Author Archives: Charlotte Davis

The Signify View: Agfa To Separate Healthcare IT Business?

The Signify View: Agfa To Separate Healthcare IT Business?

Written by Steve Holloway

  • Agfa-Gevaert Board of Directors requests a study on the reorganisation of its healthcare business unit, with the healthcare IT business as a standalone legal entity
  • Announcement comes 8 months after failed approach from CompuGroup Medical to acquire Agfa-Gevaert
  • First half results for Agfa Healthcare show a dip in revenues and EBITDA, caused by a slow-down in sales of traditional film hardcopy, in addition to a temporary slow-down in Imaging IT
  • This new announcement comes in the wake of relatively weak healthcare business performance, with revenues for the total healthcare group down 10% since 2012

The Signify View

No Hiding From The Top Line

The announcement that Agfa will investigate options to separate its healthcare IT business from the rest of the healthcare unit is not surprising. It’s two core sectors, Imaging IT and Healthcare IT Solutions (mostly Electronic Medical Records (EMR) and Hospital Information Systems (HIS)) have been steadily growing in importance for Agfa, against a backdrop of steadily declining film and printer sales. Digital Radiography (DR), in which Agfa remains one of the leading vendors, continues to be a major revenue stream. That said, the business is under greater pressure in recent years due to stiff competition from low-cost system and flat panel detector panel manufacturers forcing prices to plummet.

The result? A slow erosion of healthcare business revenues, declining 10% over the last 5 years. Over this time, healthcare IT revenues have remained resilient and today they account for a greater proportion of the healthcare unit (44% for 2016 versus 39% in 2012). Moreover, the last three years has seen a steady increase in demand for Agfa health IT products, in part due to a successful launch of enterprise imaging platform (Agfa Enterprise Imaging), growth in the EMR and hospital IT segment (ORBIS, Hexagon HIS, Hexalis LIS, HYDMedia ECM) and the establishment of a new product line (Integrated Care Suite).

Consequently, the Agfa-Gevaert board are looking to capitalise on Agfa’s strength in diagnostic and clinical IT software by unshackling it from the rest of the group. By doing so, they hope the newly formed Agfa HealthCare IT entity can bring new growth impetus to an otherwise stalling corporation. But it won’t be easy.

Stuck Between A Rock And A Hard Place

A traditional stalwart of the X-ray industry, AGFA has transitioned its portfolio into the digital era with reasonable success. It has used its X-ray equipment business as a stepping stone to build a sizeable IT software unit, reaching third position globally in terms of radiology IT software revenue. It has also established its EMR/HIS business, with solid foundational customers on its doorstep in Western Europe.

While it has been undergoing this transition, a lot has changed in the market. Digitalisation has rapidly spread across healthcare, shifting decision making at providers away from Agfa’s base of strength in radiology. The lucrative US market has also been forced by legislation into massive provider consolidation, creating a market with fewer, larger customers. As provider scale has grown, so too has focus on procurement value. Demand for vendors to fulfil tenders including multi-modality imaging and multi-application software IT platforms has also proliferated, not to mention new means of delivering these solutions (managed services, risk-sharing contracting).

For Agfa, this poses a problem. As a single-modality specialist, lacking a portfolio of MRI, CT, interventional X-ray and ultrasound automatically limits its ability to compete with vendors such as GE Healthcare, Philips Healthcare, Siemens Healthineers and Toshiba Medical in these deals. Moreover, its core imaging IT business has also been required to expand its’ capability, from departmental radiology to imaging across multiple departments (cardiology, nuclear medicine, dermatology, etc.). At the same time as this expansion, it has had to compete with a growing cohort of competitors, with vendors in the enterprise EMR, Vendor Neutral Archives (VNA), Enterprise Content Management (ECM) and analytics sectors all vying for the same deals.

Worse still, diagnostic imaging and clinical analytics is fast becoming and arms race, with the biggest vendors investing hundreds of millions to establish viable artificial intelligence platforms for diagnosis as well as establishing agnostic clinical enterprise IT platforms (ACE platforms). This is only going to intensify in the coming years as clinical IT usage in healthcare spreads across global markets.

The Agfa healthcare business is therefore fighting on multiple fronts, without the financial firepower or breadth of product portfolio to compete on a level playing field with the biggest healthtech vendors.

Not Alone, But Well Overdue

Agfa is not alone in its current predicament. Other mid-tier healthtech vendors are in the same boat. A number have made proactive moves to either expand their portfolio or re-organise to meet the demands of the new market era:

  • Canon: previously an X-ray specialist, acquired Toshiba Medical Systems business, adding a full modality hardware portfolio and advanced visualisation capability (Vital Images)
  • Fujifilm Medical: the market leader in general radiography X-ray and radiology IT has expanded its portfolio with the acquisition of ultrasound (Sonosite) and VNA (TeraMedica)
  • Carestream Health: launched self-developed ultrasound portfolio to complement general radiography X-ray, dental X-ray and imaging IT product lines.
  • Siemens Healthineers: while it already has a full imaging and imaging IT portfolio, it is slowly extracting itself from Siemens Corporate for a much-anticipated IPO, expected in 1H 2018

Given Agfa’s current position and market environment, the decision to separate the healthcare IT business therefore has some merit.

  1. It will allow the Agfa health IT business greater freedom to partner with other vendors. This will have significant impact both in terms of its ability to partner on specific deals (e.g. less conflict of interest with Digital Radiography business), but also added functionality for its diagnostic and clinical IT products (artificial intelligence, analytics, operational IT software)
  2. It allows greater focus on the strategic direction for healthcare IT. Expressly, whether to push to build its own platform that can act as a central “ecosystem” for providers clinical IT needs, or focus on becoming a “best of breed” specialist in diagnostic imaging IT.
  3. It opens the possibility for a future sale. As a separate entity, the potential for a lucrative sale will no doubt also be in the minds of the management and shareholders. With a large installed base of imaging IT customers globally, a solid foothold in Western European EMR and lengthy experience in the complex world of diagnostic imaging, the timing for a sale could be ripe before Agfa’s market share is eroded by stiffening competition.

While the separation is by no means a done deal, we believe the above factors will be enough to sway the decision to separate the healthcare IT business. If anything, given the lack of revenue growth from the healthcare IT business over the last five years (and AGFA Healthcare), this decision is already too late.

China – The Market Maker for AI in Medical Imaging?

China – The Market Maker for AI in Medical Imaging?

Written by Simon Harris

To date, most of the academic research and commercial activity in the field of machine learning for medical imaging has been driven by the US. Several of the leading US academic hospitals have established teams to develop and commercialise artificial intelligence solutions for the detection and diagnosis of diseases. In the commercial world, around half of the nearly $200 million of venture capital invested in medical imaging AI start-ups has gone to US companies, with most of the remainder going to companies in Europe and Israel (click for our analysis of funding for medical imaging AI start-ups). Not to mention the huge investments in healthcare AI by leading healthcare technology vendors, including IBM and GE Healthcare. Moreover, the US was the early adopter of computer-aided detection (CADe) solutions, most notably for use in breast cancer screening, and today accounts for around two-thirds of the global CADe market. Whilst China is late to the party, it is poised to emerge as a leading global player, both in terms of technology development and market demand.

China’s Internet Giants Enter Medical AI

In March of this year, Alibaba Cloud, the public cloud division of Alibaba Group, announced ET Medical Brain, a suite of deep learning solutions for medical imaging, drug development and hospital management. The suite also includes a virtual medical assistant for use by patients. In one project, Alibaba Cloud partnered with a hospital in Zhejiang province to automatically identify thyroid cancer from ultrasound scans. According to Alibaba Cloud, about 20,000 images were used to train its system, which was 85% accurate in trial tests. The company is also developing a solution to detect lung cancer in chest CT scans.

Alibaba’s healthcare unit, Ali Health, which is primarily involved with the distribution of pharmaceutical and health products in China, has also recently revealed an AI solution for medical imaging, called Doctor You. The initial applications for Doctor You are the early detection of lung cancer and diabetes. Ali Health entered the medical imaging market in March 2016 through a $35 million investment to acquire a 25% stake in Wan Li Yun Medical Information Technology (majority owned by Wandong Medical Equipment), which markets a cloud-based medical imaging platform called Wlycloud. Ali Health claims over 1,600 hospitals are using the Wlycloud platform, which gives the company an effective route to market for its Doctor You solution.

In August of this year, Tencent, one of the world’s largest internet providers and gaming companies, announced it had developed a deep learning solution for the detection of oesophageal cancer. The company also plans to develop solutions for the detection of lung cancer, breast cancer, diabetic retinopathy and other diseases. However, Tencent has stated that its medical AI solutions are not yet ready for commercialisation.

Chinese Medical Imaging AI Start-ups

Worldwide there are over 50 start-up companies developing machine learning solutions for medical imaging, most of which are based in the US, Europe and Israel. In 2016, the first Chinese start-ups entered the market – DeepCare and Infervision. DeepCare has raised nearly $1 million in angel funding and is developing deep learning solutions for medical device OEMs. Infervision raised $7.2 million in a Series A funding round led by Sequoia Capital and has developed solutions to detect lung cancer on CT scans and cardiothoracic lesions on x-ray scans. The company claims to have established partnerships with around 20 tier 3 hospitals in China, including Peking Union Medical College Hospital and Shanghai Changzheng Hospital.

Chinese Research Initiatives

In July of this year, the National Clinical Research Center for Cancer (NCRCC) announced it had signed a deal with the Institute of Computing Technology, part of the Chinese Academy of Sciences (CAS), to develop artificial intelligence solutions for medical imaging. The initial focus is to develop solutions to read ultrasound breast scans and mammograms. The aim of the agreement is to improve diagnosis accuracy and encourage breast cancer screening in regions of high prevalence and in rural areas, where experienced medical professionals are in short supply.

Chinese Market Demand

The world’s most populous nation suffers from a shortage of skilled medical professionals such as radiologists and oncologists, particularly in rural areas. According to World Health Organization (WHO) there are only 1.5 doctors for every 1,000 people in China, notably lower than many other countries (e.g. 2.5 per 1,000 in the US). Moreover, cancer rates in China are on the increase and last year more than four million Chinese people were diagnosed with the disease. Cancer has been the leading cause of death in China since 2010, with lung cancer causing the most deaths. Hardly surprising given the high prevalence of smoking in China – more than half of Chinese men are smokers. The incidence of breast cancer in China has more than doubled over the last 30 years and continues to rise. With China’s population ageing at a faster rate than the global average, the burden of cancer on China’s healthcare system is expected to grow in the coming years.

The China National Lung Cancer Screening Guideline recommends annual lung cancer screening with LDCT for high risk individuals aged 50–74 years who have at least a 20 pack a year smoking history and who currently smoke or have quit within the past 5 years. However, the cost of population-based screening is prohibitive, not to mention the shortage of healthcare professionals. This is where AI has a part to play. In recent years the Chinese government has initiated several large-scale lung cancer screening programs. As far as Signify Research is aware, computer-aided detection was not used, but as screening programs are scaled-up to cover larger proportions of the Chinese population, the case to use the technology will grow stronger. Although details of future lung cancer screening initiatives have not been announced, there will likely be more large-scale, regional and multi-site screening programs in the coming years.

Between 2008 and 2011, over 1.2 million women were enrolled in the Chinese National Breast Cancer Screening Program (CNBCSP). Ultrasound was used for the primary imaging exam and all women with a suspicious lesion found on the ultrasound study underwent an additional mammography exam. Ultrasound is preferred over mammography, particularly in rural areas, as it is more cost-effective and clinically more effective for women with dense breasts. Again, computer-aided detection has not been routinely used to date, but this is expected to change in the coming years, particularly as 3D automated breast imaging becomes more commonly used.

The use of AI in diagnostic imaging will not be limited to cancer screening initiatives. For example, in April of this year, Enlitic announced that is had executed a Memorandum of Understanding with Beijing Hao Yun Dao Information and Technology Co., Ltd (“Paiyipai”) to provide Enlitic’s deep learning solution to Paiyipai for diagnostic imaging in health check centres across China. Approximately 300 million Chinese people use health check services. Most patients receive annual chest x-rays and basic check-up services, with options to include MRIs, CT studies and genetic testing.

No Baggage

Another factor that will accelerate the uptake of medical imaging AI solutions in China is customer acceptance. In the US, many radiologists see AI as a threat or are sceptical of the capabilities of AI solutions based on their experiences with early generation CADe solutions, which suffered from low sensitivity and/or specificity levels. Vendors are likely to encounter less resistance to AI solutions from Chinese healthcare professionals, who have skipped the early generations of machine learning technology and jump directly to the latest deep learning solutions.

The Government is the Gatekeeper

The pace of healthcare reform and the modernisation of the Chinese healthcare system, coupled with increasing domestic research and development activity, would suggest that China will be an early adopter of AI in medical imaging. With over 2,200 tier 3 hospitals (general hospitals in large cities with over 500 beds) and nearly 8,000 tier 2 hospitals (medium-size city, county or district, with up to 500 beds), the market opportunity for medical imaging AI in China is vast. However, ultimately government policy will dictate the market.

Related Report from Signify Research

“Machine Learning in Medical Imaging – 2017 Edition” provides a data-centric and global outlook on the current and projected uptake of machine learning in medical imaging. The report blends primary data collected from in-depth interviews with healthcare professionals and technology vendors, to provide a balanced and objective view of the market.

For further information about purchasing this report please click here or contact simon.harris@signifyresearch.net.

PHM Growth Slows Down in 1H 2017

PHM Growth Slows Down in 1H 2017

Written by Alex Green

  • Legislative uncertainty has had a tangible short-term impact on the PHM market environment during the first half of 2017
  • Analysis of 1H 2017 results of six leading public PHM vendors (Evolent Health, Cerner, Allscripts, athenahealth. Philips and Conifer Health) provides a “mixed bag” in terms of public results.
  • Full analysis of the market will be presented in Signify Research’s mid-year PHM market report in September

Analysis

Signify Research will publish its Q2 2017 North American population health management market report in the coming weeks. A key question that will be addressed is the extent to which uncertainly around US health legislation reform has impacted the PHM market in North America during the first half of this year.

The 1H 2017 results of several leading public companies with PHM businesses are discussed below as a scene setter to Signify Research’s upcoming report:

Evolent Health

Evolent Health saw the number of lives managed on its Identifi platform increase from 1.4 million at the end of June 2016 to approximately 2.8 million at the end of June 2017. Revenues for the company have more than doubled during the first half of 2017 compared to the same period in 2016; it has also nearly doubled the number of customer over this period too.

It should be noted that these revenue figures and the platform user numbers include business in other areas beyond PHM, such as delivery network alignment, financial and administrative performance and pharmacy benefit management. However, a significant proportion of Evolent Health’s business is estimated to be driven by platform customers utilising its population health management modules. This share has increased over the last 12 months via its acquisition of Valence Health.

The above results paint a relatively positive picture, but digging underneath there are some concerns. The business is still operating at a loss, and it is now not expecting to break even this financial year. Further, whilst the number of platform users has doubled over a 12-month period, they’re relatively flat compared to Q1 2017.

In terms of revenue Evolent continues to grow at a rate that out-performs Signify Research’s projection for PHM market growth in North American in 2017. However, the lack of growth in terms of lives managed on its platform over the last three months does raise some concerns for the remainder of the year.

Allscripts

Allscripts’ PHM business grew 8.9% in the first half of the year to reach $118.8M. Growth was driven by non-recurring software delivery revenue associated with client expansion, new client sales of population health solutions, and non-recurring project-related client services revenues. The company’s recent acquisition of McKesson will also give it an additional internal EMR customer base to expand its PHM solution into.

PHM revenue represented approximately 14% of the company’s overall revenues. This was slightly down on recent quarters and is reflective of the strong growth seen in the legacy Netsmart business line.

