Healthcare providers are adopting newer, more innovative integrated healthcare IT solutions to increase operational efficiencies and better address continually changing reimbursement models globally. In the meantime, the facilities are shifting procurement patterns to better adapt to an ongoing trend towards an increasingly multi-disciplinary and holistic approach to clinical care provision, which is propelling adoption of integrated IT offerings and spurring demand in enterprise solutions within medical imaging. This means that revenues from traditional departmental Picture Archiving Communication Systems (PACS) and Information Systems (IS) products in 2016 were largely from the services segment rather than new installations. Greenfield project growth continues to drive gains in immature markets within Africa and Asia Pacific. In developed sub-regions such as North America and Western Europe, new installations and implementations of departmental solutions can still be found in small facilities that are privately owned, and highly specialized facilities, where sought-after clinicians are driving revenue growth and thereby gaining more leverage in purchasing decisions.
Global radiology and cardiology IT market revenues are estimated to have totaled $3.3 billion in 2016. The market was highly concentrated, with five companies: GE Healthcare, AGFA Healthcare, Philips, McKesson (new Change Healthcare), and Fujifilm comprising approximately 57% of these revenues. Radiology IT revenues accounted for an estimated 86% of the total global revenues, with cardiology IT revenues accounting for the remaining 14%. Going forward, global radiology and cardiology IT revenues are projected to grow at a compound annual growth rate (CAGR) of 4% from 2016 to 2021.
Radiology PACS (RPACS) contributed to 78% of the total 2016 radiology IT revenues of $2.8 billion, an increase from 2015; conversely, Radiology IS (RIS) continued to lose share in 2016, largely due to the transition of the revenues towards becoming more maintenance-based. Going forward, the highest growth by major region (which include the Americas; Europe, the Middle East, and Africa; and Asia Pacific) in radiology IT through 2021 is projected to occur in Asia Pacific, with RPACS leading the growth. For cardiology IT, CVIS is estimated to have accounted for 55%, with CV-PACS estimated to have accounted for 45% of $446 million in total 2016 cardiology IT revenues. Going forward, the highest growth by major region for cardiology IT through 2021 is predicted to also be in Asia Pacific, largely driven by CV-PACS as well as a strong Chinese market.
Competitive environment in North America and Western Europe
The saturation in mature markets within North America and Western Europe has driven vendors to focus on product and services differentiation. Additionally, radiology and cardiology IT system bundles along with corollary products such as workflow tools, business analytics platforms as well as custom consulting services are increasingly being introduced to remain competitive. IHS Markit estimates that the North American and Western European markets accounted for approximately 44% and 20%, respectively, of global radiology and cardiology IT revenues in 2016. In emerging markets such as Colombia, Peru, Algeria, Nigeria, Vietnam, and the Philippines, a lack of robust IT infrastructure and limited bandwidth will continue to inhibit radiology and cardiology IT market growth in the near term.
IHS Markit Insight
On a macro level, key market opportunities include an increasing preference of end users for managed services; rising demand for scalable, lightweight solutions; lengthier and more comprehensive contracts; and integrated solutions that are interoperable with business analytics platforms. Conversely, IHS Markit predicts potential barriers to be the growth of vendor-neutral archives (VNAs), emergence of electronic health records companies in the medical imaging space, lack of infrastructure in some regions to support adoption of new healthcare IT solutions, and price erosion due to increased, intense competition from local vendors against established multi-national companies in emerging markets.
In the short term, IHS Markit predicts that the level of a solution’s interoperability will have the most influence on procurement decisions as providers look to replace siloed solutions. Additionally, IHS Markit predicts that mergers and acquisitions, such as Philips’ acquisition of Tomtec and Konica Minolta’s acquisition of Viztek, will become increasingly common as major vendors look to expand their reach into new regions. Furthermore, partnerships between imaging vendors and EHR companies will be increasingly common, and incorporation of advanced interoperability standards that allows for greater communication with EHRs such as the Fast Healthcare Interoperability Resources (FHIR) will be widely adopted.
In the 2017 edition of the IHS Markit report Radiology and Cardiology IT – World, IHS Markit offers in-depth analysis of the radiology and cardiology IT market’s strengths, weaknesses, opportunities, and potential barriers in the six largest sub-regional markets: the United States, the United Kingdom, Germany, France, China, and Japan. The report evaluates the aforementioned trends in greater detail and provides forecasts through 2021 in revenue terms for the global market as well as those of the major regions and 49 select sub-regions. This report is one of three reports by IHS Markit on healthcare IT; other report topics include Medical Enterprise Data Storage (VNA and Image Exchange) and Electronic Health Records.