial waves of the pandemic. However, as elective procedures returned in 2021, demand for dynamic panels for mobile C-arm and interventional applications subsequently increased. In 2021, unit sales of dynamic panel increased by just under 15%, almost returning to pre-pandemic levels.

Wireless flat panel technology is increasingly adopted globally

Demand for wireless technology is continuing to increase in applications such as fixed and mobile radiography, especially in developed markets where benefits such as increased workflow capabilities are widely recognised. In 2020, wireless detectors accounted for 53% of all FPD unit sales. By 2025, this is forecast to grow to 61%. Physical parameters such as detector weight, extended battery life, and liquid damage protection also play a role in the purchasing process, although these factors are typically a lower priority than image quality and dose reduction. Purchasers are also paying attention to the pixel resolution and detective quantum efficiency (DQE). Manufacturers of FPDs are developing thicker scintillator layers and increasing the DQE level possible with their detectors.

Suppliers of FPDs are developing new products that have reduced scatter, lower noise, higher resolution and require lower dose exposure, a key consideration for healthcare providers and increasingly for patients as well. A combination of these features can reduce the need for retakes and increases clinical precision, enabling imaging departments to perform more efficiently.

Another key consideration when purchasing FPDs is the reliability and durability of the panel. Providers are demanding more robust, reliable panels, with a greater return on investment before replacement is required. As a result of this, providers are requesting service contracts or extended warranties to support increasing the lifespan of the detectors.

Demand for Gadox continues to decrease

Cesium iodide is the gold standard for medical imaging FPDs, but limited demand for gadolinium oxysulfide (Gadox) panels remains. Cesium iodide panels are more sensitive and produce higher quality images than Gadox equivalents, but come with a higher associated cost. The focus on reducing radiation dose in Western Europe and North America is limiting demand for Gadox panels. However, they continue to be sold in some price sensitive markets across Latin America,  . Demand for Gadox detectors is forecast to decrease throughout the forecast to 2025. As the prices of cesium iodide panels become more affordable, these panels are becoming more accessible to a wider range of customers. In addition, as the dose optimisation benefits of cesium iodide FPDs are further acknowleded in emerging countries, this will drive adoption of this panel type. Demand for Gadox panels will be maintained beyond the forecast period by smaller clinics and independent medical imaging facilities where cost is the primary consideration,

Competitive Analysis

The medical flat panel detector market remains a highly fragmented and competitive sector, with 15 vendors having at least a 2% market share each.  Varex leads with 18%, followed by Trixell Thales in second position and iRay in third position completing the top three.

Chinese FPD vendors gained market share in 2020, due to increased production and surplus inventory to supply to mobile X-ray system manufacturers. As a result, companies such as iRay, Careray and PZ Technology increased their market share in 2020.

Chinese FPD companies continue to drive an aggressive price war, forcing international FPD vendors to re-evaluate supply chains and open production facilities in lower cost countries such as China.

In the coming years, a key opportunity for vendors with cost-efficient FPDs is expected to be developing markets, such as Latin America, Africa and parts of Asia. With many of the countries in these regions having large installed bases of analogue or computed radiography systems, there will be ongoing digitalisation as the affordability of digital X-ray systems continues to increase.

Future outlook  

As the low-end FPD market continues to become saturated and the price ware continues, with newer Asian FPD vendors increasing market presence globally, margins for FPD vendors are increasingly at stake. After years of double-digit price erosion, medical FPD prices are forecast to stabalise with only single-digit price annual declines forecast through to 2025. As a result, FPD vendors are progressively investing in research and development to upgrade their product lines to showcase latest hardware innovation and establish a niche. Such developments include IGZO, flexible detectors, photon counting and addition of AEC chambers on the detectors themselves. Target markets for these higher-end FPD products include developed countries and high-end hospitals where clinical precision is still paramount.