In terms of profile over the last two quarters, greatest PHM market growth was seen in the 2nd quarter of the year. Many of the PHM vendors that Signify Research has interviewed as part of the research process had reported that revenue growth was slower in the first quarter due to customer sentiment; however, growth rates bounced back in Q2 2017. It would appear Allscripts PHM business has followed a similar pattern.

Cerner

Over the first two quarters of this year Cerner has performed relatively well in terms of adding new PHM clients as well as expanding the range of HealtheIntent PHM modules that existing clients purchase. Its PHM customer based is estimated to have expanded from approximately 110 clients at the start of the year to approximately 130 at the mid-point. This was made up of mostly provider networks, but also employers, government agencies and payers. New additions/new contracts announced over the first half of the year include Carolinas Healthcare, St Joseph’s Health Care, Truman Medical Centre and San Juan Regional Medical Center. It can now also boast a number of Epic EMR customers that have chosen Cerner as their PHM solution provider.

Cerner’s overall business grew 6.3% in Q2 2017 compared to the same period in 2016. The share of this business that is driven by PHM is relatively small. However, over the last few years Cerner has gradually increased this share so that PHM contributed to 4.6% of business in 2016. It has been assumed that this trend has continued during the first half of 2017, although the change is not estimated to have been dramatic.

athenahealth

athenaheath’s overall business grew 15% in Q2 2017, compared to the same quarter in 2016. This was somewhat of a bounce back compared to a disappointing first quarter and is in line with the overall growth guidance for the company for the full year.

In contrast to the first quarter where PHM growth (in terms of lives managed) was strong, net additions to athenahealth’s PHM platform numbered less than 4,000 in Q2 2017, compared to over half a million in the previous quarter.

This does raise some concern after a particularly strong first quarter for PHM growth. The company attributed this slower growth in the last quarter to provider demands for better integration of PHM solutions with other clinical systems & the slower than expected roll-out of PHM within its existing customer base to lower risk groups of the population.

Conifer Health Solutions

Conifer Health has established a strong position in terms of revenue share within the PHM market, albeit with strong ties to its two owners, Tenet Healthcare and Catholic Health Initiatives (CHI). Combined these two owners/customers are estimated to have driven around 75% of Conifer’s overall business (this includes PHM and other product lines) over the last quarter.

Q2 2017 results show that the business has grown 3.6% compared the same quarter in 2016. This compares to respective growth of 4.4% in Q4 2017 and 4.7% in Q4 2016. These last three quarters demonstrate significantly lower growth than that seen during the first three quarters of 2016 where YoY growth ranged from 12.5% to 14.7%, suggesting that Conifer’s business has to some extent been impacted by legislative uncertainty. However, its reliance on its two owner-customers does blur the message to some extent.

Philips

Philips PHM business sits within the company’s Connected Care and Health Informatics business line. This business line has grown 2.7% in the first half of 2017. However, the PHM sub-segment of this business line was not the driver of this growth.

The PHM sub-segment (which includes Philip’s telehealth product lines along with the legacy Wellcentive business) represented approximately 8% of Connected Care and Health Informatics in 2016. This segment has seen a low single digit decline in the first half of 2017 compared the same period in 2016, with ACA uncertainty being given as one of the underlying reasons behind this decline.

Key Takeaways

Combined along with the reported PHM market date from other leading PHM vendors, these results do indicate that, with some exceptions, typically vendors have seen a tangible negative impact from the legislative uncertainty that has defined the US market place over the first half of 2017. Signify Research will be lowering its projections for 2017 PHM market growth in our market update from the low teens to high single digit in our forthcoming update.

Many PHM vendors have reported that the first quarter of the year did present a particularly challenging market environment, with some orders being delayed. Some vendors have continued to see a challenging environment continue in the second quarter, although in general a more positive sentiment has returned. Fundamentally, vendors and their customers expect the transition to value-based care to continue and the regulations and mechanisms that have been put in place to help drive this to remain. However, legislative uncertainty has resulted in a short-term slowing this process.

This analysis is focused on the results of a small (albeit important) group of PHM vendors, and specifically those that are publicly quoted. Signify Research will be publishing an update of its North American PHM market report in September and a more comprehensive analysis of all vendors active in this market will be presented then, along with a thorough analysis of market performance during the first six months of 2017.

New Market Report from Signify Research

This analysis is a scene setter for Signify Research’s mid-year update report on the North American PHM market. The report is a component of the Signify Research “PHM & Telehealth Market Intelligence Service”. Vendors tracked include Aetna, Allscripts, AthenaHealth, AxisPoint Health, Caradigm, Cerner, Conifer Health, eClinicalWorks, Enli, Epic, Evolent, HealthCatalyst, Humana/Transcend Insights, IBM Watson Health, McKesson, Medecision, Meditech, NextGen, Optum, Orion Health, Premier Inc., Verscend, ZeOemga and others. The report provides quarterly market estimates for 2015, 2016 & 2017, and annual forecasts by vertical, function, service type, platform delivery and country to 2021.

For further information about purchasing this report please click here or contact Alex.Green@signifyresearch.net.

About Signify Research

Signify Research is an independent supplier of market intelligence and consultancy to the global healthcare technology industry. Our major coverage areas are Healthcare IT, Medical Imaging and Digital Health. Our clients include technology vendors, healthcare providers and payers, management consultants and investors. Signify Research is headquartered in Cranfield, UK.

To find out more:
enquiries@signifyresearch.net, T: +44 (0) 1234 436 150, www.signifyresearch.net

Is Enterprise Imaging on a Slow Road to Mediocrity?

Is Enterprise Imaging on a Slow Road to Mediocrity?

The evolution of the imaging IT market over the past decade has been messy. Previously clear definitions for PACS and RIS have blurred, and healthcare providers have struggled to keep up. Consequently, the sector is in a state of uncertainty and flux as it slowly travels the path toward enterprise imaging.

Radiologists have found their influence over decision-making for new software has dwindled, a trend that’s intensified with new market competitors offering disruptive alternative business models and products. Based on our recently released research on the imaging IT and archiving and management IT software market, here is our view of the market today, and, ultimately, where we’re headed.

This is the opening extract of Steve’s regular monthly market column for AuntMinnie Europe.  

To read the full article, please click here.

(Access to the article may require free membership to AuntMinnie Europe – it’s full of great content and insight so well worth signing up!) 

Enterprise Imaging to Account for 27% of Global Imaging IT Market by 2021

08 August 2017

Enterprise Imaging to Account for 27% of Global Imaging IT Market by 2021

A battle is raging in imaging IT today. Once a profitable hunting ground for traditional Picture Archiving and Communication System (PACS) firms, new market entrants from the content management, archiving and informatics market are looking to disrupt the status quo. Pushing “deconstruction”, “reconstruction” and “distributed” multi-vendor imaging IT models, they have grabbed the attention of healthcare providers.

However, traditional PACS vendors have also been expanding their offerings, pushing “Enterprise Imaging” solutions (bundled viewer, workflow, dashboarding and archiving) as an upgrade to their stand-alone PACS offerings.

The below offers a summary of the key findings from the new report: “Imaging IT and Archiving & Management IT – World – 2017”, published by Signify Research, to investigate the adoption of new imaging IT models.

Enterprise Imaging on The Up

One of the clearest findings from the report shows that single-vendor, enterprise imaging IT looks set to significantly increase its share of the market (see figure). Over the next five years, we forecast enterprise imaging revenue to more than double globally, by far the fastest growing segment in the market. But what is driving this trend and what does it mean for new models offered by non-PACS suppliers?

Incumbent Advantage

Traditional PACS vendors have the largest installed base of standalone PACS, RIS and CVIS software in the market today. This is a clear advantage as healthcare providers see many positives from upgrading their departmental solution to enterprise imaging, including:

  • Perceived speed and lower expense of implementation with same vendor
  • Less training required for staff and clinical disruption with similar user interface and system
  • Perceived lower IT administration and professional service
  • Single platform approach – perceived to aid workflow efficiency
  • Relatively broad clinical coverage and capability
  • Easier to work with single vendor (“one throat to choke”)

Additionally, the core strengths of enterprise imaging solutions fit the needs of the largest addressable market segment, the mid-size hospital market. Combined with many providers in the large and small hospital segment as well, these customers form the core of traditional PACS vendor installed base. Today there is far greater focus on efficiency, workflow and speed of implementation given the current pressures on healthcare funding in this sector. With a single vendor enterprise imaging platform, it is perceived that these core needs can be better addressed than with a multi-vendor, best-of-breed model.

For best-of-breed vendors pushing a deconstructed multi-vendor model, this limits their addressable market. Best-of-breed clinical specialists increasingly find themselves pushed out of most enterprise deals today, especially with an incumbent PACS vendor. Their mainstay opportunities instead are academic providers willing to accept the longer and more expensive implementation required with multi-vendor deconstructed models, though these tend to be less frequent in comparison.

Changing Provider Power Base

A change in decision-making power within health provider procurement is also impacting the way in that imaging IT strategy is decided, especially in North America. Centralisation of IT administration as provider networks have expanded created a new powerbase for procurement. Archiving and management vendors have been quick to exploit this in the largest networks. Vendor Neutral Archives (VNAs) and Independent Clinical Archives (ICAs) from specialist vendors are more advanced in capability in most instances and can connect different departmental imaging IT systems to centralise image management and storage at far lower cost than a complete replacement of all imaging IT.

Following this success, archiving and management vendors are also eyeing the clinical realm, developing their own clinical modules for viewing, workflow, clinical review and even diagnostic capabilities. By using their foundation of the application content layer in a health provider’s stack, they are trying to push into front line clinical and diagnostic use. Moreover, they are looking to use the power of the CIO in enterprise provider IT procurement as leverage to adopting their solutions.

Clinical Breadth Still Important

However, clinical and diagnostic capability is the mainstay of traditional PACS vendors, with decades of clinical expertise in diagnostics and a breadth of tools in many clinical applications. Our research with industry vendors from across all product types has highlighted that for many providers, clinical breadth of solution remains a major factor in decision-making. This has so far limited independent archiving and management firms from any real success with their clinical or diagnostic capabilities, as most have far less clinical breadth than traditional PACS firms. Moreover, many traditional PACS vendors have now developed or acquired archiving and management capability for their enterprise imaging products. By doing so, this removes the need for standalone solutions from non-PACS competitors, especially in the mid and small provider segments where advanced imaging management and archiving capability is less important.

The Bigger Picture

When considered in the wider market context, enterprise imaging from the largest PACS vendors has a further advantage, often overlooked. Healthcare budgets are being squeezed and this is forcing a change in procurement, especially towards bundling of hardware and services in long-term managed service contracts. Most of the major PACS vendors are also imaging modality vendors, as well as offering a host of other clinical hardware and software across the clinical sector.

In bundling their portfolio together with their enterprise imaging IT solutions, they can offer advantages from a cost perspective. These deals tend to be more aggressive on pricing, especially as long-term deals become more common, as they “lock-in” customers and with it, future revenue. Consolidation to a single vendor in this way is also perceived by providers to offer greater benefits in maintenance, support and integration.

For many providers, the perceived positives discussed above offer the best mid-term solution to meet their cost and efficiency goals, while limiting disruption. The single vendor enterprise imaging approach may lead to future challenges with regards to interoperability and content management of images and data down the line, especially when dealing with unstructured content or complex information exchange between providers. While this remains to be seen and further evolution of imaging IT models should be expected, it looks like enterprise imaging will be winning the lion’s share of revenues in the near and mid-term future.

New Market Report from Signify Research

The market data presented above is taken from Signify Research’s just published report “Imaging IT and Archiving & Management IT – World 2017”. The report is the first component of the Signify Research “Clinical Content Management IT Service” subscription.
The report provides market estimates for 2015 & 2016 with annual forecasts for radiology IT (PACS, RIS), cardiology IT, enterprise imaging, standalone VNA and standalone image exchange to 2021. Each product market is further segmented by revenue component (software, services (implementation, maintenance, consulting etc.) architecture, provider scale and business model, in 23 geographic markets. Competitive market data is provided by sub-region in each major product category.

About Signify Research

At Signify Research we are passionately curious about Healthcare Technology and we strive to deliver the most robust market data and insights, to help our customers make the right strategic decisions. We blend primary data collected from in-depth interviews with technology vendors and healthcare professionals, to provide a balanced and complete view of the market trends. Whether our research is delivered as an off-the-shelf report or as a consultancy project, our customers benefit from direct access to our Analyst team for an expert opinion when they need it. We encourage our clients to think of us as an extension to their in-house market intelligence team.

Our major coverage areas are Healthcare IT, Medical Imaging and Digital Health. In each of our coverage areas, we offer a full suite of solutions including Market Reports, Custom Research and Consultancy services. Our clients include technology vendors, healthcare providers and payers, management consultants and investors.

For further information about purchasing this report please click here or contact steve.holloway@signifyresearch.net.

3 Things European Radiology IT Needs To Get Right

3 things European radiology IT needs to get right

“Progress is impossible without change, and those who cannot change their minds cannot change anything.” – George Bernard Shaw

The above quote sums up neatly a concern in European radiology IT today: Technological innovation has changed almost every aspect of society, yet for the most part there has been no change in radiology IT.

Processing speed has increased, advanced visualisation has become more complex, and access has improved, but little has changed for the most part. Computer-aided detection (CAD) is still underutilised and barely used. Imaging sharing within and between providers is poor. Departmental PACS and RIS still dominate. Procurement regularly “rolls on” contracts with the same incumbent vendor, rather than face migration.

This is the opening extract of Steve’s regular monthly market column for AuntMinnie Europe.  

To read the full article, please click here.

(Access to the article may require free membership to AuntMinnie Europe – it’s full of great content and insight so well worth signing up!) 

Philips Acquires TOMTEC – The Signify View

Philips Acquires TOMTEC – The Signify View

Written by Steve Holloway

  • Philips Healthcare has acquired ultrasound image analysis software vendor TOMTEC Imaging Systems GmbH
  • The acquisition is the latest acquisition by Philips Healthcare in 2017, with more than $2B invested to date
  • TOMTEC acquisition is designed to complement Philips’ strength in cardiology ultrasound and bolster its’ capability in radiology and OB/GYN ultrasound
  • Philips Healthcare announced no intention to change to TOMTEC’s vendor neutral product supply to third parties (including Philips main competitors in ultrasound).
  • Acquisition further highlights Philips Healthcare strategy to establish full complement of clinical hardware and software solutions that can be used in long-term managed service deals

Philips Healthcare has been making some major investments, with TOMTEC Imaging Systems the latest in a spree spanning the first half of 2017. So, what does this flurry of spending say about Philips’ strategy and its’ impact on the wider market? Here’s our take:

The Signify View

A protectionist endeavour?

TOMTEC Imaging Systems is one of the most widely used specialists for ultrasound image analysis software, especially in cardiology. Their core product line is used by many major ultrasound and healthcare IT software vendors, most of which are Philips’ direct competitors. A simple scan of the TOMTEC website boasts an impressive partner list:

All the vendors in this list compete with Philips in their core imaging and imaging IT markets, with GE Healthcare, Toshiba Medical Systems and Siemens Healthineers Philips’ biggest competition in their core ultrasound, interventional X-ray and healthcare IT business. While Philips was quick to clarify that the vendor-neutral business model for TOMTEC products would continue, it’s hard to see in the long-term that Philips will want to continue to supply market-leading analysis software to its closest rivals. This is even more unlikely given Philips’ current market leading position in cardiology ultrasound and interventional cardiology. Philips will no doubt argue that the TOMTEC acquisition is part of its broader push to offer a completely integrated clinical hardware and software offering (more on that below). However, the cut-throat nature of healthcare procurement today suggests that vendor-neutral supply will not continue indefinitely, especially if Philips’ market leading position is challenged. It may not be too long before Philips’ competitors start looking for a new partner to replace TOMTEC.

