February 1, 2010
The market for X-ray equipment and supplies is very much a mature one. According to a report by BCC Research, the entire U.S. market for medical imaging equipment totaled $7.8 billion in 2007, with a projected growth to $11.6 billion in 2012. Within this medical imaging market, radiography and mammography were expected to retain their hold on fourth place, behind CT, MRI and ultrasound, but ahead of PET, as imaging modalities. The U.S. market for X-ray itself, including general analog, computed radiography (CR), direct radiography (DR), cardiovascular, fluoroscopy and mammography, was sized at $2.6 billion in 2008, according to data from iData Research Inc.
Additionally, Global Industry Analysts Inc. predicts the overall market for X-ray films, chemicals and processors to reach $5.9 billion this year. The Unites States is the largest market for these items and will account for approximately $1.3 billion by 2010. Movement from traditional film to digital is constrained by cost, a factor that will likely keep traditional film in the mix for some time to come.
The market is driven by several factors, and many of the technologies included under the X-ray umbrella are expected to keep the market from growing rapidly or even contribute to a decline.
As with most other medical device categories, the X-ray market is affected by trends in reimbursements as well as the effects of the economic recession. For example, an increasing proportion of the workforce is either part-time or independent, situations that tend to result in a lack of health insurance.
According to data from The Iowa Policy Project, in 2005 some 26 percent of the U.S. workforce had jobs that were considered “non-standard”; of these, approximately 61 percent said they had no employer-provided health insurance. Bear in mind: This was pre-recession. With the number of involuntary part-time workers now standing at 9.2 million, it stands to reason that the number of Americans without employer-provided health insurance is likely increasing as well. These individuals may be going without insurance or may be opting for high-deductible individual plans; either way, they may be making some decisions about participation in medical imaging from a financial-impact perspective.
According to Ravindra Sharma, senior analyst with Toronto-based Millennium Research Group, there are several limiting factors that impact the market for X-ray equipment and supplies. First is the economic recession and resulting credit crunch for healthcare facilities. “Administrators need to justify every dollar they spend,” says Sharma. Second, a growth in the use of CT angiography has negatively impacted the use of cardiovascular X-ray. As a consequence of limiting factors, the market for refurbished equipment has grown; Sharma notes that it has increased from a historic level of 7 percent up to 15 percent during the recession.
Sharma also identifies several drivers that are spurring growth in the X-ray market. Primary among these is the increase in interest in digital modalities, particularly DR. He notes that these technologies increase patient throughput while allowing more control over dosing levels, resulting in increased quality. This makes digital modalities more efficient overall.
Additionally, Sharma explains that the aging of the baby boomer generation brings with it an overall increase in demand for diagnostic imaging. This is an important factor affecting all healthcare markets, although the duration of the boom will be limited by the lifespans of the boomers, who will be followed by the much-smaller Generation X.
Overall, the diagnostic imaging market is a growing one, a factor that may benefit X-ray. Data from the research group Global Markets Direct point to increasing numbers of new hospital construction driving growth in the diagnostic imaging market as a whole; this includes more than 3,000 projects, such as hospitals and outpatient clinics that are in progress in the U.S.
According to information from iData Research, the digital imaging market is experiencing the most growth, with digital technology being the biggest driving force. Specifically, digital mammography is the biggest mover in the category.
Roberto Aranibar is a research analyst in Frost & Sullivan’s medical imaging team. He has found the transition to DR to be partly driven by lowering costs of picture archiving and communications systems (PACS), which make it “cheaper to have some kind of archiving.” Combined with the higher operational costs of using film, DR is consistently gaining ground, and with it bringing faster and more efficient workflow.
In the past, DR had also been held back by previous cost differentials compared to CR; the cassette-based CR systems were cheaper on the front end than DR, meaning that conversion from analog to digital technology was more expensive when moving to a DR system. However, Aranibar notes that “more vendors are coming up with retrofit options that can be used with analog systems.” These retrofit options bring conversion within reach of more analog users.
Aranibar also predicts that the recovery of the U.S. economy should bring with it a greater number of financing options to address the lack of financing previously available for those who want to convert to digital. He notes that over time, with the operational cost savings accruing from the switch from analog, facilities “still will come out ahead.”
One company that is staying on the forefront of this emerging technology, for instance, is EDGE Medical Devices. In October 2009, EDGE advanced the industry by commercially releasing their flat-panel DR detector and universal retrofit kit. Not only does this innovation represent a significant technological advancement, it also enables facilities to streamline their installation process. According to EDGE Chairman of the Board Uri Geiger, his company is “well-positioned to bring DR to hospitals, clinics and outpatient centers that have previously been unable to afford to upgrade.”
Although X-ray is a mature technology, developments are still being made in the market. In early 2008, Frost & Sullivan recognized Tustin, Calif.-based Toshiba America Medical Systems with their 2007 North American award for Technology Innovation award in response to the development of the 5-axis Infinix CFi-BP system. This cardiovascular X-ray system can be maneuvered in all angles and includes a flat-panel detector for clear visualization of the smallest blood vessels. It was designed for a pediatric population, but is used for adults as well.
Such technological innovations continue to drive the X-ray market, even as it settles into maturity. Developments in high-end cardiovascular systems, systems targeted to pediatric populations, and the like are all driving a market that is likely to be important for some time to come.
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