Tag Archives: GE Healthcare

Signify Premium Insight: Meeting Expectations – Mindray’s Handheld Hopes

In February, Chinese ultrasound vendor Mindray, entered into a new product segment with the release of its first handheld ultrasound system. The TE Air is a wireless device that, according to the company, will deliver high quality point of care ultrasound imaging for clinicians.

The device will compete with comparable offerings from both established international vendors such as GE HealthCare and Philips, as well as those from younger contenders such as Butterfly Network and Clarius. It also integrates with other products in the company’s range, such as the TEX20, as well as hospital information systems, but will this be enough to set it apart?

Signify Premium Insight: GE Finally Comes to the RPM Party

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Last month’s announcement of a tie-up between GE Healthcare and RPM vendor AMC Health is the latest signal that the healthtech giant has finally come to the RPM party. The partnership also demonstrates how GE is taking a pragmatic approach to growth in an extremely fragmented RPM market. 

The Signify View 

In linking up with AMC Health, GE Healthcare takes another step towards building its out-of-hospital ambulatory capabilities. Amid the feeding frenzy of start-ups vying for RPM market share, the GE-AMC partnership is striking for its relative sobriety – bringing a multinational conglomerate alongside a well-established US RPM vendor with a large customer base (including the huge US Department of Veteran’s Affairs). As well as mutual synergies between the two companies, GE’s shift towards out-of-hospital monitoring also aligns with its decision to spin off its healthcare unit early next year. This will see the creation of a new Patient Care Solutions segment of the healthcare business, which will include monitoring and digital tools. 

Partnership Made In Healthcare Heaven? 

The GE-AMC partnership will take GE hospital data (the company has one of the largest installed bases of devices for clinical monitoring coverage in US hospitals) and remote data from AMC’s RPM platform. This data will then be integrated onto GE’s Edison Healthcare database, giving clinicians a longitudinal view of patients throughout their journey of care from the hospital into the home.  

The partnership is a clear signal of GE’s intent to go with an established vendor rather than a start-up. AMC Health’s customer base has been built over two decades, and the company is an experienced hand in device logistics and patient engagement. Its device and condition-agnostic platform offer a large potential Total Addressable Market (TAM), simpler integration with existing healthcare IT, and the flexibility to move with the market. The company claims its RPM platform will integrate with ‘hundreds’ of FDA-approved vital signs monitoring devices associated with ‘over 100’ chronic and acute conditions. This agility is particularly important given the breakneck pace of advancements in remote monitoring device capabilities and the high incidences of patients suffering with multiple chronic conditions. In our recently-published global RPM Report (see details here), we found that most RPM platform vendors, if not already agnostic, are on that path. AMC is at the forefront of this.   

Picking Up Pace 

GE Healthcare enters an RPM market which is evolving at pace. In our aforementioned Global RPM Report, we noted that revenues from RPM technology and service provider sales (including monitoring service providers) are projected to grow from $1.31B in 2021 to $2.95B in 2026. Greater financial and political commitment from governments, the launch of fee-for-service reimbursement frameworks (especially in the US) and wider structural shifts in healthcare (for example the shift towards value-based care) are driving the market. Covid-19 was a big RPM driver in 2020 and 2021, but clinical backlogs will now spearhead adoption as health systems increasingly look to digital technologies. Globally, an estimated 6.37M of lives will be monitored by 2026, almost three times the current figure.  

Barriers To Entry 

Despite this backdrop, vendors face significant barriers to market entry. ‘Plumbing issues’ for providers (and therefore vendors) include challenges around patient enrolment and how to integrate RPM programmes into existing clinical workflows and healthcare IT; how to provide the extra clinical resources needed to monitor and manage RPM programmes and integrate them into EHRs; how to manage and maintain patient engagement (ensuring that patients comply with the use of their assigned solution to enable consistent reporting, a key consideration for all at-home medical solutions), and device logistics and supply chain management.  