Splashing The Cash

The TOMTEC deal is the latest in a flurry of over $2 billion of acquisitions for Philips Healthcare in 2017:

It is well known that Philips has undergone a significant re-focusing in the last five years. Over that time, it has shed its TV, Lifestyle Entertainment and Lighting (via IPO) businesses, to focus on healthcare and personal health exclusively. And it’s a strategy that seems to be working; at the end of 2016 Philips posted solid revenue growth of between four and seven percent across its three core business lines (Diagnosis & Treatment, Connected Care & Informatics, Personal Health). At the half-year in 2017, growth continued, with three percent, two percent and six percent revenue growth. More impressive is that 1H 2017 has been challenging for most of Philips’ core product markets. Uncertainty in the US market about the repeal of Obamacare, combined with sluggish demand from emerging BRIC+ economies has supressed growth opportunities. While an unexpected boost to Western European demand has helped bolster 1H 2017 results, recent results from Philips are impressive.

However, there may also be more to the timing of Philips digging into its cash reserves. Two of its main competitors (Siemens Healthineers, Toshiba Medical) are undergoing major transitions. Toshiba is currently navigating a complex integration with Canon, pulling together disparate subsidiaries such as Vital Images, Delft DI and Olea Medical, while Siemens Healthineers is creeping towards a much-anticipated initial public offering (IPO). Even GE Healthcare, Philips’ biggest challenger in healthcare technology, is undergoing a major corporate change in direction towards becoming a “digital” company. Philips’ sudden investment flurry should be therefore viewed as both a calculated show of strength and a marker of future intention. Take note.

Long-term incumbent ploy

The breadth and variety of acquisitions Philips has made in 2017 also well suits its long-term strategy. Following Philips transition’ and re-focusing on healthcare, it has become apparent the company is positioning itself to become the “one-stop-shop” for clinical software and hardware to major health providers. By bringing in complementary, marquee acquisitions to its core business (think Volcano, Spectranetics) and expanding into new areas such as digital pathology (PathXl) and Population Health Management (Wellcentive), Philips is building a comprehensive portfolio of clinical, diagnostic and home care offerings.

For healthcare providers, a single-vendor option for providing comprehensive clinical hardware and software has many benefits, including reduced administration costs, simpler procurement and fewer implementation challenges. Moreover, it offers opportunity for contract innovation, with longer-term, managed service or risk-sharing agreements easier to implement.

Philips has been one of the “first movers” to this approach, with publicised, long-term (ten years or more) managed service deals announced in the last few years. In doing so, Philips can embed itself into the working practices of the healthcare provider and essentially “lock-out” competition long-term while guaranteeing predictable revenue. There is significant risk to providers in this approach, such as limiting adoption of best-of-breed technology from other vendors and the risk of being “locked-in” to future hardware and software upgrades regardless of capability or functionality. However, such agreements are becoming more common with other vendors following suit, suggesting that providers are willing to take these risks.

The recent spate of investment from Philips therefore appears to not only be adding further capability to its portfolio, but with it, greater impetus in their push towards the “one-stop-shop” model.

Traversing Telehealth’s Acuity Pyramid

Traversing Telehealth’s Acuity Pyramid

Written by Alex Green

  • In June 2017 Teladoc announced it would acquire Best Doctors
  • This represented the latest development in a wider trend across the telehealth industry of platform vendors and service providers expanding their coverage to different levels of the acuity pyramid
  • At the same time platform vendors are grappling with which strategy to follow, especially whether to expand their offerings horizontally to include services such as physician support

Teladoc’s recent acquisition of Best Doctors last month was a clear indication that Teladoc was embarking on a strategy to expand its coverage to higher levels of acuity.

With revenues of $123M in 2016, Teladoc has achieved widespread success in developing its brand and services addressing the low-acuity level telehealth needs across the US. Its services and capabilities were particularly well suited to areas such as behavioural health, general medical advice, sexual health and tobacco cessation. Of the varying levels of acuity addressed via telehealth this is perhaps the most mature area and crowded sector in terms of service providers and platform vendors. It is also an area of telehealth where consultation volumes are high, but the cost savings that it provides are lower, as are the revenues per consultation. Many companies such as American Well, Doctor on Demand, Babylon Health and MDLive target this sector of the market and it’s becoming a crowded space. Consequently it’s becoming increasingly difficult to offer clear differentiators whilst mantaining competitive pricing. The fact that despite its success Teladoc is still operating at a net loss illustrates this dynamic well.

In contrast, Best Doctors’ services sit at higher levels of acuity and are focused on improving health outcomes for the some of the most complex, critical and costly medical issues. This includes cancer, musculoskeletal disease and cardiovascular conditions. The company’s long-standing strategy has always been to focus on high complexity cases at the top of the acuity pyramid.

This results in a far lower volume of cases. For example, Best Doctors has only completed approximately 60,000 consultations since 2009, compared to Teladoc’s 950,000 in 2016 alone. However, the costs savings provided and the revenue per consultation have been much higher. Again, illustrated well by comparing Net Doctors $92M revenues in 2016, with these much lower volumes, and Teladoc’s aforementioned $123M.

This acquisition marks a wider trend that is being seen in telehealth, as companies that have tended to operate at a specific level within the acuity pyramid look to expand their business into other areas, both in terms of a move to higher levels of acuity and going down the pyramid to lower levels of acuity.

In contrast to Teladoc, InTouch Health has for some time been offering platforms and services at high levels of acuity in hospital settings, addressing needs such as TeleICU and TeleER. However, its plans to address the direct-to-consumer, at-home monitoring and care coordination markets over the coming 12-18 months illustrates a direction of travel down the acuity pyramid.

This does beg the question which direction is easier for a platform vendor or service provider, and where are we likely to see companies having greatest success as they embark on this move? Will those at the top and making the jouney down find it easier, or those at the bottom heading up?

When moving down the acuity pyramid, vendors and service providers face the challenge of a much more competitive market place and one that is likely to become increasingly commoditised. Differentiation will become an increasing challenge as will competition in terms of pricing. That-being-said, the specialist expertise required to support these services tends to be much less demanding. In summary, although barriers to entry can be lower, driving a profitable business model as a company heads towards the bottom of the pyramid is a much greater challenge!

Moving up the pyramid presents its own challenges as a greater depth of expertise in complex issues is required, as is closer relationships with health systems. Barriers to entry when moving up the pyramid therefore tend to be more complex, but the returns in terms of profitable business models can be much greater.

However, whichever direction a company is heading, the need to broaden coverage appears to real. As health systems look to expand their telehealth coverage and move out of trial deployments to service-wide deployments, it will become increasingly important that telehealth platform providers and service providers have a wider breadth of services across the acuity pyramid to address the complete set of needs of a provider. This journey is one that few can avoid.

In addressing this trend, Teladoc’s strategy to expand via acquisition does represent a logical approach, particularly for a company heading up the pyramid. Instead of relying on developing the expertise and relationships in house it can instead leverage that which is already in place within Best Doctors. So expect more M&A activity as other service providers and vendors broaden their coverage across the pyramid.

The trend to expand coverage across the acuity pyramid is also coupled with another trend; expanding offerings to also include physician support services. Providers are increasingly looking for telehealth platform vendors that can not only offer them a software solution but also the physician support services to aid them deploying telehealth offerings. This can be to either completely support the telehealth services of a provider’s physician coverage, or as a compliment to their internal resources (e.g. to provide capacity relief or specific condition expertise).

Platform vendors have two options in addressing this demand: either they can acquire service providers and develop the service offering in-house; or they can form strategic partnerships with existing telehealth service providers. InTouch Health is a good example of a company that has addressed this via the second option. It has both developed its capability internally and via its acquisitions over the last 12 months. This includes acquisitions of telehealth service providers C30 Medical Corporation and AcuteCare Telemedicine (ACT). In contrast Avizia is an example of one that has followed the strategic alliance route via its partnership with telehealth service provider MLS Telehealth. Indeed, MLS Telehealth has benefited considerably from this trend as it now supports many telehealth platform providers’ requirements in this area.

Again, the question begs as to which approach is better. Developing services in house presents a multitude of challenges. Being a software platform provider demands an extremely different set of internal skills to being a healthcare service provider. Furthermore, the range of specialisms required to address the plethora of conditions that could potentially fall under the remit of a telehealth service means that any attempt the bridge these demands is a huge undertaking. The partnership route means that platform providers can instead focus on their core compentency and leverage capacity and specialism where needed, without having to develop it in-house. So, we expect only those with the scale and finances required to undertake the internal development to follow the InTouch Health example.

About the Report

The information presented in this insight sets the scene for Signify Research’s upcoming market report “Acute, Community and Home Telehealth—2017 Edition”. This report will present the market for telehealth platforms, hardware and services and will include projections and market sizings for more than 20 countries.

The report is available as a stand-alone product, but it is also a component of Signify Research’s newly launched ”Population Health Management and Telehealth Service”. This is a year-round service that provides ongoing data, insights, and analysis on the global population heath management and telehealth markets. The service includes four market reports delivered over a 12-month period, regular updates of key market metrics, competitive environment and market share analysis by product type and region and quarterly analyst briefings to each subscriber firm.

About Signify Research

Signify Research is an independent supplier of market intelligence and consultancy to the global healthcare technology industry. Our major coverage areas are Healthcare IT, Medical Imaging and Digital Health. Our clients include technology vendors, healthcare providers and payers, management consultants and investors. Signify Research is headquartered in Cranfield, UK.

To find out more:
enquiries@signifyresearch.net, T: +44 (0) 1234 436 150, www.signifyresearch.net

Cone-Beam Technology in Medical Imaging

Cone-Beam Technology in Medical Imaging – From Teeth to Tumours

Written by Holly Keats PhD

Cone-beam technology is a relative newcomer to medical diagnostic imaging; until recently it has predominately been used in the world of dental healthcare. It has been marketed to the medical world on a small scale so far, but could it be the ‘next big thing’ in medical imaging?

To understand the differences of this type of imaging, here is a basic overview of the technology: Cone-beam technology scans through single rotation across an angle ≤360o to produce an anatomical 3D cross-section similar to a CT scan. However, a CT scan rotates multiple times around the patient to form a 3D cross-sectional image. These differences are highlighted in the Table below.

Now, a CT scan is well understood; with the technology producing a full field cross-section of the human body from a helical scan across >360o of the patient. In contrast, a cone-beam scan can produce 3D images of a region of interest (ROI) smaller than the full anatomical cross-section, as well as producing a full field cross-section without a full 360o rotation of the x-ray source and detector.

The question therefore is; is it the x-ray rotation that makes it a CT, or is it the cross-sectional images produced? We suggest this taxonomy:

  • To differentiate between CT and cone-beam, one difference is the multiple, rotation of CT scans, versus a single rotation of a cone-beam scan.
  • To differentiate between cone-beam CT (CBCT) and cone-beam radiography, the difference is a full field cross-section versus a sub-section, focusing on an ROI.

With or without the language clarifications, the low dose/high resolution diagnostic scope of cone-beam technology is being hailed by manufacturers as a more efficient way of imaging anatomical regions in 3 dimensions. It has been put into practice across a number of medical areas:

Cone-beam Technology In Diagnostic Radiography

Compared to the world of dental radiography, the field of medical ENT (Ear, Nose and Throat) imaging has many similarities; cone-beam technology can be utilised to image a variety of small intricate anatomical structures for diagnostic purposes at a lower dose. A white paper by Soredex highlighted a good example: The placement of cochlear implants into the inner ear is a delicate procedure; in cases when the post-operative performance of the implant was not adequate, cone-beam technology has been used to image the implant in 3 dimensions, to identify the source of the problem.

Another example came from targeted radiotherapy treatment of non-small cell lung cancer (NSCLC), where imaging equipment such as CT and MRI is used to monitor the cancer’s response to treatment. This type of diagnostic imaging is taken at limited time points across the treatment programme because of issues such as cost and x-ray dose risk. During NSCLC treatment, cone-beam technology can be used before each radiotherapy treatment (often a daily routine) to accurately identify the position of the tumour, so that the radiotherapy treatment is targeted for maximum efficacy. Research carried out in a recent study in the Netherlands found that by analysing these images taken during the patient setup, they could more closely monitor the cancer using the cone-beam images in a frequent, lower dose alternative to CT imaging.

As well as the dosimetry issues of conventional CT scans, another challenge is that the patient must be in a supine position for the images to be taken; this becomes a problem when imaging areas of the body which are affected during weightbearing. Carestream Healthcare and Planmed Oy both manufacture cone-beam imaging systems for use on extremities. This technology is being used to image fractures and arthritis while the patient is weight or load-bearing, to visualise the patient’s anatomy under tension.

Cone-beam Technology In Interventional Radiology

Cone-beam technology is not restricted to diagnostic cases; it has also been utilised in the treatment of certain cancers. Siemens have included cone-beam technology within their angiography system since 2004. In 2012 a white paper highlighted the use of cone-beam technology for 3D imaging of the blood vessels which feed a tumour in the liver. These blood vessels are identified using contrast dyes in the blood stream of the patient, and then injected with a chemotherapy drug cocktail, giving targeted treatment to the patient in a procedure called chemoembolisation.

So the cone-beam technology has been used as part of Siemens’ angio systems imaging protocol for some time. More recently it has been used to confirm the accurate placement of stent implantation after a cerebral aneurysm. Siemens’ syngo DynaCT was used to confirm the 3D position of a stent placement procedure across a cerebral aneurysm in the Rush University Medical Centre, Chicago in 2016. In this instance, the images from the cone-beam technology were also used to view the structure of the blood vessels and the aneurysm after the initial stents were placed.

Getting To The Point Of Cone-beam

Regardless of the language, cone-beam technology cannot be discounted as an imaging fad if it’s success in the dental imaging market is anything to go by. Expansion into similar fields like ENT and divergence into interventional imaging and oncology indicate the scope of potential clinical use cases. Having said that, if not clarified, the ambiguity of the language could cause confusion for users and vendors, which may impact market growth.

There are two important features for cone-beam technology that make it a viable alternative to conventional imaging:

  1. The dosage of x-ray is less in a cone-beam scan than a standard CT scan, but with similar 3D imaging results
  2. The cone-beam technology not only images full cross-sections of anatomy, but also more specific regions within the patient, such as the ear or liver area, which can be view in better quality images than standard radiography, because of the 3D image.

What is interesting about this technology is that there are some companies who are manufacturing and marketing medical-specific cone-beam technology; such as the Carestream OnSight 3D Extremity System, or Planmed Oy’s Verity, for imaging the extremities. But there are also established manufacturers of the technology for the dental market. In some cases therefore, it will be a rebranding exercise to move cone-beam from dental into the medical market. But these systems may only be applicable for head and neck imaging – what about extremities, or chest x-rays; which makes up the biggest volume in of x-ray imaging?

It seems that the next market to see growth in cone-beam technology will be diagnostic x-ray, the bigger question now is what form will it take? Integrated with conventional general radiography systems, or as a stand-alone system for specific applications. Watch this space.

245M American Lives Managed by PHM Solutions by the end of 2021

20 July 2017

245M American Lives Managed by PHM Solutions by the end of 2021

Data from Signify Research’s report “Population Health Management IT – North America – 2017” shows that the number of lives managed by PHM solutions in North America is projected to increase from 135 million at the end of 2016 to 245 million at the end of 2021.

Over this period, the market in terms of revenues is forecast to grow at a CAGR of 16.6% from $3.6B in 2016 to $8.0B in 2021. Solutions will be implemented by a range of organisations such as providers/ACOs, payers, government organisations and employers. In some cases this will lead to individual lives being managed by more than one entity. The provider/ACO vertical is projected to represent the largest market in terms of both managed lives and platform revenues, with the acute sector driving the lion’s share of the provider market.

Factors Driving Growth

The factors driving the uptake of PHM solutions in North America are focused heavily on US legislation and attempts to modernise health care provision. Although the Trump administration is still attempting to repeal the affordable care care (ACA), creating some uncertainty, it has been assumed that the underlying factors driving PHM growth (such as the move to value-based care) will persist. With most of the dialogue around changes to Obamacare and the Republican alternatives being focused on insurance reform, not care delivery reform, Signify Research expects the rollout of accountable care organisations (ACOs) and share savings schemes to continue. PHM solutions will be a core tool in their implementation.