Signify Premium Insight: Signify Premium Insights’ 2021 Predictions – The Results

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At the very start of this year, Signify Research’s analysts assembled to pick the key threads out of the turbulence of 2020 and use them to discern the forces that would shape medical imaging in 2021. Here we revisit the predictions made about the Imaging IT, AI and Modality markets, and assess how clear the crystal ball really was.

Imaging IT and AI Markets

There will be limited releases of advanced clinical and diagnostic tools in 2021

Score: 8/10

This prediction was, with a few exceptions, very accurate. Throughout the year there were only very limited releases of imaging IT solutions that were truly new. Instead, 2021 was for most vendors a year of introspection and refinement. Several hugely impactful technological shifts are on the near horizon, with meaningful AI, cloud adoption and true enterprise-wide imaging IT, but Imaging IT vendors must first prepare their systems for such tectonic changes. While these longer-term goals were being developed in the background, the releases that saw the light of day in 2021 were those focused around workflow and operational efficiency.

There were a handful of high-profile releases, with GE Healthcare’s TruePacs, IBM Watson Health’s AI and Workflow Orchestrator platforms, Change Healthcare’s Stratus Imaging and Nuance’s Precision Imaging Network the standouts. However, in keeping with vendor’s priorities of preparing for the future, several vendors instead shared strategic plans for significant platform releases, and laid out their roadmaps towards these longer-term goals. As such most releases added additional functionality to existing systems or represented vendors catching up with their peers.

Overall, 2021 was, in essence, predominately a year of stage setting, ahead of the real show in the coming years

RSNA 2021 will herald the recovery of clinical and diagnostic innovation

Score: 6/10

This prediction painted an optimistic picture in which Covid-19’s role at the centre of medical imaging and healthcare in general would fade throughout the year. Vendors and providers alike would therefore be able to increasingly devote their resources to technological innovation, vendors would arrive at RSNA 2021 bristling with innovative leaps and providers, who had been holding off making purchases until they saw these new products, would arrive in Chicago ready to buy.

The reality was somewhat different. RSNA 2021 was smaller than previous years’ meetings with both fewer attendees and fewer exhibitors. There were some innovative new solutions on display, but, as predicted many of these had already been given soft launches earlier in the year, with the likes of Sirona Medical, Paxera Health and Change Healthcare all demonstrating products that had broken away from the traditional show-based release cycle.

At RSNA 2021, surprises, one of the clearest indicators of innovation, were few and far between. However, the foundations of innovative new products were being built, with quiet conversations taking place amongst vendors, heralding the formation of partnerships, between vendors and providers as AI developers and others look to forge ahead with pilot and clinical validation studies. The buds of innovation were quietly growing, even if the blossom was not yet on display.

Structured reporting will gain further traction in 2021

Score: 10/10

This is exactly what happened throughout 2021. While structured reporting isn’t yet universal or essential, the number of developments made in this direction are hard to ignore. From Agfa Healthcare’s release of its Precision Reporting tool, Smart Reporting’s marquee agreements with GE and Siemens to Blackford Analysis’ integration into the 3M Modal Fluency Direct reporting tool. This latter example is particularly significant as the integration of AI into a reporting solution not only exemplifies the strides structured reporting has made this year, but also places the two highly complimentary technologies together, allowing each to bolster the other and therefore help drive the adoption of both.

Structured reporting will only become more important. As AI becomes ever more significant, diagnostic data will become key, and this is what structured reporting unlocks.

This progress doesn’t mean there is no more work to be done, structured reporting isn’t yet the competitive differentiator it is set to become, and it isn’t yet a mainstay of dedicated premium offerings, as it will be. Perfecting structured reporting is difficult, doubly so when considering its clinical integration and deployment, but the corner feels like it has been turned and momentum is building. This is true both of the releases that have been made over the year, as well as the subtler anecdotal examples, with many vendors who have not yet made announcements working hard away from the limelight to bring the technology to bear.

As predicted, for many 2021 will have been the year that saw structured reporting move from longer-term strategy to current objective.