In response to these issues, many RPM platform vendors offer an array of services beyond platform access, particularly in the US reimbursement-driven independent primary care practice market. In this case the vendor charges the clinician on a per-patient-per-month basis for a full turnkey ‘RPM as service’ model. This includes patient identification, onboarding, engagement and monitoring. The grouping of RPM platform access with clinical monitoring services will persist as a defining feature of the market, remaining in demand among buyers of RPM solutions across the provider, payer and employer ecosystem. 

All the above speaks to GE’s decision to team up with AMC rather than a newer, ‘shinier’ vendor. 

Greater Consolidation Inevitable 

Strategic tie-ups, and acquisitions, are the logical response to overcoming market barriers for small RPM vendors that lack scale or portfolio. As we noted in our Global RPM Report, the market is already awash with M&A, VC funding and partnerships, and this will be a recurring feature of the market over the medium term. 

As healthcare systems transition towards providing broader RPM services, a vendor (or group of vendors) that can offer solutions throughout the continuum of care will be well placed to flourish. We predict that acquisitions and partnerships will continue to enable core vendors to remain competitive by offering complete solutions. Furthermore, new relationships will enable new in-house solutions to be developed. 

Drawing Comparisons 

At first glance, the GE-AMC partnership draws interesting comparisons with Philips in the journey beyond the hospital and into ambulatory markets. Last year, the Dutch conglomerate paid $2.8B for BioTelemetry, a major remote diagnostic cardiology and RPM vendor. Press coverage at the time said Philips had paid a premium for BioTelemetry, but this was a far cry from the premium Teladoc paid for Livongo in 2020. Interestingly, Teladoc’s share price (seen as a barometer for the virtual care boom during Covid) peaked on 8 February 2021 – the day before Philips announced the BioTelemetry deal – before falling sharply (though the price has started to recover following Teladoc’s recent quarterly results).  

GE, by contrast, shows no such appetite for acquisitions, even for a company of AMC Health’s credentials. GE has its own restructuring plans (and IPO) to focus on in the near future, and it is unlikely that York Capital, AMC Health’s private equity backers, would in any case have been ready to sell just 18 months after investing in AMC. Furthermore, digital health is an emerging area for GE. The company has made a number of large acquisitions in its much more established medical imaging business, and so a similar approach can also reasonably be expected in digital health down the line. 

For now, it suits GE better to go down the partnership route, and see where things lead. If they work out, there’s nothing to stop York Capital cashing out (as private equity firms do) in the next four to five years. If it does, we’d imagine GE would be an interested party. 

GE’s partnership with and then investment in AliveCor in the diagnostic cardiology market also offers another parallel with GE-AMC (this Insight). AliveCor has developed a clinical grade, ECG hand-held device which can be used by patients outside hospital settings. GE is the leading vendor by a big margin in the traditional, hospital-based Resting and Stress ECG markets but has achieved minimal penetration in the ambulatory market to date. However, in March 2022 it entered into a partnership with AliveCor to integrate readings from AliveCor’s devices into GE’s cardiac monitoring data platform, Muse. Then in August GE led a new funding round into AliveCor.  

Playing It Safe  

By partnering with AMC Health, GE is playing it safe as it navigates its entry points into RPM. Its new partner may lack the headline-grabbing funding rounds of its contemporaries, but AMC Health offers tried and tested credentials to take advantage of the massive growth forecasts for the US and global RPM markets over the coming years. 

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Signify Premium Insight: GE’s Allia Platform: An Intervention in a Lucrative Segment

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GE Healthcare has recently debuted its latest interventional platform, dubbed Allia, which it hopes will allow it to capitalise on the growing demand for minimally invasive procedures.

The new suite centres around a wide-bore C-arm, and, according to GE Healthcare, has been developed in conjunction with surgeons and interventionalists to better support their needs during surgery. This, the vendor says, will improve the accessibility of the system’s user interface, as well as allowing the suite to be customised to individual surgeon’s needs. The Allia Platform is also offered with GE’s AI-based AutoRight interventional imaging chain, and GE’s AI-based parenchymography software solution.