Outside of ACO implementation, the targets put in place via MACRA/MIPS are also assumed to survive any future healthcare reform. PHM will play a central role for providers implementing strategies to make the transition to value-based care, to hit MIPS targets and to measure performance against these targets.

The Competitive Environment

In 2016 55% of the North American PHM market was accounted for by EHR vendors, such as Allscripts, Epic, Cerner and eClinicalWorks and payer/provider-owned vendors, such as Optum, Transcend Insights, Aetna/Healthagen and Conifer Health. The remainder was taken by broad portfolio healthtech/IT vendors such as IBM Watson Health and Philips and best-of-breed specialists such as Orion Health, Health Catalyst, Evolent and Enli.

In terms of overall share, it is estimated that Optum commanded the number one position in 2016, followed by IBM Watson Health, Allscripts and Cerner. However, the supplier base remains extremely fragmented and consolidation is expected to continue over the medium term.

EHR vendors are well positioned to leverage their existing installed base of customers in order to gain share as the PHM market grows. For many, they are banking on PHM driving a large proportion of future company growth as the EHR market matures. However, historically their PHM solutions have fallen short in terms of functionality and performance compared to the best-of-breed specialists. Through acquisition and product development the gap has started to close to some extent, but there still remains a significant opportunity for specialists to also enjoy success over the medium term particularly if they can maintain a leadership position in terms of product functionality and performance.

About the Report

The market data presented above is taken from Signify Research’s just published report on the North American PHM market. The report is a component of the Signify Research “PHM & Telehealth Market Intelligence Service”. Vendors tracked include Aetna, Allscripts, AthenaHealth, AxisPoint Health, Caradigm, Cerner, Conifer Health, eClinicalWorks, Enli, Epic, Evolent, HealthCatalyst, Humana/Transcend Insights, IBM Watson Health, McKesson, Medecision, Meditech, NextGen, Optum, Orion Health, Premier Inc., Verscend, ZeOemga and others. The report provides quarterly market estimates for 2015 & 2016, and annual forecasts by vertical, function, service type, platform delivery and country to 2021.

About Signify Research

Signify Research is an independent supplier of market intelligence and consultancy to the global healthcare technology industry. Our major coverage areas are Healthcare IT, Medical Imaging and Digital Health. Our clients include technology vendors, healthcare providers and payers, management consultants and investors. Signify Research is headquartered in Cranfield, UK. To find out more: enquiries@signifyresearch.net, T: +44 (0) 1234 436 150, www.signifyresearch.net

Enterprise Imaging to Gain Share in Imaging IT

Enterprise Imaging to Gain Share in Imaging IT

Written by Steve Holloway

A battle is raging in imaging IT today. Once a profitable hunting ground for traditional Picture Archiving and Communication System (PACS) firms, new market entrants from the content management, archiving and informatics market are looking to disrupt the status quo. Pushing “deconstruction”, “reconstruction” and “distributed” multi-vendor imaging IT models, they have grabbed the attention of healthcare providers.

However, traditional PACS vendors have also been expanding their offerings, pushing “Enterprise Imaging” solutions (bundled viewer, workflow, dashboarding and archiving) as an upgrade to their stand-alone PACS offerings.

In our latest research report, Imaging IT and Archiving & Management – World – 2017, Signify Research has extensively investigated adoption of new imaging IT models.

Enterprise Imaging on The Up

One of the clearest findings from the report shows that single-vendor, enterprise imaging IT looks set to significantly increase its share of the market (see figure). Over the next five years, we forecast enterprise imaging revenue to more than double globally, by far the fastest growing segment in the market. But what is driving this trend and what does it mean for new models offered by non-PACS suppliers?

Incumbent Advantage

Traditional PACS vendors have the largest installed base of standalone PACS, RIS and CVIS software in the market today. This is a clear advantage as healthcare providers see many positives from upgrading their departmental solution to enterprise imaging, including:

  • Perceived speed and lower expense of implementation with same vendor
  • Less training required for staff and clinical disruption with similar user interface and system
  • Perceived lower IT administration and professional service
  • Single platform approach – perceived to aid workflow efficiency
  • Relatively broad clinical coverage and capability
  • Easier to work with single vendor (“one throat to choke”)

Additionally, the core strengths of enterprise imaging solutions fit the needs of the largest addressable market segment, the mid-size hospital market. Combined with many providers in the large and small hospital segment as well, these customers form the core of traditional PACS vendor installed base. Today there is far greater focus on efficiency, workflow and speed of implementation given the current pressures on healthcare funding in this sector. With a single vendor enterprise imaging platform, it is perceived that these core needs can be better addressed than with a multi-vendor, best-of-breed model.

For best-of-breed vendors pushing a deconstructed multi-vendor model, this limits their addressable market. Best-of-breed clinical specialists increasingly find themselves pushed out of most enterprise deals today, especially with an incumbent PACS vendor. Their mainstay opportunities instead are academic providers willing to accept the longer and more expensive implementation required with multi-vendor deconstructed models, though these tend to be less frequent in comparison.

Changing provider power base

A change in decision-making power within health provider procurement is also impacting the way in that imaging IT strategy is decided, especially in North America. Centralisation of IT administration as provider networks have expanded created a new powerbase for procurement. Archiving and management vendors have been quick to exploit this in the largest networks. Vendor Neutral Archives (VNAs) and Independent Clinical Archives (ICAs) from specialist vendors are more advanced in capability in most instances and can connect different departmental imaging IT systems to centralise image management and storage at far lower cost than a complete replacement of all imaging IT.

Following this success, archiving and management vendors are also eyeing the clinical realm, developing their own clinical modules for viewing, workflow, clinical review and even diagnostic capabilities. By using their foundation of the application content layer in a health provider’s stack, they are trying to push into front line clinical and diagnostic use. Moreover, they are looking to use the power of the CIO in enterprise provider IT procurement as leverage to adopting their solutions.

Clinical breadth still important

However, clinical and diagnostic capability is the mainstay of traditional PACS vendors, with decades of clinical expertise in diagnostics and a breadth of tools in many clinical applications. Our research with industry vendors from across all product types has highlighted that for many providers, clinical breadth of solution remains a major factor in decision-making. This has so far limited independent archiving and management firms from any real success with their clinical or diagnostic capabilities, as most have far less clinical breadth than traditional PACS firms. Moreover, many traditional PACS vendors have now developed or acquired archiving and management capability for their enterprise imaging products. By doing so, this removes the need for standalone solutions from non-PACS competitors, especially in the mid and small provider segments where advanced imaging management and archiving capability is less important.

The bigger picture

When considered in the wider market context, enterprise imaging from the largest PACS vendors has a further advantage, often overlooked. Healthcare budgets are being squeezed and this is forcing a change in procurement, especially towards bundling of hardware and services in long-term managed service contracts. Most of the major PACS vendors are also imaging modality vendors, as well as offering a host of other clinical hardware and software across the clinical sector.

In bundling their portfolio together with their enterprise imaging IT solutions, they can offer advantages from a cost perspective. These deals tend to be more aggressive on pricing, especially as long-term deals become more common, as they “lock-in” customers and with it, future revenue. Consolidation to a single vendor in this way is also perceived by providers to offer greater benefits in maintenance, support and integration.

For many providers, the perceived positives discussed above offer the best mid-term solution to meet their cost and efficiency goals, while limiting disruption. The single vendor enterprise imaging approach may lead to future challenges with regards to interoperability and content management of images and data down the line, especially when dealing with unstructured content or complex information exchange between providers. While this remains to be seen and further evolution of imaging IT models should be expected, it looks like enterprise imaging will be winning the lion’s share of revenues in the near and mid-term future.

New Market Report from Signify Research

The market data presented above is taken from Signify Research’s just published report “Imaging IT and Archiving & Management IT – World 2017”. The report is the first component of the Signify Research “Clinical Content Management IT Service” subscription.

The report provides market estimates for 2015 & 2016 with annual forecasts for radiology IT (PACS, RIS), cardiology IT, enterprise imaging, standalone VNA and standalone image exchange to 2021. Each product market is further segmented by revenue component (software, services (implementation, maintenance, consulting etc.) architecture, provider scale and business model, in 23 geographic markets. Competitive market data is provided by sub-region in each major product category.

For further information about purchasing this report please click here or contact steve.holloway@signifyresearch.net.

Evolving Telehealth Use Cases

Evolving Telehealth Use Cases

Telehealth is no longer about providing patients with on-demand video consultations from home or remotely managing patients with chronic conditions. Instead it now encompasses the whole health care system in terms of care settings. This includes in the home, rural hospitals, ICU units, surgery, post-acute settings and employer locations. This white paper analyses how telehealth is used across these settings.

Click here to download the white paper

Use Cases for Machine Learning in X-Ray

Use Cases for Machine Learning in X-Ray

Written by Holly Keats

Advances in technology and the increase in population continue to apply pressure to radiologists across the world. Although the quality of the images in increasing, so is the quantity; there were ~22.5 million x-ray images taken by the UK NHS in 2016. This becomes even more of an issue when you look at the plateau in the number of radiologists, leading to an increase in time for x-ray analysis; 230,000 patients waited longer than one month for x-ray results within the UK NHS in 2016. The same trend is evident in many other countries around the world.

But general radiography x-ray images only produce a fraction of the volume of data when compared to CT or MRI scans. CT and MRI scans make up such a large portion of the images taken because of both the quantity and the quality of the images. It is within these imaging modalities where disease detection and diagnosis are the most challenging, and human error is the greatest concern. Therefore, it is understandable why most of the companies who are developing machine learning algorithms for medical imaging are focused on MRI and CT, rather than x-ray images. But are there use cases where machine learning can be utilised in general radiographic image analysis, to fulfil a specific need within the healthcare sector?

X-rays are used to diagnose a wide range of conditions, with the most common procedures being extremities, abdomen/pelvis and chest. With chest x-ray procedures accounting for around half of all x-rays taken, this represents the highest volume application, and hence the best potential for a return on investment for algorithm developers. Listed below are some examples:

Enlitic’s deep learning software focuses on image analysis, and covers a wide range of use cases from patient triage to processing insurance and pharmacy data. In China earlier this year, Enlitic partnered with Paiyipai to implement its deep learning technology on the millions of x-rays accumulated from yearly check-ups carried out in health centres across China.

Research carried out in La Fe Polytechnics and University Hospital, and presented at ECR this year, used deep learning in a computer-aided detection (CAD) system to help radiologists perform automated screening of chest x-rays. This increases the efficiency of the process and prioritises abnormal images for analysis. In testing, the machine produces 83% sensitivity and 80% specificity for abnormal cases.

Delft DI (part of Canon) uses machine learning for computer aided detection of TB in developing countries, where TB is prevalent but there is an acute shortage of trained radiologists. The CAD4TB software reads digital chest radiographs looking for abnormalities consistent with TB, and Delft DI claims the software is now more accurate than a human reader (although not as accurate as a specialist physician).

Riverain Technologies uses machine learning and imaging processing algorithms for a slightly different outcome, but has also been showed to have a positive impact on x-ray anomaly identification. The Riverain ‘ClearRead Bone Suppress’ software suppresses the ribs and clavicles in chest X-ray images, which often obscure visibility, making it more difficult to detect abnormalities or nodules in the lung that could indicate diseases such as cancer. The software gives healthcare professionals an unobstructed view of the lungs to help increase lung disease detection rates.

EXINI Diagnostics has identified an alternative use case to chest x-ray, utilising artificial neural networks to detected tumour growth within the human skeleton from x-ray images. The spread of prostate cancer into the skeletal bones can be quantified to identify the tumour burden on the patient, but manual image reading and interpretation is subjective. The EXINI software is used as an imaging biomarker to quantifiably identify ‘hotspots’ from bone density scans where the healthy bone has been overtaken by the tumour. Although it is unclear how EXINI plans to commercialise the software following the acquisition by Progenics Pharmaceuticals in October 2015.

IBM Watson is being used to facilitate a more holistic approach to diagnosis. By the end of 2017, IBM plans to commercialise its ‘cognitive data summarization tool’, which analyses a patient’s individual healthcare background, including results from other imaging studies, for a more informed interpretation of the medical images.

There are also a number of machine learning companies still at the research and development stage of utilising deep learning to detect and aid in diagnosis from radiographic images:

  • Predible Health is developing a deep learning application to detect musculo-skeletal disorders from x-ray images.
  • Lunit use a deep learning algorithm to analyse and interpret x-ray images. The software is involved in disease diagnosis in both chest radiography and mammography.

There is definitely a need for machine learning to aid the detection of anomalies within CT and MRI scans, and there is software capable of doing just that. But is there a need to roll out machine learning across all general radiography procedures? Probably not. Machine learning is capable of being implemented in a wide variety of x-ray medical imaging analysis; from identification of broken wrists to better facilitating the radiologists view of the lungs through bone suppression. But the more important question is not if the software can be utilised, but if the healthcare providers can see a need for the software in the real-world environment, and are prepared to pay for it.

In the longer term, the implementation of machine learning in CT and MRI has highlighted an important point for other modalities: machine learning is best utilised to handle the meta-data of a patient as they are treated for a disease. The software has shown it could be invaluable for tracking, processing and prioritising the huge amounts of information generated. From detection of an abnormality, to tracking a lesion, monitoring risk factors and bringing a personalised treatment plan to the patient; the best use of machine learning in general radiography looks to be associated with the diagnosis and monitoring of diseases, particularly within oncology.

More Money Pours into Medical Imaging AI Startups

More Money Pours into Medical Imaging AI Startups

Written by Simon Harris

We’ve updated our analysis of capital funding for startups who are developing machine learning solutions for medical image analysis to capture the latest deals. You can download the updated report for free here. So far in 2017, five start-ups have received funding, as follows:

Investment reached a new high in Q2 2017, with the four deals worth a combined $27 million. Total investment in 2016 was $63.2 million.

Three of the deals in Q2 were notably larger than usual (average deal sizes tend to be in the region of $2.5 million), with VoxelCloud securing $10 million in Series A funding, following a $5.5 million angel funding round in September 2016. VoxelCloud is now the second most funded medical imaging AI start-up, after Zebra Medical Vision which has received $20 million in funding.

Some of the other key takeaways from our analysis are:

  • Total investment in medical imaging AI startups since 2014 is now at $167 million.
  • There are over 50 start-ups developing machine learning solutions for medical imaging. 28 of these entered the market in 2015 and 2016.
  • Around half of the total investment to date has gone to US-based startups, with Israeli start-ups accounting for around a quarter of the total.
  • In 2016, the first Chinese companies entered the market.
  • Around half of the companies are developing applications for multiple body areas. The others are focused on specific clinical specialities, e.g. pulmonology, breast, cardiovascular, etc.

With 14 new market entrants in 2016 and record investment in Q2, it seems likely that more startups will enter the market in the second half of 2017 and beyond. Q2 also saw the first exit of a medical imaging AI startup, with McCoy Medical acquired by TeraRecon – click here to see our analysis of the acquisition. With the major imaging modality and imaging IT companies strengthening their in-house AI capabilities, and with deep learning specialists a scarce resource, M&A activity looks set to ramp-up in the coming years.

Initial Q1 2017 PHM Market Indicators

Initial Q1 2017 PHM Market Indicators

Written by Alex Green

  • The North American Population Health Management (PHM) market is projected to grow by 15.7% in 2017 to reach $4.3B. This is up from $3.7B in 2016.
  • However, uncertainty around the future of Obamacare is forecast to have some short-term negative repercussions over the coming quarters, resulting in lower QoQ growth than that seen in 2015 and 2016.
  • Analysis of the Q1 2017 results of six leading PHM vendors (Evolent Health, Cerner, Allscripts, Orion Health and Conifer Health) is presented in this insight to test this market projection.