There will be consolidation in the AI market

Score: 2/10

This prediction fundamentally rested on the assumption that the medical imaging AI market, which at present is worth only several hundred million dollars, was too small to support the hundreds of developers trying to capitalise on the space. This assumption was true in and of itself but underestimated the continued appetite among VC investors to artificially support the market until revenues increased. This was particularly true in some parts of the world, with investors in several countries including China and South Korea keen to continue investing in their country’s young AI outfits.

Many vendors did recognise that success would be difficult to achieve alone, and that they would struggle against more established and better funded competitors, but instead of becoming acquisition targets, some of these vendors forged partnerships with other AI vendors, or indeed became targets for partnerships, allowing multiple vendors to combine their capabilities in a bid to create a more attractive package for providers.

It could be inferred that some vendors did have to make difficult financial decisions. One of the only major examples of consolidation saw Zebra Medical Vision bought by the challenger modality vendor Nanox. As highlighted at the time, Zebra had not secured any VC funding in several years and an acquisition from Nanox, a vendor rich in cash after its 2020 IPO, could have represented something of a lifeline for the Israeli developer. Aside from this, however, M&A activity was limited.

This consolidation is expected in the future, but amid the continuing Covid-19 volatility, healthcare represents a relatively safe haven for investment. Whilst ever this investment is forthcoming, the majority of this consolidation can be staved off.

The Imaging IT market appears relatively robust in the face of Covid-19

Score: 8/10

The difficulties faced by many medical imaging IT vendors throughout 2020’s covid related disruption meant that when this prediction was made the future was very uncertain. The cancellation of countless lucrative elective procedures as well as the swift reprioritisation of budgets at providers meant that for a spell, the outlook for 2021 looked bleak.

As highlighted in the original prediction, Imaging IT’s recurring service-based revenues and the additional Covid funding was expected to be enough to support the market throughout 2021.

However, while all these elements rang true, the prediction was too conservative, and, as illustrated in the chart below, the overall market is forecast to perform more strongly than originally anticipated; largely bolstered by the recovery of mature imaging IT markets. Upsell of home reporting, universal viewing, workflow tools and professional services further also buoyed the market.

The above compares annual growth for the global imaging IT market (inclusive of radiology IT, cardiology IT and advanced visualisation IT). Data points are from: Signify’s original 2020-2024 forecast (pre-covid); the COVID scenario analysis conducted in January 2021 which provided interim guidance on perceived best case / worst case scenarios for the imaging IT market; from the latest Imaging IT Core Report, published August 2021, we’ve included the 2020 actual market numbers and 2021-2024 forecast.

 

Modality Markets

Expanded access to medical imaging

Score: 9/10

This prediction proved to be one of the major trends in medical imaging modalities throughout the year, with many different vendors across different modalities being represented. In ultrasound, and particularly handheld ultrasound where this path has been trod for the last few years there was a major new product release from GE, as well as progress from a growing cohort of challenger vendors. Butterfly Network, which leads this pack, completed its IPO deal earlier in the year, while a number of other handheld players, including, Clarius, Vave, Exo, EchoNous, Pulsenmore, and more were all represented.

This trend was far broader than handheld ultrasound, however. MRI and CT saw progress from the likes of Siemens Healthineers and Philips which both launched MRI systems that enable the modality to be adopted in new clinical settings, through developments such as lower cost, lighter systems, easier to install, and the lack of requirement for helium refills. There were several new mobile X-ray systems launched or teased, including those from GE and Konica Minolta, reinforcing the growth opportunity of this product segment not only in developed countries, but to provide access to imaging in emerging countries. In addition, younger, challenger vendors such as Hyperfine, Turner Imaging and Nanox, also made headlines, although their progress in the market is harder to ascertain.

More broadly, outpatient sites are also playing a larger role in medical imaging, this transition is further expanding access to medical imaging, with many patients now able to access many scan types closer to their homes and places of business than in the past.