The Signify View

Because of the high-pressure situations in which it is used, and the inseparable link between imaging and treatment, interventional imaging is unique. Despite these peculiarities that set it apart from other kinds of imaging, it does share one almost universal challenge with its imaging kin: the need for greater workflow efficiency. Improving the efficiency of surgeries and reducing operational challenges are among the guiding tenets of GE Healthcare’s Allia platform. Ergonomics is one area where GE Healthcare has worked to improve surgeries, with one of the key developments being a wide-bore C-arm that is neither floor nor ceiling-mounted, a change which is hoped to make interventional rooms more navigable for clinicians.

In a similar vein, GE Healthcare boasts that it has worked to ensure interfaces, functions and displays – the touchpoints that clinicians interact with on a daily basis, are all easily accessible, enabling surgeons to operate more efficiently. There are also more outwardly sophisticated, if more specialised developments, with GE Healthcare looking to leverage AI to assist with liver embolization procedures as well as manage the dose that patients are subjected to.

All of these tools and capabilities should, assuming they perform as well as GE Healthcare expects, be useful to surgeons. Whether that will be enough to convince providers to buy or upgrade their systems to have access to this new clinician-focused platform is another question entirely.

Users vs Buyers

As large medical imaging vendors are increasingly looking to enter into more comprehensive managed service agreements with providers, effectively becoming partners rather than simply suppliers, decisions are being made higher up in the hierarchy of a hospital network. As such, focusing so myopically on the needs of clinicians, rather than the requirements of the C-suite or finance department could be a risk. However, interventional X-ray is unusual in this regard. Its high-risk nature compared to other areas of medical imaging means that the opinions and preferences of the clinicians that will eventually be using the platform will be given more weight than might be the case for other imaging purchases.

Given this clinician focus, it makes sense for GE Healthcare to focus on, and emphasise in its marketing, the benefits that such a system could bring to surgeons, with improved workflow, enhanced clinical outcome, improved usability, and advanced image guidance all aiming to make interventional teams more efficient.

Despite these improvements being roundly appreciated, the Allia platform does represent the top end of GE Healthcare’s interventional imaging range, and as such comes with a price premium. While this may deter some potential customers, it does offer the halo effect, raising GE’s profile in a segment in which its two chief competitors, Philips and Siemens Healthineers, tend to outperform, especially in developed markets. This alone is unlikely to make a provider switch its allegiance and suddenly adopt GE Healthcares interventional imaging suite, but, by addressing one of the gaps in its portfolio, GE Healthcare is increasing the broader appeal of its overall medical imaging offering and therefore standing it in better stead to become the vendor of choice for a provider entering into a holistic imaging deal. By a similar token, offering a system that rivals the best from Siemens Healthineers and Philips also ensures that interventional won’t be a reason it misses out on such deals.

Competing Interest

This is an important factor. GE Healthcare’s Allia platform does not stand in a field of one, with both Philips and Siemens offering products that have comparable functionality, albeit with their own unique focus, however, the timing of GE Healthcare’s launch will also benefit the vendor. During the Covid-19 pandemic countless elective procedures were canceled because of restrictions to hospitals. This has left providers facing an enormous backlog of postponed procedures which they need to clear. Given this pressure on hospitals, any interventional solution which can improve the efficiencies of interventions, reduce bottlenecks in procedures and improve the workflow efficiency of surgical departments will be warmly received.

There are, however, some differences that do set GE Healthcare’s new solution apart from its chief competitors. One such factor is the inclusion of an AI tool it calls Liver Assist, which is a 3D visualisation solution that GE Healthcare says will provide virtual parenchymography and help clinicians simulate injections dynamically and perform liver embolization procedures. Unlike other vendors which have tended to focus on hardware innovation, and supplementing that with software that is applicable across a variety of different use cases, GE has sought to combine its hardware and software capabilities into one product which addresses a growing clinical use case.