Analysis

In Signify Research’s recently published North American population health management (PHM) market report, uncertainly around the impact of the Trump administration’s changes to the Affordable Care Act (ACA) was forecast to have some short-term negative impacts on PHM market growth in 2017. However, the negative impacts were projected to be minimal, with growth forecast to remain relatively strong as many of the underlying factors driving the market would persist. As several leading public companies involved in the PHM market have now published Q1 2017 results, now is a good time to test this assumption and examine what these early indicators mean for the overall PHM market in 2017.

The results of several leading public companies that have PHM driving a significant share of their businesses are discussed below:

Evolent Health

Evolent Health saw the number of lives managed by its Identifi platform increase from 1.2 million at the end of March 2016 to approximately 2.8 million at the end of March 2017. During this period it has also more than doubled the number of “revenue-producing partners” with revenues for the company up 114% in Q1 2017 compared to the same period last year.

It should be noted that these revenue figures and the platform user numbers include business in other areas beyond PHM, such as delivery network alignment, financial and administrative performance and pharmacy benefit management. However, a significant proportion of Evolent Health’s business is estimated to be driven by platform customers utilising its population health management modules. This share has increased over the last 12 months via its acquisition of Valence Health.

The performance of Evolent Health PHM business over the 12 month period to March 2017 outpaced the market. It is estimated to have jumped from being the eighth largest PHM vendor at the start of 2016 to the fourth largest by the end of the year. This first quarter’s performance suggests that it is continuing to gain share during 2017, but this alone does not give a clear indication as to how the market as a whole is performing.

Allscripts

Allscripts’ PHM business grew 7.3% in Q1 2017 to reach $59.1M. During the quarter, the company continued to add to its CareInMotion PHM customer base and expand its CareInMotion clients beyond the acute market and into physician practices and managed services organisations.

Allscripts also expanded the functionality of the patient engagement component of its PHM solution, FollowmyHealth, which is also assumed to have aided it to drive additional business.

However, YoY PHM business growth of 7.3%, while strong, is below the Signify Research projection for 2017 and lower than that seen by Allscripts in the previous two quarters, suggesting that it is feeling some of the effects of the negative sentiment that healthcare reform is bringing.

Cerner

Cerner’s overall business grew 11% in Q1 2017 compared to the same period in 2016. This was much stronger YoY performance to that which it experienced over the previous three quarters.
Over the last few years, Cerner has gradually increased the share that PHM contributes to its overall business, reaching 4.6% in 2016. It has been assumed that this trend has continued as we move into 2017 and that Cerner’s overall PHM business grew slightly faster than the 11% rate seen for the whole company.

Cerner stated that Q1 2017 has put its PHM business in a position to deliver “significant” double-digit growth over the year and that despite the uncertainty of exactly when a broader shift from fee-for-service to value-based care will occur, there continues to be significant interest in its population health solutions. It went on to state that this has largely been driven by providers understanding the benefit of preparing for the shift to value-based care, well in advance of it occurring. But also in clients using PHM tools to optimise performance in their fee-for-service business model too.

In summary, it is estimated that Cerner’s Q1 2017 PHM business performance was largely in line with the Signify Research prediction for market performance during this period.

Orion Health

Orion Health is another major player in the PHM market. An initial glance would suggest that it has lost share over the last six months. For the six-month period October 2016 to the end of March 2017, the company’s North American revenues fell 5% to NZ$59.8M (US$42.5M). However, this was more due to currency fluctuations and if a constant currency analysis was applied, its North American business grew 9% over its last financial year. That being said, Orion Health is experiencing some challenges as it attempts to implement a rapid transition of its customer base to cloud-based solutions, which to some extent is expected to impact revenue recognition cycles. However, even with the constant currency analysis, growth was below Signify Research’s PHM market growth projection.

athenahealth

athenaheath’s overall business grew 11% in Q1 2017, compared to the same quarter in 2016. This represented a slowdown in YoY growth compared to the last four quarters and performance was below that of the guidance previously given. However, indicators suggest that its population health management business performed better than the wider business. The number of lives managed by its population health management solution reached 2.78 million at the end of March 2017, up 25% on the same quarter in 2016. A clear indication that it’s progressing well in selling the ‘athenahealth Population Health’ solution.

Over the quarter the solution was further expanded in terms of functionality, with the launch of the patient-facing mobile app, athenaWell (a component of its PHM solution). During the quarter athenahealth expanded the rollout of its PHM solution to Dignity Health and went live with Tandigm Health.

The slower than expected overall company growth is estimated to have been more a result of the performance of its athenaOne ambulatory revenue cycle & EHR business where only low single digit growth was achieved.

athenahealth is focusing on expanding its customer base into the acute sector and indications suggest this is proving successful. However, the results further emphasise the importance for EHR vendors in expanding their business beyond traditional EHR and into other areas, such as PHM, if they hope to maintain the growth levels seen over recent years.

Conifer Health Solutions

Conifer Health has established a strong position in terms of revenue share within the PHM market, albeit with strong ties to its two owners, Tenet Healthcare and Catholic Health Initiatives (CHI). Combined these two owners/customers are estimated to have driven around 85% of Conifer’s overall business (this includes PHM and other product lines) during 2015 and 2016. However, Q1 2017 results suggest that despite comparatively slow growth (4.4% compared to the same quarter in 2016), it is starting to have success in expanding its customer base. Revenue from 3rd parties grew much faster at 11.5% in Q1 2017.

For Conifer to continue to hold share as the PHM market grows it’s imperative that it continues this expansion of its customer base. In fact its revenues from Tenet fell 5% in Q1 2017, reinforcing this message.

As an indicator of wider PHM market growth during the quarter, its success in driving 11.5% growth in terms of 3rd party business is perhaps the better metric to use than its internal business with Tenet. The fact the company’s PHM success is so tightly aligned to its business with just two companies also makes its financial performance less telling than other companies presented in this insight when attempting to judge overall market performance.

Key Takeaways

Combined, these results indicate that the PHM market is still enjoying solid growth. However, the uncertainty around legislation is without doubt a concern and our forecast that QoQ growth during 2017 will be slightly down compared to previous years looks accurate. That being said, the projection for double digit growth in 2017 still appears on track.

Although the Trump administration’s intention to repeal the ACA has brought with it some uncertainty, the assumption that the underlying factors driving PHM growth (such as the move to value-based care) would persist, appears to be holding true so far. With most of the dialogue around changes to Obamacare and the Republican alternatives being focused on insurance reform, not care delivery reform, we expect the PHM market to continue to experience strong growth into the medium term.

This analysis is focused on the results of a small (albeit important) group of PHM vendors, and specifically those that are publicly quoted. Signify Research will be publishing an update of its North American PHM market report in September and a more comprehensive analysis of all vendors active in this market will be presented then, along with a thorough analysis of market performance during the first six months of 2017.

New Market Report from Signify Research

The market data presented above is taken from Signify Research’s just published report on the North American PHM market. The report is a component of the Signify Research “PHM & Telehealth Market Intelligence Service”. Vendors tracked include Aetna, Allscripts, AthenaHealth, AxisPoint Health, Caradigm, Cerner, Conifer Health, eClinicalWorks, Enli, Epic, Evolent, HealthCatalyst, Humana/Transcend Insights, IBM Watson Health, McKesson, Medecision, Meditech, NextGen, Optum, Orion Health, Premier Inc., Verscend, ZeOemga and others. The report provides quarterly market estimates for 2015 & 2016, and annual forecasts by vertical, function, service type, platform delivery and country to 2021.

For further information about purchasing this report please click here or contact Alex.Green@signifyresearch.net.

TeraRecon Acquires Machine Learning Platform Developer McCoy Medical

TeraRecon Acquires Machine Learning Platform Developer McCoy Medical – Our Take

Written by Simon Harris

  • On 1st June, TeraRecon, a US developer of advanced visualisation and enterprise medical image viewing solutions, announced the acquisition of a majority share in McCoy Medical Technologies, which provides a developer platform and a vendor-neutral application program interface (API) for machine learning algorithms used in medical imaging.
  • The two companies have formed a new entity, initially called WIA Corporation, that will operate independently from TeraRecon. The new company retains McCoy Medical’s advisory board, which includes Dr. Eliot Siegel (University of Maryland), Dr. Paul Chang (University of Chicago) and Dr. Khan Siddiqui (American College of Radiology’s IT and Informatics Committee).
  • WIA’s strategy is to provide an open platform that enables algorithm developers to commercialise their products, and that makes it easier for end-users to find and purchase algorithms from multiple developers in one location.

Here’s our analysis of the deal, likely outcomes and what this will mean for the imaging IT market.

An App Store for Radiology

WIA Corporation is addressing two of the main challenges for specialist developers of image analysis solutions – the need for an efficient distribution channel and integration with clinical workflows. Along with the challenges of obtaining regulatory approval, these factors have restricted the number of commercially available products and hindered the uptake of machine learning in radiology. As Dr. Keith Dreyer, Vice Chairman of Radiology at Massachusetts General Hospital, pointed out in the opening session at SIIM 2017, there are 2,613 radiology findings and 23,373 conditions. However, the commercialised machine learning algorithms on the market today address only a fraction of these. This is partly because of the time and expense associated with integrating algorithms, typically via PACS or advanced visualisation workstations, into the clinical workflow. Moreover, algorithm developers need an effective route to market. For most health care providers, the time and administrative burden of purchasing algorithms piecemeal from multiple vendors is not a viable option.

With its open platform and vendor neutral API, WIA is creating an online marketplace for image analysis products. The company is in discussion with more than 20 algorithm developers to distribute their products and plans to announce the first ones in the coming weeks. These will likely include commercial image analysis companies and academic researchers. TeraRecon also plans to host its own algorithms on the WIA platform.

For algorithm developers, there is no upfront fee to distribute their products on the WIA platform and, according to WIA, the initial integration typically takes less than a day, depending on the complexity and market readiness of the algorithm. WIA plans to generate revenues from two streams – sales of algorithms through its platform and subscription payments from health providers to gain access to the platform. Providers will likely also pay an upfront fee to cover initial set-up and integration of WIA’s platform with their existing imaging IT systems. The level of commission paid to developers will depend on a variety of factors, including the popularity of the algorithm. A higher rate of commission will be paid to the most popular algorithms. The commission levels are structured to ensure that the algorithm developers receive the largest share of any sales.

Not the First to Market

As was highlighted in our last article on machine learning in medical imaging (Partnerships are King for Machine Learning in Radiology), a number of the leading medical imaging companies have launched open platforms and are establishing ecosystems of companies that provide specialist healthcare applications. Examples include GE Health Cloud, Siemens Healthineers Digital Ecosystem, IBM Watson Health Core and NTT DATA Unified Clinical Archive. Each of these features a mix of products developed by the platform owner and from specialist third party developers. For example, GE Health Cloud features image analysis products from Arterys, Imbio and Pie Medical Imaging, alongside products developed in-house. So, is there room for WIA?

The success of these open platform ecosystems will depend on a variety of factors, including the availability of a wide range of applications and algorithms. For developers, these open platforms are an effective route to market and give access to the platform owner’s installed base of customers. Once the WIA platform has been fully integrated, algorithm developers will have access to TeraRecon’s global customer base of more than 2,000 sites, which should help WIA to attract partners for its platform. As the deal with TeraRecon is not exclusive, WIA is also courting partnerships with other imaging IT vendors to further expand its reach.

The major medical imaging companies that have launched their own open platforms, as mentioned above, could also integrate with the WIA platform to gain access to its partners’ products. A broader range of products will increase the attractiveness of their online marketplaces to health care providers. For the platform owners, a partnership with WIA negates the need to have separate commercial agreements and integrations with each of the developers on WIA’s platform.

WIA is placing a strong focus on academic researchers and universities that have developed image analysis tools but do not have the knowhow or resources to commercialise them. This could lead to the WIA platform having content that is not available from other online marketplaces. As Jeffrey Sorenson, president and CEO of TeraRecon, pointed out at the time of the McCoy acquisition, “The algorithms work, but the business model of a single algorithm doesn’t work. The overhead to commercialise a single algorithm exceeds the value of a single algorithm.”

Beyond Medical Imaging

Some health care providers will see WIA’s exclusive focus on medical image analysis as a positive, but others may prefer the broader scope of the open platform ecosystems from the major health technology vendors. These feature applications for a wider range of clinical needs, including image analysis, analytics, dashboarding, integrated workflow, and in some cases, population health and telehealth. The overarching industry trend towards more integrated care will likely drive demand for enterprise platforms that form a base for all diagnostic and acute clinical care management – a clinical IT equivalent to an EMR.

Over the longer term, these cross-discipline open platforms may limit the market potential for dedicated image analysis platforms. However, at this early stage, there is certainly room for both – any efforts that encourage vendor partnerships and to accelerate the commercialisation of machine learning-based image analysis tools can only be a good thing.

Dr. Holly Keats Joins the Growing Signify Research Team

07 June 2017

Dr. Holly Keats Joins the Signify Research Team

Signify Research (www.signifyresearch.net) is pleased to announce that Dr. Holly Keats has joined its team as a Senior Market Analyst. Holly will be focusing on Signify Research’s Digital Imaging portfolio, initially researching the international x-ray/radiography market.

Holly has 6 years of biological lab experience acquired during her PhD in development genetic regulation; giving her a strong understanding of lab processes, digital image analysis and bioinformatic investigation.

As well as a background in the field of science, Holly also has experience in project and event management; having spent many years organising and competing within the world of amateur boxing.

“I think that my energetic personality and passion will help me build a place within Signify Research as the company goes from strength to strength. This company has a wealth of knowledge and a bright future that I’m excited to be a part of.”

North American PHM Market Worth $8B in 2021

North American PHM Market Worth $8B in 2021

Written by Alex Green

  • North American Population Health Management (PHM) market projected to grow at a CAGR of 16.6% from $3.7B in 2016 to $8.0B in 2021.
  • Lives managed by PHM solutions will increase from 135 million at the end of 2016 to 245 million at the end of 2021 (Note: one life can be managed by more than one organisation, e.g. a payer and a provider, and would be counted twice in this scenario).
  • Analysis and commentary taken from the Signify Research North American Population Health Management IT Market Report

Analysis

Data from Signify Research’s report “Population Health Management IT – North America – 2017” shows that the North American PHM market is forecasts to grow at a CAGR of 16.6% from $3.6B in 2016 to $8.0B in 2021. Over this period, the number of lives managed by PHM solutions is projected to increase from 135 million at the end of 2016 to 245 million at the end of 2021. Solutions will be implemented by a range of organisations such as providers/ACOs, payers, government organisations and employers, in some cases leading to individual lives being managed by more than one entity. The provider/ACO vertical is projected to represent the largest market in terms of both managed lives and platform revenues, with the acute sector driving the lion’s share of the provider market.

Defining Population Health Management

Before digging into the main factors will drive this growth, it’s important first to define what’s included in a PHM solution and in our analysis.

In recent years, a standard structure has evolved in terms of the required components of a population health management platform, and this is a structure that most vendors now adhere to, or are at least working towards, in terms of solutions offered. The structure comprises seven core functional modules:

  • A solution to pool and normalise data from multiple sources so that it can be interrogated as one – data aggregation
  • A solution to interrogate the normalised data to obtain meaning – health analytics
  • A solution that allows the analytics to then be used to drive strategy. Normally by segmenting the population into groups based on health conditions being managed, costs and behaviours – risk stratification
  • A solution that allows standard evidence-based care plans and workflows to be developed for specific segments of the population depending on the conditions they are managing, their risk and their likely behaviours – care management
  • A solution that allows the specific work flows and care plans to be executed across different health care continuums and care teams – care coordination
  • A solution that allows simple, secure electronic communication with patients for messaging, education, data collection, etc. – patient engagement
  • A solution that allows for the impact of each work flow and care plan strategy to be measured and fed back into the overall management system – performance management

It’s the market for platforms that support these functions, and the associated implementation and support/maintenance services, that Signify Research has included within its definition of the PHM market and within its projection of an $8.0B market in 2021.