AI-enabled imaging acquisition

Score: 9/10

This is another prediction that resolutely came to fruition in 2021. The clearest illustration of this trend was at RSNA, which saw AI image acquisition and quality control solutions form a key part of many of the hardware launches and demonstrations at the conference. These were on both the workflow side with AI-powered automatic positioning and auto-protocolling systems that help improve the efficiency of imaging departments and minimise the need for rescans. There was also a prevalence of AI-enabled image acquisition and enhancement offerings, with AI tools significantly reducing the time it takes to conduct scans, effectively making these modalities more efficient and less resource intensive to use, and therefore enabling them to increasingly be used in non-traditional settings, as per the above prediction. Ultimately, these tools have quickly gone from being an innovative new feature to an essential tool, with any vendor neglecting them looking increasingly outgunned. Within the X-ray market, AI enabled camera-based workflows are also driving this initiative.

There were also other illustrations of this prediction. In the summer Butterfly Network and Caption Health partnered to enable the latter’s AI-guidance tool to be used on the former’s handheld ultrasound devices.

The original prediction did suggest that AI developers offering acquisition and enhancement solutions could be acquisition targets for large modality vendors. While this hasn’t come to pass, all other aspects of the prediction did.

Extracting value will be key

Score: 6/10

The importance of value was clear in 2021. In acknowledgment of the tighter financial circumstances that many providers found themselves in as a result of Covid 19, vendors were keen to promote their more affordable performance systems and help solve providers everyday challenges. In addition to promoting these systems, vendors also worked to expand the feature sets of these lower-tiered systems, while also in some cases moving to smart contracts which enable older systems to be regularly updated with the latest features, keeping them current and allowing providers to gain maximum utility of the systems. Within the MRI market, GE Healthcare’s ARTIS EVO enables bore size to be upgraded without the need for reinstallation, increasing longevity of the system.

This also went hand in hand with the increased focus on workflow efficiency throughout the year, as providers were often forced to attend to more patients with fewer resources.

This shift hasn’t been as dramatic as expected, however. Covid relief funding has continued to support providers’ purchasing of higher-end systems. In fact, for some modalities such as ultrasound, it has actually been the higher-end products driving growth in some regions. This has also enabled providers to continue to purchase from vendors they have had long-time relationships with, and therefore not given the opening to cheaper Asian vendors as originally expected.

Value was and will always be important to providers, but their spending has been more robust than originally predicted.

Shared service systems will increase in uptake

Score: 8/10

This prediction was mostly accurate. While there were no single key moments highlighting the development of this trend, a number of releases throughout the year indicated its steady growth.

In ultrasound, where the trend has perhaps been building the longest, several new products were released, including Samsung’s new V8 ultrasound and Esaote’s new MyLab X75 ultrasound, which can both be used as shared service systems. Shared service was also developing in other modalities. Siemens Healthineers announced its first install of its Luminos Lotus Max Fluoroscopy/Radiography system, while Fujifilm’s newly revealed mobile C-arm also offers DR functionality.

The growing prevalence of these shared service systems is, in many cases hindering the uptake of dedicated systems, even if on paper they can claim some advantages. As vendors and providers are increasingly entering into broader purchasing arrangements, and purchasing decisions are being made higher up within a provider, these shared service machines can represent better value, and therefore look to be an increasingly attractive option.

AR will gain traction in surgical rooms

Score: 2/10

While augmented reality remains an interesting technology which harbours significant potential for surgical rooms, for the most part, it hasn’t moved on since this prediction was made a year ago. This is understandable. As hospitals have reopened after the worst of the coronavirus restrictions in 2020 and early 2021, they have had to deal with an unprecedented backlog of postponed elective procedures. This influx of patients has absorbed the attention of providers and left little resource or desire to experiment with incorporating advanced technologies which may not bring tangible benefits immediately.

Although progress has been minimal over 2021, there have been some developments that do suggest interest in the technology will continue to grow over time. Most recently, Philips expanded its ClarifEye augmented reality surgical navigation solution to two new international sites, in Oman and Spain, with successful clinical outcomes.

AR will come to surgical rooms, but that tipping point didn’t come in 2021.

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