Market Pressure

GE’s approach is, more broadly, also appropriate given the wider trends in the medical imaging markets. Unlike many of the segments in which GE plays, there is limited competition in the interventional market. In some of GE’s biggest adjacent markets, competition has increased rapidly. In general radiography, for example, explosive growth in the number of Chinese vendors targeting both the budget segments and players such as United Imaging targeting ever more premium markets, will start to weigh on GE’s results. With new competitors and lower costs eroding market share and margin. In contrast, interventional imaging is a much more sophisticated segment with much higher barriers to entry for potential competitors. What’s more, given the more critical nature of interventional imaging, providers will be less likely to take a chance on a lesser-known vendor if there is an alternative from a more established player with a robust reputation available.

Against this backdrop, focusing on maintaining and building share in the interventional space is an appropriate strategy. Growth in interventional imaging will also be international. Both demographic factors such as aging populations, higher rates of obesity, heart disease, stroke and other conditions rising, along with the increasing availability of medical imaging in developing markets allowing conditions requiring surgical interventions to be diagnosed, the need for interventional imaging platforms will grow in lockstep.

Ultimately, GE Healthcare’s release of its Allia platform will not dramatically change the complexion of the interventional X-ray market. Providers will not rush to replace their existing systems to take advantage of GE Healthcare’s new workflow improvements or its AI capabilities, and it may not, in the short term, necessarily push providers toward a large comprehensive contract with GE Healthcare. However, some clinicians will notice the release, they will visit GE’s booth at RSNA and assess the consideration that they, and their needs have been given in the update, and, perhaps will start to notice some shortcomings in their own systems. Then, when the time comes, these clinicians tasked with performing some of the most direct tasks in medicine could advocate for a GE system in future. Such patterns may not allow GE Healthcare to overthrow Philips and Siemens, and over time those vendors will also release new systems that will once again swing the balance. But, by focusing both hardware and software innovation on the platform’s users, GE Healthcare may well have boosted its chances in a difficult, yet rewarding, segment.

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Signify Premium Insight: GE Healthcare Looks to Solve Problems at Home

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GE Healthcare has recently entered into an agreement to invest up to $50m in ultrasound start-up Pulsenmore. The Israeli vendor, which offers a docking station allowing expectant mothers to use their own smartphone to conduct ultrasound examinations on themselves at home under the guidance and supervision of a healthcare professional, aims to allow women to proactively manage their pregnancy, and improve productivity by having more scans done away from the hospital.

GE’s investment is aimed at improving Pulsenmore’s global reach, as well as helping propel commercial expansion and securing regulatory clearance. In addition to the funding GE is providing, the international modality vendor will also partner with Pulsenmore to distribute its products in Europe and across the world, as well as collaborating on new solutions that also cater to the nascent home market.

The Signify View

Offering patients the ability to conduct medical imaging in the home has numerous upsides, from straightforward benefits such as better provision in remote areas, patients not having to travel, the reduction in no-shows for appointments, to advantages that are more substantive for providers such as reducing in-hospital appointments, and helping to reduce the number of false alarm visits to the ER during pregnancy, saving the hospital money. These opportunities have been understood for some time, but so too have the problems barring the technology’s uptake.

Among them, for instance, is the considerable faith required to be placed in the ability of inexperienced home users to properly carry out their own scans. Ultrasound is a difficult modality to use and an improperly conducted scan could result in images that are not able to be used for diagnostic purposes, or worse, missed or incorrect interpretations of medical images. These devices must also be able to provide information that is useful to a patient. Simple instruction depending on output rather than complex, subjective interpretation. A further challenge is convincing customers to pay for imaging tools. While some medical devices such as blood pressure monitors are cheap enough for the home market, medical imaging is an altogether more costly proposition, the cost of which is unlikely to be commonly accepted.

Pulsenmore has avoided these, and other challenges, that stymie the adoption of medical imaging at home through its usage model. Among the vendor’s customers is Clalit Health Services, the largest healthcare organisation in Israel. Clalit issues the devices to its patients, and guides their usage, making sure they are used correctly and ensuring that the devices are only used at prearranged times. Through Pulsenmore’s teleultrasound platform, interpretation will also be completed by experienced clinicians working remotely.