Factors Driving Growth

The factors positively affecting the uptake of PHM solutions in North America are focused heavily on US legislation and attempts to modernise health care provision, such as.

  • Elements of the Affordable Care Act that are expected to remain in place
  • The move from fee-for-service to value-based care
  • Providers taking on risk and the rollout of ACOs
  • MACRA

The figure below and the following summary explanation outlines the development of these main themes.

Leading up to 2010 – Poor health outcomes and spiralling health care spending in the US contributed to the development of the Affordable Care Act (ACA).

2011-2015 – To implement ACA, the CMS establishes ACOs and shared savings programs. This encourages providers to better manage their entire population’s health. ACOs receive a share of the financial savings they make from the move to new models of care, assuming quality targets are met. PHM solutions are a key enabler in achieving and measuring these quality and financial targets. Key elements of the ACA that PHM solutions address include supporting wellness services, reducing hospital readmission rates and developing community-based care transition programs.

2016-2019 – MACRA/MIPS targets are established to encourage non-ACO providers to accelerate the move to value-based care. For example:

  • MIPS ‘quality measures’ include targets focused on areas such as improving screening rates and controlling blood pressure of those with hypertension.
  • MIPS ‘improvement activity measures’ include targets related to the increased use of care plans for chronic condition management (e.g. diabetes management) and the increased use of longitudinal care management for high risk patients, such as those recently discharged from hospital.
  • MIPS ‘advancing care measures’ include targets focused on attaining better patient engagement and better care transitions.

PHM platforms provide a range of management tools that have been designed to aid providers and other health care organisations in developing their services in order they improve and report on these measures.

As a note of caution, significant changes to the ACA from the Trump Administration over the period 2017 and 2018 could impact the transition to value-based care. However, the assumption within our market forecasts is that the underlying drivers remain in place.

Beyond 2020 – As the transition to a value-based care model progresses, the triple goal of improved outcomes, improved value for money and improved health of populations starts to be realised. PHM platforms remain a fundamental tool in driving continued quality and financial performance.

New Market Report from Signify Research

The market data presented above is taken from Signify Research’s just published report on the North American PHM market. The report is a component of the Signify Research “PHM & Telehealth Market Intelligence Service”. Vendors tracked include Aetna, Allscripts, AthenaHealth, AxisPoint Health, Caradigm, Cerner, Conifer Health, eClinicalWorks, Enli, Epic, Evolent, HealthCatalyst, Humana/Transcend Insights, IBM Watson Health, McKesson, Medecision, Meditech, NextGen, Optum, Orion Health, Premier Inc., Verscend, ZeOemga and others. The report provides quarterly market estimates for 2015 & 2016, and annual forecasts by vertical, function, service type, platform delivery and country to 2021.

For further information about purchasing this report please click here or contact Alex.Green@signifyresearch.net.

Partnerships are King for Machine Learning in Radiology

Partnerships are King for Machine Learning in Radiology

Written by Simon Harris

For companies developing machine learning solutions for radiology, strategic collaborations and partnerships with healthcare providers are king. Not only do they provide vendors with academic and clinical domain expertise, but they also give access to annotated imaging data to train and validate machine learning algorithms – one of the biggest challenges for most algorithm developers. By working closely with providers, vendors can identify the greatest pain-points for physicians, be it workflow-related or part of the clinical decision-making process, and hence the areas where machine learning can add the greatest value.

To that end, leading medical imaging companies are forging strategic partnerships with health providers to collaborate on machine learning projects, as shown in our graphical analysis below.

GE Healthcare Partners with Partners

One of the most recent was last week’s announcement from GE Healthcare and Partners HealthCare that they have entered a 10-year collaboration to develop artificial intelligence and deep learning solutions. Partners is a Boston-based, not-for-profit health care system that was founded in 1994 by Massachusetts General Hospital and Brigham and Women’s Hospital. Key points from the announcement are as follows:

The collaboration aims to implement AI into every aspect of a patient’s journey through the healthcare system – from admittance through discharge – and spans multiple medical specialties, including radiology, pathology, genomics and population health.

  • The initial focus of the relationship will be on the development of applications aimed at improving clinician productivity and patient outcomes in diagnostic imaging.
  • Early applications will address cases like determining the prognostic impact of stroke, identifying fractures in the emergency room, tracking how tumours grow or shrink after the administration of novel therapies, and indicating the likelihood of cancer on ultrasound scans.
  • GE and Partners will co-develop an open platform to enable them and third party developers to rapidly prototype, validate and share applications with hospitals and clinics around the world.

Strategic Partnerships for Machine Learning Radiology

GE Healthcare, IBM Watson Health, Siemens Healthineers and Philips Healthcare

Note: blue linear lines indicate vendor partners and green leader lines indicate clinical partners
Source: Company annoucements

 

GE Healthcare has existing partnerships with Boston Children’s Hospital, to develop solutions that interpret paediatric brain images faster and more accurately, and with UC San Francisco’s Center for Digital Health Innovation. The partnership with UCSF aims to develop a library of deep learning algorithms, with an initial focus on algorithms that expedite differential diagnosis in acute situations such as trauma.

GE Healthcare also has partnerships with several image analysis vendors, including Arterys and imbio, whose solutions are made available on GE Health Cloud. The solutions developed by GE and its clinical partners will also be available on GE Health Cloud, creating a large library of image analysis applications.

Watson Health Medical Imaging Collaborative Now at 24 Members

IBM Watson Health is also implementing a partnership strategy and in June 2016 it announced the Watson Health Medical Imaging Collaborative. The initiative launched with 16 members, including health systems, academic medical centres, ambulatory radiology providers and imaging technology companies, and has since expanded to 24 organisations. The first application from the collaborative is IBM Watson Imaging Clinical Review, which helps hospitals to identify patients that may have aortic stenosis. Sentara Heart Hospital contributed data from 3,000 heart echo-cardiology studies, 60% of which were used, to train Watson in the development of IBM Watson Imaging Clinical Review. The collaborative is also developing solutions for diseases of the eye, brain and other heart-related conditions such as myocardial infarctions, valve disorders, cardiomyopathy and deep vein thrombosis.

IBM Watson Health is also courting partnerships with image analysis vendors for Watson Platform for Health (formerly Watson Health Core), its healthcare data platform-as-a-service offering, powered by Watson Health Cloud, which features a mix of IBM Watson Health and third-party applications. One of the first third party radiology products is an application from MedyMatch that detects intracranial bleeds from CT scans.

Siemens Launches Digital Ecosystem

Siemens Healthineers announced its new digital healthcare platform, Digital Ecosystem, at HIMSS 2017 and has partnered with several third-party software developers, including Arterys, HeartFlow and SyntheticMR. In January this year, Siemens and Biogen announced an agreement to jointly develop new MRI tools for quantifying key markers of multiple sclerosis disease activity and progression, including new T2 lesions and atrophy.

Siemens has announced relatively few machine learning partnerships with health providers. At RSNA 2016 it presented a prototype developed with Essen University Hospital to improve the diagnostic accuracy of a non-expert radiologist in differentiating between usual interstitial pneumonia (UIP) and non-UIP on thoracic CT. Siemens is also a partner in the ‘Data Intelligence for Clinical Solutions’ project, funded by the Federal Ministry for Economic Affairs and Energy (BMWi), which aims to develop artificial intelligence solutions that provide physicians with differential diagnoses based on available patient data. The clinical partners in the project are Charité hospital in Berlin and Erlangen University Hospital.

Philips Focuses on its In-house AI Capability

Philips Healthcare has several long-term, strategic partnerships with health providers, typically based on a managed services business model. Examples include Westchester Medical Center Health (US), Heart Hospital Tampere (Finland) and Karolinska Hospital (Sweden). However, these partnerships typically do not have specific projects on machine learning. One exception is a deal signed in March this year with Phoenix Children’s Hospital for a 15-year agreement relating to imaging, patient monitoring and clinical informatics, which will explore the use of machine learning in paediatric care.

Similarly, Philips has relatively few partnerships with image analysis software vendors and to date has not pursued the ‘open imaging ecosystem’ approach of GE (Health Cloud), IBM (Health Core) and Siemens (Digital Ecosystem). Instead, Philips appears to be more focused on developing its in-house artificial intelligence capability. At RSNA 2016 it introduced Illumeo, which uses data and contextual awareness to help optimise radiologist workflow. Illumeo adapts the user interface by offering tool sets and measurements driven by the understanding of the clinical context. The software provides the radiologist with the most relevant case-related information from various sources in a single view and generates dynamic reports that can include 3D images or image quantification data.

Not the Only Game in Town

This article has focused on the partnership activities of a handful of the leading medical imaging companies. There is also considerable partnership activity from mid-tier imaging companies looking to add machine learning to their repertoire and the growing number of start-up companies in this field. Moreover, open platforms are available from other vendors, e.g. NTT DATA Unified Clinical Archive, and it is likely than new ones will come on stream in the coming years. Specialist image analysis platforms are also available, such as those from medimsight and McCoy Medical, although these are perhaps better suited to clinical research than mainstream clinical practice.

More Partnerships Still Needed

One of the most commonly cited shortcomings of machine learning in radiology is the limited number of commercially available products. Most vendors offer only a handful of solutions, which are typically focused on a specific application area, e.g. breast, lung or cardiology, which limits the utility of machine learning for most radiologists. Generalist radiologists require a comprehensive “analytical tool kit” with a broad portfolio of algorithms. It’s a daunting task for a single company to create such a library of algorithms, comprising tens and potentially hundreds of analytical tools. Instead, the radiology industry must continue to collaborate for radiologists, and ultimately patients, to fully benefit from the rapid developments in the field of machine learning.

Investment Analysis for Telehealth Companies

Investment Analysis for Telehealth Companies

Since 2013, more than 80 telehealth companies have secured external capital funding. Combined, these companies have raised $2.9 billion in venture and private equity funding. This short report from Signify Research shows the trends in capital funding for these companies and highlights how funding breaks down by company, by region and by telehealth solution type.

Click here to download the report

Investment Analysis for Diagnostic Ultrasound Companies

Investment Analysis for Diagnostic Ultrasound Companies

Since 2010, 29 diagnostic ultrasound companies have secured external capital funding. Combined, these companies have raised $560 million in venture and private equity funding. This short report from Signify Research shows the trends in capital funding for these companies and highlights how funding breaks down by company, by region and by clinical application.

Click here to download the report

PHM 2016 Market Share Analysis

EHR & Payer/Provider-owned Vendors Take 55% of PHM Market

Written by Alex Green

  • Signify Research analysis and commentary from the North American Population Health Management IT Market Report
  • In 2016 55% of the North American PHM market was accounted for by EHR vendors and payer/provider-owned vendors
  • The remaining 45% was made up of a long list of vendors, with the market remaining highly fragmented
  • Optum was the market leader in terms of revenue share in 2016. It was followed by IBM Watson Health, Allscripts, Cerner and Conifer Health.

Analysis

Data from Signify Research’s report “Population Health Management IT – North America – 2017” shows that in 2016, 55% of the North American PHM market was accounted for by EHR vendors and payer/provider-owned vendors. This was split further into 30% of the market being taken by payer/provider-owned vendors and 25% of the market taken by EHR vendors.

Those that fell into the payer/provider-owned category included companies such as Optum, Conifer Health Solutions, Transcend Insights, Aetna and Medecision. Optum and Conifer Health being the two that commanded the highest share of the market within this category. The EHR vendor list included Allscripts, Cerner, eClinicalWorks, McKesson, Epic, MEDITECH, NextGen Healthcare and athenahealth. Allscripts and Cerner being the two in this group with the highest market share in 2016.

Beyond these two groups, the market remained highly fragmented. Large health IT/technology generalists such as IBM Watson Health, Philips (including Wellcentive) and GE Healthcare (including Caradigm) accounted for approximately 10% of the market between them. IBM Watson Health, via its acquisitions of Truven Health, Phytel and Explorys, had the greatest share within this group.

The supplier base also consisted of a long list of specialists that have portfolios highly focused on PHM and related markets. Of note within this group were Orion Health, Evolent Health, Verscend, Health Catalyst, Enli, ZeOmega and SCIO Health Analytics.

Opportunities Going Forward

As the PHM market develops, both the EHR and payer/provider-owned vendors are expected to have somewhat of an advantage over others. The EHR vendors have an existing installed base of provider customers using their EHR technology that they can leverage as their PHM businesses are developed. However, historically there has been some criticism of EHR vendor PHM solutions. In particular, this related to the sophistication of features offered and the breadth of the datasets used during the data aggregation/risk stratification process. The EHR vendors’ initial patient engagement platform deployments, often designed around a tick box process of supporting meaningful use targets, also reinforced this criticism. The combined result was a perception that EHR vendors’ PHM solutions were simple “bolt-ons” to existing EHR offerings.

This has been addressed to some extent in more recent years. Many EHR vendors have acquired leading PHM vendors (e.g. Allscripts acquisition of dbMotion and Jardogs) to bolster their offerings and have also invested significantly in PHM platform feature-set development. This has resulted in a closing of the gap with the more specialist companies. Many EHR vendors now have business plans that have PHM at the core creating high levels of investment in portfolio development. For example, Cerner has stated it has targets where PHM will drive 20% of its total business by 2025, up from 5% in 2016.

The payer/provider-owned companies also have an advantage in that they have a captive market with their payer/provider owners. For example, Conifer Health is estimated to have generated approximately 80% of its 2015 and 2016 revenues from its two owners, Tenet Health and Catholic Health Initiatives. Optum generates a significant proportion of its revenues from its payer-owner UnitedHealth Group. However, payer/provider-owned companies will need to implement strategies to expand beyond their owner companies if they wish to maintain their positions in the PHM market, a process that is already well underway. For example, Optum’s purchase of Humedica and the subsequent development of its provider-focused Optum One solution, has enabled it to grow its business beyond UnitedHealth Group, and other payers, and develop a strong provider-focused PHM business.

Ability to Scale Business

For those vendors not in the EHR vendor or payer/provider-owned groups there is still a great opportunity to drive success and build share in the PHM market. However, as the market starts to mature it is forecast to consolidate in terms of the number of suppliers addressing the market.

Companies such as Philips Healthcare, GE Healthcare and IBM Watson Health have the scale and, for most, the legacy customer base to drive success in the PHM market. Both IBM Watson Health and Philips have gained PHM market share via acquisition. GE Healthcare is well positioned, through its ownership of Caradigm, to address the acute/enterprise-focused PHM market. To date, GE Healthcare has not yet leveraged its Centricity ambulatory EHR customer base. However, it will start to address this during 2017 as its ambulatory PHM offering (Project Northstar) is commercialised.

Of the specialists, vendors such as Orion Health, Health Catalyst and Evolent Health have gained significant market share which they can leverage to support product innovation in order to grow their PHM businesses. Assuming though that profitable business models can be maintained and/or established (with some doing better than others on this front).

Further consolidation within the PHM industry is expected over the coming years and some of the smaller specialist vendors are expected to disappear, either through mergers, acquisitions or market exit. That being said, Signify Research does see opportunities for the more innovative amongst the smaller vendors to succeed. Particularly those that have developed strengths in specific areas (e.g. patient engagement platforms or analytics) and have the potential to partner with the larger vendors looking to address the full PHM platform market.

Market Shares in 2016

The dominance of the EHR vendors and payer/provider-owned vendors is illustrated well in terms of overall market shares in 2016. Optum was estimated to be the overall leader, with a share of 12%. This was followed by IBM Watson Health taking an estimated 9% of the market. Allscripts, Cerner and Conifer Health followed with estimated shares of 6%, 5% and 5% respectively. Evolent Health is estimated to have gained the most in terms of share during 2016, partly owing to organic growth, but also boosted via its acquisition of Valence Health. Speculation has been abundant in recent weeks regarding a potential merger between Evolent Health and the Advisory Board (which already owns part of Evolent). Should this merger take place the company is well positioned to break into the top five ranking illustrated below.

New Market Report from Signify Research

The market data presented above is taken from Signify Research’s just published report on the North American PHM market. The report is a component of the Signify Research “PHM & Telehealth Market Intelligence Service”. Vendors tracked include Aetna, Allscripts, AthenaHealth, AxisPoint Health, Caradigm, Cerner, Conifer Health, eClinicalWorks, Enli, Epic, Evolent, HealthCatalyst, Humana/Transcend Insights, IBM Watson Health, McKesson, Medecision, Meditech, NextGen, Optum, Orion Health, Premier Inc., Verscend, ZeOemga and others. The report provides quarterly market estimates for 2015 & 2016, and annual forecasts by vertical, function, service type, platform delivery and country to 2021.

For further details please click here or contact Alex.Green@signifyresearch.net.

Hyland Software Snaps Up Lexmark Perceptive

Hyland Software Snaps Up Lexmark Perceptive

Written by Steve Holloway

  • Thoma Bravo (private equity owner of Hyland Software) has agreed terms to acquire the Lexmark International Enterprise Software business (Kofax and ReadSoft business)
  • Hyland Software itself will then acquire the Lexmark Perceptive Software business. This includes the Perceptive Intelligent Capture, Acuo VNA, PACSGEAR and Enterprise Medical Image Viewing (originally Claron Technology)  product lines
  • The deal is expected to close in Q3 2017 for an estimated $1.5B, with Hyland Perceptive deal to follow.

Here’s our analysis of the deal, likely outcomes and what this will mean for the imaging IT and clinical ECM market:

Powerhouse of Health Data Management?

Focusing on the Lexmark Perceptive Software deal, the main attraction for Hyland will be gaining a share in the imaging IT archiving and management market. Lexmark Perceptive is one of the top three vendors by revenue globally in this market, driven predominantly by its past acquisitions of Acuo (VNA) and PACSGEAR (image exchange  and connectivity solutions), along with multiple others in viewing and workflow technology. Hyland OnBase originally launched its own VNA product competing against the Lexmark Perceptive Acuo VNA in early 2015, though it only holds a small base of customers today.

While the Lexmark-Perceptive Software business is smaller by revenue compared to the Enterprise Software deal (Kofax-ReadSoft), it does have strategic importance for Hyland. To date, barring Lexmark Perceptive , there is no other vendor that has the in-house capability to provide large-scale clinical content management and archiving technology (e.g. VNA, image exchange , workflow tools and enterprise viewing), alongside enterprise content management (ECM) for clinical, administrative and financial information management and storage. Instead, each market has remained distinct; ECM vendors have catered for non-clinical administrative and finance data, usually partnering with EMR vendors, while imaging IT vendors, health care technology vendors and a small group of independent companies have catered for clinical data management and imaging.

Therefore, the new Hyland-Lexmark-Perceptive partnership offers a potential edge over the other major clinical and non-clinical enterprise IT giants, such as IBM, GE Healthcare and EMC, by offering a complete content application layer for management of all health care related data.

Not Without Risk

While the strategic move from Hyland is clear, the operational juggling required to make it happen will be an arduous task with many challenges. The Lexmark Perceptive business was created by combining nine different businesses, which have been pieced together, with limited success, over the last five years. The acquisition of Lexmark Perceptive in November 2016 by a Chinese investment consortium also resulted in many key personnel from the original business jumping ship to competitors.

The approach of each partner in this deal has also been markedly different to date. Lexmark Perceptive has been most successful in winning large enterprise deals requiring complex customised solutions. Albeit with little evidence of a coherent strategy combining the clinical archiving business together with the Perceptive ECM business line. In contrast, Hyland has a strong reputation as an ECM vendor, catering mostly to Epic Systems EMR customers, which has been leveraged to expand into clinical content with its OnBase VNA. Hyland also has little experience in interfacing and replacing legacy clinical IT systems.

From a geographical perspective, both businesses have some commonality, with a vast proportion of their installed base being in the US. Lexmark Perceptive has also branched out internationally in the UK, Nordics and Asia Pacific region, though opportunities for large enterprise clinical content management deals are less common. Hyland has an almost exclusive US-based customer list, again driven mostly from providing ECM to support customers with an Epic Systems EMR. From a non-US perspective, adoption of large enterprise EMR akin to that seen in the US in the last five years, is weak. Instead, these markets are heavily dominated by health care technology firms for clinical data management and the large multinational ECM businesses. Consequently, non-US market penetration for the combined Hyland-Lexmark-Perceptive business will be a significant challenge given current experience and capability.

The Bigger Picture

Vendors from both the clinical and non-clinical data management market sectors will be watching the outcome of this deal closely. To date there has been little appetite, or market-available solutions, for health care providers to fully integrate data management capabilities across clinical and non-clinical segments.

However, interoperability has been a hot topic in health care IT for the past few years, in improving interfacing of systems both within and between provider networks. This has been further exacerbated by new focus on population health management and the emerging use of artificial intelligence in health care, both of which require providers to develop a more federated and accessible approach to management and storage of health care data.

If the expected combined clinical and non-clinical solution from the new Hyland-Lexmark-Perceptive provides significant commercial success, there is no doubt the wider market will react, ramping up merger and acquisition activity, especially from non-clinical enterprise ECM vendors looking for clinical data management expertise. Moreover, it would also start a ding-dong battle  for market leadership of “content application” platforms that will act as the supporting layer to all health care providers’ software. Watch this space.

20% of North American PHM Market is “Captive”

20% of North American PHM Market is “Captive”

Written by Alex Green

  • Signify Research preliminary analysis and commentary on the North American Population Health Management IT Market, which includes data for the quarter ending December 2016
  • 20% of North American PHM market in 2016 is accounted for by vendors supplying their own owners with solutions
  • Optum, Healthagen, Medicity, ActiveHealth Management, Transcend Insights, Conifer Health, Medecision – all have owners who are also customers

Analysis

According to preliminary data from Signify Research’s report “Population Health Management IT – North America – 2017”, 20% of the North American PHM market is effectively locked out to competition as it is served by vendors supplying their owners with PHM solutions – i.e. it’s a captive market.

Many of the leading vendors of PHM software solutions are owned by major payer or provider organisations, who then purchase PHM products and services from their subsidiaries. In some circumstances these payers or providers were initially responsible for developing the PHM solutions offered and once successful, commercialised the products by establishing new operating companies or brands. There are also several examples of payers or providers acquiring vendors that had already developed successful PHM solutions and then ultimately becoming customers of these acquired companies.

The leading vendors that are driving this captive 20%, along with an overview of their businesses, are outlined below.

Optum

Optum, the market leader in terms of PHM IT revenues in North America, is owned by US payer UnitedHealthcare and is one of the companies that makes up the largest share of the captive market.

United is Optum’s largest customer across its entire portfolio. In 2016 Optum Insight, Optum’s health care technology business segment, generated more than 50% of its $9B sales via internal business. Specific to PHM, in 2016 United was a major customer for Optum’s payer-centric PHM solutions, such as Optum Impact Intelligence, Optum Impact Pro and Optum Symmetry.

Optum has also started to bolster its non-UnitedHealthcare business; in particular it has increased the share of its business that is driven by providers as opposed to payers. Its acquisition of Humedica in 2013 and the subsequent launch of its provider-focused PHM solution Optum One being the main enabler. As sales of this solution have ramped up, the share of the overall Optum PHM business generated by UnitedHealthcare has started to fall.

Conifer Health Solutions

From a leading payer-owned example to a leading provider-owned example – Conifer Health Solutions offers a broad range of provider-focused PHM solutions via its ConiferCore portfolio of products. It is estimated to have commanded a top five market share position in North America in 2016 (based on Signify Research preliminary market estimates).

Conifer Health Solutions is the principal operating subsidiary of Conifer, which is majority owned by the US health provider Tenet Healthcare. Further, US provider Catholic Health Initiatives (CHI) also holds a 23.8% ownership position in Conifer Health Solutions.

Tenet alone accounted for 37% of Conifer’s sales (all products) in 2016. Across both Tenet and CHI, the figure was between 75% and 80% in 2015 and 2016. These figures relate to business across all Conifer’s products, but its PHM business is also very much focused around Conifer Health’s two owners.

Healthagen

US payer Aetna has developed a broad PHM portfolio via several acquisitions over recent years. In 2005 Aetna acquired ActiveHealth Management for a reported $400M. ActiveHealth Management provided medical management and data analytics solutions at the time. In 2011, it completed the acquisition of Medicity, a provider of Health Information Exchange (HIE) solutions for $500M.  Finally, in 2011, Aetna acquired Healthagen, at the time best known for developing the mobile symptom checking app iTriage. In 2013 Aetna consolidated all its PHM- products obtained via these acquisitions under the Healthagen brand.

Although Aetna is estimated to drive some internal business for Healthagen, unlike the previous two examples of Optum and Conifer, the internal business generated from Aetna is estimated to be relatively small.

Transcend Insights

A similar picture exists for Transcend Insights. As with the Healthagen brand, the Transcend Insights brand reflects the PHM offerings of another major US payer, namely Humana (until recently, itself in merger discussions with Aetna).

Transcend Insights was formed in March 2015 after Humana brought the businesses of its subsidiaries Certify Data Systems, Anvita Health and nLiven Systems together under one brand.

The combined entity is a top 10 vendor in terms of 2016 PHM market share and it addresses the PHM market via its HealthLogix portfolio. Humana is estimated to have been a significant customer for Transcend Insight’s PHM products in 2016.

Other Examples

Several other companies also contribute towards this 20% figure, such as Medecision which is owned by one of its largest clients, US payer Health Care Services Corporation (HCSC).

There are also examples of provider/payer-owned vendors where the owner relationship isn’t defined as customer/client. For example, Evolent Health, which addresses the PHM market via its Identifi portfolio, is part-owned by Pittsburgh-based provider UPMC. However, much of Evolent’s portfolio is based on IP developed by UPMC. In this set up, Evolent acts as a reseller of UPMC technology, rather than a supplier to UPMC.

That said, Evolent does contribute toward this captive market in other ways. Since February 2016 one of its top three customers, Passport Health Plan, owns a sizable share in Evolent. Passport Health drove 20% Evolent’s overall business in 2016.

Premier Inc, is also technically part-owned by its customers but the business is very different to the other vendors discussed in this section. It has been a publicly-traded company since its IPO in September 2013; however, at the end of 2016 64% of the company equity was held by its members which comprised its customers. This includes 3,750 hospitals/130,000 providers making the company technically a provider-owned business. However, unlike the others listed in this section it is not owned by one provider, but many, and the vendor/client relationships are very different to the other examples. For this reason, Premier’s business has not been included in the 20% captive market figure.

Steady Decline in ‘Captive’ Share of the Market

The share of the market represented by companies selling to their owners (or in some cases owned subsidiaries) is forecast to fall over the coming years. For the companies involved, although their internal business is forecast to grow, the share of business generated by external customers is forecast to grow faster. This, coupled with the growing PHM businesses of other vendors that don’t have internal customers, results in the captive share of the market falling to less than 10% by 2021.

New Market Report from Signify Research Publishing Soon

The market data presented above are the preliminary estimates and forecasts from Signify Research’s upcoming report on the North American PHM market which will be published in April. The report is a component of the Signify Research “PHM & Telehealth Market Intelligence Service”. Vendors tracked include Aetna, Allscripts, AthenaHealth, AxisPoint Health, Caradigm, Cerner, Conifer Health, eClinicalWorks, Enli, Epic, Evolent, HealthCatalyst, Humana/Transcend Insights, IBM Watson Health, McKesson, Medecision, Meditech, NextGen, Optum, Orion Health, Premier Inc., Verscend, ZeOmega and others. The report provides quarterly market estimates for 2015 & 2016, and annual forecasts by vertical, function, service type, platform delivery and country to 2021.

For further details please click here or contact Alex.Green@signifyresearch.net.

5 Key Issues for Cloud Adoption in Clinical IT

5 Key Issues for Cloud Adoption in Clinical IT

Written by Steve Holloway

Hype surrounding cloud solutions for clinical IT has ramped up in the last two years, buoyed by user demand for more flexible data access and connectivity. However, global market adoption of cloud technology for clinical IT to date has been relatively slow, despite the increased marketing efforts of healthcare technology vendors and the growing presence of cloud technology platform vendors in healthcare, such as Microsoft (Azure) and Amazon (AWS).

So why is market penetration so low when cloud IT is big business in other sectors? And what are the key factors in cloud adoption for healthcare?

1. Each provider implementation is unique

No two clinical IT implementations are the same and no single software solution can address every provider’s needs. Scale, complexity of existing infrastructure, variety of user groups and interfaces and differing needs for mobility and connectivity all impact the effectiveness of clinical IT implementations. Therefore, the one-size-fits-all approach rarely works.

This complexity also impacts IT architecture selection: some provider organisations already own and maintain extensive IT data warehouses, so are unwilling to use third-party solutions when they can host their own private cloud. Others have complicated legacy networks of disparate clinical IT solutions across multiple locations, requiring flexile, multi-faceted cloud IT solutions. Smaller providers have limited resources for IT administration and so require full third-party managed service cloud solutions.

This variance of need makes it very difficult for providers and vendors alike. For providers, it is challenging to find case study examples of past implementations with similar profiles to learn from, especially as cloud IT is relatively new for healthcare. For vendors, it’s difficult to know which market segments and regions to target and which product lines to “cloud-enable”, without spending extensive time understanding the nuances of their customers’ unique needs, not to mention the dizzying amount of red-tape from local, regional, national and international regulations (see number 3).

2. Providers often misconceive cloud is less expensive

Whether fully hosted or hybrid architecture, it is rare for cloud IT implementations to be less expensive than on-premise solutions, though this is a common misconception amongst buyers.

Some cloud solutions are offered with a subscription-based managed service pricing model which can be misunderstood as less expensive relative to an up-front purchasing model. However, cloud solutions for clinical IT can be up to a third more expensive, depending of course on the unique needs of the provider. The complexity of most providers’ health networks and multi-faceted interfacing also adds significant financial risk to new implementations, for providers and vendors alike.

The relative infancy of cloud implementation also means there are few long-term case studies outlining the cost benefits of cloud for clinical IT. Vendors should be doing more to partner with early-adopters to better profile the wider benefits that cloud IT enables (mobile and remote access, workflow efficiency, reduction in IT administration). In doing so, providers will be able to better understand if a true return on investment (ROI) is possible.

3. Security and legislation is a moving target

Barely a day goes by without news headlines announcing the unsolicited release of sensitive patient health data, be it from malicious hacking or accidental release. Cybersecurity has therefore become a leading issue and challenge for healthcare providers, both to satisfy patients and adhere to the increasingly complex array of cybersecurity and compliance legislation. For larger providers with regional, national or international footprints, this is even more challenging, as each has its own “flavour” of regulation and each is evolving as legislators catch-up with new types of cyber threat.

This creates a challenging environment for selling cloud IT products, even if they are proven to be more secure than the provider’s current on-premise architecture. Large health providers are particularly sensitive to patient data security, as a major breach could be costly both from a financial and legal perspective, not to mention losing patient trust.

While many strategies exist to overcome these issues, vendors must fundamentally build customer-confidence in their adherence to the most up-to-date legislation and security protocols, provide certified examples and statistics on their cybersecurity record and be willing to work long-term with their customers on transitioning to cloud. Risk-averse providers are more willing to adopt cloud IT in a step-wise approach, such as off-loading second copy data and disaster recovery back-up in a hybrid cloud architecture as a first phase trial. Once the benefits from a financial, administration and security perspective have been proven, they will be more willing to expand cloud technology implementation.

4. Enterprise EMR is not an adoption precursor, but it helps

From a global perspective, adoption of cloud technology for clinical IT is relatively low compared to other industry sectors. It has however, been closely linked to markets where enterprise EMR implementation has been significant, such as the USA, the Nordics, the Netherlands and Singapore. There is no technical reason for this trend – cloud technology can in theory be deployed in any market with the necessary base infrastructure.