Good for Hospitals, Good for Patients

It isn’t just patients that could benefit from such an approach. One of the broader trends in medical imaging is the growing momentum towards value-based care, especially in single-payer markets and payer-led managed care health systems. Pulsenmore’s approach capitalises on this trend, with providers’ use of the devices hoped to enable patients to be examined at home; an option that can be far more cost-effective than bringing them into hospital for every single scan.

The cost savings for providers can be significant. As well as reducing the necessity for patients to repeatedly come into hospital for scans, by equipping expectant mothers with devices that facilitate more regular monitoring of their babies, Pulsenmore could also help reduce the number of emergency consultations, emergency imaging scans and other expensive procedures, by assessing anomalies or concerns more swiftly, at home.

Neonatal care is an attractive market for home-focused healthcare products, but it is far from the only market that can be targeted. A range of chronic health conditions such as those affecting the heart or the lungs, or even conditions relating to treatment such as dialysis could see benefits from better at-home imaging. These are all markets which, if Pulsenmore is successful, could become future targets. Another market in which Pulsenmore has already started to make headway is for follicle counting in IVF and fertility preservation processes. In January of this year it signed an $11m deal with Clalit for its new follicular tracking ultrasound device, the Pulsenmore FC. As with its pregnancy-focused ES device, allowing patients to conduct follicle counting exams at home will improve the patient experience, while also benefiting providers by reducing the number of in-person visits that need to be made and therefore saving hospitals and clinics money.

Free Reign

Such success, in the short-term at least, looks plausible, particularly given that, as yet, there are few, if any, direct competitors to Pulsenmore. Some of the specialist handheld ultrasound vendors have referenced the home market in investor presentations and the like, but these systems are not comparable. Aside from them costing thousands of dollars rather than the hundreds of dollars pricepoint that Pulsenmore hits, the pregnancy ultrasound device also has advantages in terms of scalability.

For the sales teams at large modality vendors, $3,000 scanners are not the priority when they can be focusing on $150,000+ ultrasound systems. Similarly, despite their best efforts, for handheld vendors sales can be resource intensive and difficult to grow. Pulsenmore sidesteps these issues by focusing on large deals, for large numbers of devices with providers. The agreements with Clalit, announced in August 2020 and January 2022 were, for example, worth $6m and $11m respectively. Deals of this size means that, assuming the devices are well received, business is likely to continue to be generated into the future.

There are opportunities for other vendors to enter the home market, with wearables noted as a likely next step by some vendors. Such tools could be particularly useful where more regular monitoring is required, such as for heart care, for example. These devices, like Pulsenmore’s scanner, could be manufactured cheaply enough to be viable for home use, be attractive to providers who have large numbers of patients suffering from heart conditions, and by offering constant or very frequent monitoring, help reduce the numbers of costly procedures required thanks to earlier detection.

A Pragmatic Approach

These possibilities illustrate some of the reasons why GE Healthcare has sought to invest, although there are also more pragmatic reasons. GE will be the device’s exclusive distributor in some territories and for some customers, enabling the vendor to sell as many as 50,000 units annually. The deal will also complement GE’s strength in ultrasound, with the international modality vendor occupying the top spot in terms of global market share. While the investment will initially benefit GE’s women’s health ultrasound business, over time it could complement its offerings in almost every ultrasound segment and represent a first foray, as the vendor expands into the potentially lucrative home market.

Beyond market entry, the collaboration could also see the vendors sharing capability. Pulsenmore’s devices, while already affordable, may benefit from the global supply chain expertise, the manufacturing capabilities and the distribution abilities of GE to further reduce cost and help the vendor scale production and sales. GE meanwhile could be eyeing Pulsenmore’s teleradiology platform. This is an area where GE is currently lacking compared to its chief competitor, so folding in some capability from Pulsenmore could quickly bolster the vendor’s broader offering.

GE’s investment is staggered, with $21m to be invested up front, another $21m when the vendor receives FDA approval and a further $8m if the Israeli vendor holds another equity offering. These caveats, however, should not diminish from the move. There have long been plans to increasingly bring healthcare into the home, but as yet traction has been limited. GE has taken a sensible approach. Pulsenmore’s strategy is well-considered and avoids some of the pitfalls of entering the market, which for GE means it can carefully, but confidently back the vendor. In short, it is a move that suggests the market might finally be ready for a large vendor’s embrace.

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Signify Premium Insight: Vendor Financials Roundup – The Health of the Imaging Sector Q1 2022

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One glance at a newspaper leaves no doubt about the volatility of the world’s economic health. Every day, troubling stories adorn the front pages: shocking rates of inflation, dramatic retreats for some blue-chip stocks, soaring energy costs, the ongoing defence of Ukraine from Russian invasion, continuing coronavirus restrictions in China and extended disruption to chip production and supply chains amongst others. Reading these headlines, it would be natural to assume that medical imaging vendors will be feeling bearish, shouldering the burden of a hard start to the year and preparing to dig their heels in for the long, fallow months ahead.

This assumption, would however, be incorrect. While vendors have been unable to completely avoid these global headwinds, they have, as illustrated in their first quarter financials, largely been able to mitigate some of these challenges.

The Signify View

This is true, of, for example, the supply chain headaches that have been wreaked on the world primarily by the turbulence of the coronavirus pandemic and countries’ responses to it. Although these supply chain challenges have been noted by almost every vendor in their quarterly results, they have not significantly impacted revenues, with most vendors still showing year on year growth. Siemens Healthineers, for example, noted a 150 basis point headwind compared to a year earlier, up from around 100 bps in the previous quarter. However, in the vendor’s Imaging Segment, this translated to an adjusted EBIT margin of 20.2%, down from 21.1% a year earlier, but still a strong figure, particularly given the 10.7% increase in revenue.

This pattern was echoed elsewhere. GE for example saw comparative growth in its Healthcare business of 2%, although profit margin fell 260 bps to 13.6%. Philips’ also saw its EBITDA margin in its Diagnosis & Treatment segment fall, to 9.5% from 12.3% a year earlier, although the Dutch vendor didn’t enjoy the bounce in revenues, which fell 2% year on year.

How vendors have been able to cope with these difficulties in logistics and procurement has been affected by several factors. Some of these are reliant on the vendor’s management of the difficulties such as identifying new suppliers, modifying stock levels and even redesigning or reconfiguring hardware to avoid overreliance on particularly in-demand components and materials. These opportunities for leaner processes will not be able to stave off shortages indefinitely and will require time and effort to implement, but they will help mitigate difficulties in the near term, while, in many cases, also leaving businesses more efficient for the future.

Mixed Risks

Vendors have less control over other factors. One of the key differentiators are the product mixes that imaging companies entered into this period with. Vendors who are more reliant on high volume, high-profit modalities such as ultrasound and clinical care devices will have been more drastically impacted than those skewing towards lower volume, higher value modalities. This is one of the reasons for the weaker performance of Philips compared to some of its peers.

These troubles have been particularly pronounced to vendors with greater exposure to certain markets. Canon, Konica Minolta and Shimadzu, for instance, are most reliant on their home market of Japan. Canon’s Medical segment saw total sales decrease by 5%, while income before taxes plunged 45.2%. This was largely down to supplementary government spending a year earlier, diminishing provider appetite in 2022, a factor that will have been keenly felt by all Japan-centric vendors.

Of course, pressure in foreign markets will have also hit other vendors’ revenues. Group revenues for Siemens Healthineers in the quarter, for example, fell 10% on a comparable basis in China as the country continued to face strict Covid 19 regulations. It’s a similar story for GE, which also recognised the challenges the region presents in its own announcements. However, unlike the Japanese vendors, Siemens Healthineers, GE Healthcare, and others with exposure to a greater range of international markets were better able to withstand these regional challenges. This highlights a key objective for Canon and Fujifilm; namely, reducing their reliance on a single market. The vendors are already working towards such ambitions, and it is no way an easy objective, but these results highlight its importance. For example, Canon has signalled that the USA is a key growth market for the company, and it is currently overhauling its sales organisation and expanding its sales force.

Inflated Concerns

Another of the key economic concerns for many industries is the spiralling inflation that, after many years of languishing at or near record lows, has leapt dramatically. As with any broad economic change there are countless subtle and often unknowable impacts. However, in this case there is good reason to think that the increased inflation could have a positive impact for many of the large medical imaging vendors.

One of the key trends in medical imaging has been improving the efficiency of the acquisition and analysis of diagnostic images. Some products and technologies have enjoyed success on the back of this trend, with the increased requirement for some types of procedures caused by the Covid 19 pandemic, and the enormous backlog of patients it created particularly driving adoption. The dramatic rise in inflation, and in particular the increase in wages demanded by healthcare professionals means that productivity is once again in the spotlight. This emphasis is expected to drive growth across vendors’ product ranges as providers seek to add capacity. This growth could be particularly noticeable for top-tier systems, which providers could well be more inclined to consider as their features, which help increase productivity, could offset their higher price tag. Such inflationary challenges could, therefore, herald a modest, but noticeable bump for modality vendors, and in particular, those whose portfolios skew towards particularly time-consuming exam times such as MR and CT.

This effect will be most noticeable in acute care in private markets, notably the US, where wage inflation is more significant. In single-payer markets, where wage increases are likely to be more constrained by government policy, the demand for new systems and tools to improve efficiency and automation will be more muted.

Favouring the Familiar

These broader economic and geopolitical challenges bring other reasons for cautious optimism among the largest medical imaging vendors. In times of geopolitical stability and bullish economic outlooks, there is a greater appetite for risk among many cohorts including financial investors and healthcare providers. This readily available capital helps young disruptive companies to grow, while the boldness of providers means that they are more likely to invest in the solutions touted by these young disruptors, potentially at the expense of other longer established vendors. In times such as the present, where economic uncertainty haunts procurement discussions, providers are unlikely to turn their back on a trusted supplier in favour of one that is unproven. This preference for the familiar will provide solace to large imaging vendors, which could have otherwise been threatened in key markets by disruptive start-ups, or quickly growing foreign players such as United Imaging.

Vendors can capitalise on providers’ preference for the familiar even further and look to bolster their service deals. Providers will be increasingly open to more integrated managed service partnerships, with such deals offering them predictability from a procurement and cost perspective, but also the ability to derive more efficiencies through the fleet management and operational workflow advantages that such partnerships can unlock. In these tougher economic times, when many providers are inundated with procedures postponed by Covid, the importance of minimising downtime, and extracting maximum value from equipment and personnel is increased, all of which can be gained through managed service partnerships.

Budgeting for Service

Vendors can also use the agreements to increasingly embed themselves at providers. By offering more comprehensive packages, of which service plays an ever-larger part, vendors can look to benefit from a hospital’s broader operational budget, a fund far greater than the radiology budgets which they would have historically looked to target.

Vendors can also look to strengthen their ties to providers and effectively lock them in for longer-term deals. As well as offering efficiency and operational improvements, large vendors will also be able to leverage their size to offer flexible payment plans. Offering early upgrades or effectively financing equipment purchases for a hospital, as part of longer-term deals.

This opportunistic thinking has been seized upon by many vendors, several of which have raised their guidance for the year, in part on the back of continuing strong order intake, which, for many vendors, continues to provide support and reassurance even given some of the immediate challenges they face.

More broadly too, the largest medical imaging vendors should feel reassured by the latest quarterly figures even as the world economy looks to be stalling. They will no doubt face some challenges, and they must continue to overcome some obstacles, but that is the nature of business. In the longer term, this volatility is an opportunity which they are best placed to benefit from. They, unlike many of their smaller peers, have the scale, diversity and cash reserves to persevere and gain ground while others falter. This may mean sacrifices in the near term, accepting lower margins or sacrificing niche opportunities in the name of focus, but, if they can hold their nerve and deliver on their promises, they could position themselves perfectly to capitalise when the winds change.

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