Instead, it is more to do with the impact made by digitalising core patient information with enterprise EMR. The mere existence of a basic centralised EMR spurs greater administrative and clinical focus on improving interoperability and connectivity of health data, both within network and intra-network. Moreover, EMR has commonly provided the initial interconnectivity of patient and data to drive momentum for implementation of value-based care models. As many of these models exploit and demand patient-payer-provider interconnectivity across a variety of access nodes, cloud technology adoption consequently increases.

5. Health data is the new currency

The value of health data is also changing, especially due to recent market development and focus on predictive analytics and artificial intelligence. While the question of who should “own” patient data is a complex and ethical one that far outstrips the remit of this piece, the increasing importance of patient data as a commodity to fuel new healthcare IT solutions, such as risk stratification analytics for phm or new care management workflows, is quickly becoming evident to provider, vendors and patients-alike.

Hybrid or hosted cloud technology solutions can be viewed by some providers as “losing control” or “ownership” of their data, despite the many contractual safeguards available. This view has also intensified with the advent of artificial intelligence, as providers also see the mid-term revenue potential of licensing use of their data to train machine learning algorithms.

While this is still a relatively new development, providers, healthtech vendors and cloud IT platform vendors are already acutely aware of the potential commercial gains to be made from pooling patient data, making adoption of cloud technology even more complicated.

New Service from Signify Research: Clinical Content Management IT – 2017
This and other issues will be explored in full in Signify Research’s upcoming intelligence service ‘Clinical Content Management IT – World, with first delieverable due in April 2017. For further details please click here or contact steve.holloway@signifyresearch.net

Target Applications for Machine Learning in Medical Imaging

Target Applications for Machine Learning in Medical Imaging

Written by Simon Harris

Rapid advancements in machine learning, most notably deep learning techniques, are fuelling renewed growth for medical image analysis software tools. We estimate that the global market1 for these products will be worth nearly $300 million this year and will more than double in size by 2021.  But which clinical applications are driving this growth?

Breast is Best

Breast imaging was the largest category in 2016, accounting for just over one-quarter of the total market. The breast imaging market mainly comprises computer-aided detection (CADe) solutions, such as iCAD’s SecondLook and Hologic’s ImageChecker, for the US breast cancer screening market, along with quantitative image analysis software for diagnosis applications, such as Invivo’s DynaCAD Breast and QLAB Suite from Philips Healthcare.

The market for image analysis tools in breast imaging is forecast to grow at a slower rate than the other applications, as the well-established CADe market in the US is now saturated. The main growth drivers will be:

  • CADe upgrades as imaging centres replace 2D mammography systems with digital breast tomosynthesis
  • Wider acceptance of CADe outside of the US
  • The increasing use of ultrasound (with CADe) in breast cancer screening
  • Uptake of new solutions such as breast density analysis software and decision support tools (e.g. MammoRisk from Statlife)

Cardiology Still Pumping

The cardiology market for image analysis software solely comprises quantitative imaging tools2, which are typically sold as applications for advanced visualisation platforms. These tools provide automatic calculation of various cardiovascular metrics, such as stroke volume, ejection fraction and arterial calcification. Growth will be driven by an accelerated pace of innovation from the use of deep learning algorithms and the resulting introduction of innovative solutions that address unmet market needs. In the mid-term, growth will be boosted by the introduction of decision support tools that provide predictive analytics for risk stratification and computer-aided diagnosis (CADx) systems that facilitate early detection of cardiovascular disease. For example, healthbit’s heartcare™ uses machine learning algorithms to predict congestive heart failure based on cardiac MRI scans.

Deep Breathing

Lung cancer is the leading cause of cancer-related death worldwide, and in response, many countries have introduced lung cancer screening programmes. This is driving demand for CADe solutions, although a lack of reimbursement prohibits more widespread uptake. Early generation CADe solutions based on shallow machine learning suffered from high false positive rates. Deep learning solutions promise improved detection accuracy, which should increase the usability of lung CADe and accelerate demand.

There is also a sizeable and growing market for quantitative image analysis tools for pulmonology applications, that provide characteristics of abnormalities such as size, texture, location, rate of growth, etc. These imaging biomarkers may be useful for predicting prognosis and therapeutic response. As was the case for breast imaging and cardiology, there is also an emerging market for pulmonology decision support tools that combine quantitative imaging with other patient information to provide a data rich, longitudinal history of the patient’s care. An example is the QIDS platform from HealthMyne.

A Head Start in Neurology

Brain scans are the most common type of MRI procedure and accounted for around one-quarter of the 34 million MRI exams performed in the US last year. There is already an established market for quantitative imaging software in neurology, primarily for tools that provide visualisation and quantification of blood perfusion in the brain. Additional growth will come from research into the use of imaging biomarkers for the diagnosis and management of neurological disorders, such as Alzheimer’s disease, multiple sclerosis and Parkinson’s disease.

Growth will be boosted by the introduction of CADe solutions to detect intracranial haemorrhage (ICH) from head CT scans. vRAD and MedyMatch have developed real-time ICH detection tools and both are expected to fully commercialise their solutions in 2017, pending regulatory approval. Teleradiology companies are expected to be the early adopters, particularly in the US as most CT scans ordered by emergency department are interpreted by teleradiologists.

Best of the Rest

The gastroenterology and urology markets for image analysis software were estimated to be similar in size and are forecast to grow at similar CAGRs over the coming years. The gastroenterology market comprises a mix of quantitative tools for analysis of the colon, pancreas and liver and CADe solutions for the detection of colorectal cancer, the third leading cause of cancer death in the US. Colonoscopy remains the gold standard in colon cancer screening, but CT colonography (CTC) is gaining acceptance. However, a lack of reimbursement (CMS does not pay for the use of CTC in colon screening) has hampered the uptake of CTC. The urology market solely comprises quantitative imaging tools, primarily for prostate analysis.

Footnotes

1 The image analysis software market comprises computer-aided detection (CADe) systems, quantitative image analysis tools, decision support tools and computer-aided diagnosis (CADx) systems. A full list of the products included is available on request.
 2 The quantitative image analysis tools category includes all software products that provide automatic quantification of anatomical features, not just those that use machine learning. Products that use other image analysis techniques, such as a statistical model-based approach, are also included.

Related Reports

Machine Learning in Medical Imaging – 2017 Edition” provides a data-centric and global outlook on the current and projected uptake of machine learning in medical imaging. The report blends primary data collected from in-depth interviews with healthcare professionals and technology vendors, to provide a balanced and objective view of the market. If you would like further information please contact Simon.Harris@signifyresearch.net.

How to Sell Machine Learning Algorithms to Healthcare Providers

How to Sell Machine Learning Algorithms to Healthcare Providers

Written by Simon Harris

One of the greatest commercial challenges for developers of medical image analysis algorithms is how to take their products to market. Most independent software vendors (ISVs) of image analysis solutions only offer a handful of algorithms for specific use-cases, e.g. coronary calcium scoring, bone age prediction, detection of lung nodules, etc. However, most generalist radiologists require a comprehensive “analytical tool kit” with a broad portfolio of algorithms that can detect a wide range of conditions for multiple body sites and across multiple modalities. Locating, evaluating and sourcing image analysis algorithms on a piecemeal basis from multiple vendors will be a cumbersome and time consuming process for healthcare providers. Not to mention the challenges associated with integrating the algorithms with the providers’ existing healthcare IT infrastructure. Whilst this may be a viable option for the larger academic hospitals and IDNs, most providers will not have the necessary resources for this and instead will prefer to deal with a small number of vendors, and ideally a single supplier.

There are several routes to market for image analysis ISVs, as follows:

  1. Develop an in-house image analysis workstation or platform (proprietary or open)
  2. Partner with established imaging IT companies, e.g. PACS, viewer and advanced visualisation companies
  3. Partner with modality companies
  4. Partner with healthcare ecosystem (open platform) providers
  5. Partner with companies who provide vendor agnostic image analysis platforms

The advantages and disadvantages of each, as viewed through the lens of algorithm developers, are presented below.

1. Develop an in-house image analysis platform

Examples: iCAD PowerLook Advanced Mammography Platform (AMP), RADLogics AlphaPoint™, HealthMyne QIDS
Advantages: A viable option for specific clinical applications, e.g. breast and lung cancer screening. Solutions can be highly customised for specific customer types, e.g. breast imaging specialists. Full control of the development roadmap.
Disadvantages: Limited choice of algorithms for general radiology. High product development, marketing and sales costs.

2. Partner with established imaging IT companies

Examples: Most of the major PACS and advanced visualisation companies offer clinical applications from third party vendors, alongside their in-house applications. For example, GE offers over 50 clinical applications for its AW advanced visualisation platform, some of which are licensed from third party developers.
Advantages: Access to an established customer base. Tight integration with partner’s imaging IT platform. Partnering with a well-known brand may add credibility by association. Leverage the partner’s sales and marketing efforts.
Disadvantages: The imaging IT market is fragmented – being tied to a specific vendor(s) gives access to only a fraction of the total available market. The Imaging IT market is evolving from departmental PACS to enterprise imaging solutions, creating uncertainty and complexity in the marketplace.

3. Partner with modality companies

Examples: Arterys has a non-exclusive, co-marketing agreement with GE Healthcare, whereby Arterys 4D Flow is available via the ViosWorks application for GE MRI scanners.
Advantages: Access to an established customer base. Credibility by association. Leverage partner’s sales and marketing efforts. Access to “raw data” direct from the modality may improve accuracy of algorithms.
Disadvantages: Doesn’t give access to the total market, although the modality markets are more consolidated than Imaging IT. For example, the MRI market is largely controlled by an oligopoly of 5 companies – Siemens, GE, Philips, Toshiba and Hitachi. Long sales cycles. Modality companies are likely to embed a small number of algorithms rather than a full suite, which will limit the available market.

4) Partner with healthcare ecosystem (open platform) providers

Examples: GE Health Cloud (features applications from Arterys, Pie Medical Imaging and imbio, to name a few), IBM Watson Health Core (recently added an application from MedyMatch that detects intracranial bleeds on CT scans), NTT DATA Unified Clinical Archive (offers analytical solutions from imbio, Zebra Medical Vision and AnatomyWorks), Siemens Healthineers Digital Ecosystem (announced at HIMSS 2017 with Arterys, SyntheticMR and a handful of others having already agreed to provide applications).
Advantages: Widest choice of algorithms. Major focus of investment by the major healthcare technology vendors (GE plans to invest $500m over the next three years in its Health Cloud platform). Access to the platform developer’s installed base of customers. Credibility by association. Leverage the platform developer’s sales and marketing efforts.
Disadvantages: Some resistance from healthcare providers to cloud-based platforms, often due to data compliance requirements. Ecosystem platforms are a relatively new and unproven concept in medical imaging and currently there are relatively few healthcare providers using them.

5) Partner with companies who provide dedicated, vendor agnostic image analysis platforms

Examples: Medimsight offers a cloud-based computer-aided diagnosis marketplace for biomarker quantification. The platform features 39 applications, including algorithms from LAIMBIO, FMRIB (Oxford Centre for Functional MRI of the Brain) and Martinos Center for Biomedical Imaging.  Blackford Analysis offers a vendor-neutral pre-processing (VNP) platform that acts as a broker for pre-processing algorithmic solutions from third party developers, to enable integration with existing clinician workflows. McCoy Medical is a distribution partner / sales channel for companies who make algorithms and analytics.
Advantages: Support with integration reduces the need for PACS back-end engineering. A highly focused marketplace for image analysis solutions.
Disadvantages: The developers of dedicated, vendor agnostic image analysis platforms are small companies with limited resources and few customers. Strong competition from healthcare ecosystem providers (see 4 above).

The Signify View

In the short-term we expect image analysis ISVs to focus on developing their own platforms and to seek partnerships with established imaging IT vendors. However, with the major healthcare technology vendors investing heavily in their healthcare ecosystem platforms, these new “clinical application marketplaces” look set to be an increasingly important sales channel in the coming years. The single platform model greatly simplifies purchasing and workflow integration for healthcare providers and gives radiologists access to the widest selection of algorithms to build their “analytical tool kits”.

Related Reports

Machine Learning in Medical Imaging – 2017 Edition” provides a data-centric and global outlook on the current and projected uptake of machine learning in medical imaging. The report blends primary data collected from in-depth interviews with healthcare professionals and technology vendors, to provide a balanced and objective view of the market. If you would like further information please contact Simon.Harris@signifyresearch.net.

Is $500M Enough? GE Healthcare’s Investment in Digital Health

Is $500M Enough? The Signify View on GE Healthcare’s Investment in Digital Health

Written by Steve Holloway

  • Late last week, the CEO of GE Healthcare announced a plan to invest $500M in the division.
  • Investment will take place over the next 3 years.
  • It will be used to recruit 5,000 software engineers, data analysts and imaging analysts.
  • Some funding may also be used to fuel acquisition of data analytics firm(s).
  • Focus to develop Health Cloud platform (announced November 2015) and hundreds of clinical software applications.
  • Platform will be driven by GE’s Predix operating system.
  • Germany highlighted as a key target market for GE.

The recent announcement from GE Healthcare on plans to invest $500M on 5,000 software engineers and potential acquisition of a software analytics firm is no great surprise but excellent PR. The firm announced in late 2015 their “Health Cloud” platform to great fanfare, but little progress has been evident to date. However, GE has been making it very clear publicly that it plans to transition the industrial conglomerate into a “digital” firm, fueled by its Predix industrial platform.

Here’s the Signify View on the announcement:

Battle Lines Drawn

The size and scale of the announcement is significant for GE Healthcare, one of the leading global healthtech firms with $18.4B of revenue in 2016. However, it is by no means the biggest move in healthcare of late.

IBM’s entry into the healthcare field, investing over $4B in Merge Healthcare ($1B) Truven Analytics ($2.6B), Explorys and Phytel (not disclosed, but estimated to exceed $400M) has been very aggressive, not to mention the serious investment IBM has made in recruiting healthcare leadership and marketing spend for its IBM Watson Health business.

Other major competitors are also making big moves. Siemens plans to take its newly branded “Healthineers” division through an IPO later this year, while Philips has re-focused the company on health and wellbeing markets, having divested its lighting division, Philips Lighting, in 2016. Other global technology giants have also been lining up the healthcare sector; Google (Deepmind), Amazon, Salesforce and NTT Data have also made a big push for healthcare market share. Therefore, GE was always going to need to invest heavily to compete.

Digital Deutschland?

The orchestrated announcement was made to a German media outlet (Handsblatt), for good reason. GE has for some time been lining up the German market. While aiming for Europe’s largest market may seem a sensible move, it will not be straightforward, especially when it comes to Healthcare IT:

  • Germany is one of the most price sensitive markets for healthcare technology in Europe; procurement prices are regularly 30-50% lower than the Western European average
  • The health IT market in Germany is highly fragmented. In Imaging IT alone there are approximately 30 local vendors and integrators working with a complex and fragmented provider network, especially in the private and administrative sectors
  • There has been little if any national or regional co-ordination of health IT in Germany to date. While the market is therefore under-penetrated for Health IT in relation to European peers, consolidation of the market to larger, more profitable enterprise networks will be challenging, bureaucratic and long-winded

In Germany, GE Healthcare does have considerable experience and past success in health IT with smaller ambulatory practice management software. This will certainly help in catering for the market, as will a sizeable installed base of imaging and clinical care hardware in Germany and surrounding markets. That said, attaining a commanding share of the multi-billion dollar German healthtech market could be far from straightforward against a mix of large incumbent multinationals (Siemens, AGFA Healthcare) and a multitude of small private vendors. Add to this economic concern and political uncertainty over the future of the European Union and GE’s strategy looks increasingly risky.

ACE Platform or Bust

GE is also not alone in its bid to position itself as a central platform provider. Philips, Siemens, NTT Data and IBM are all making a similar play. The move from these vendors is hardly surprising – enterprise EHR vendors have done little to establish any real expertise in best-of-breed clinical IT or imaging IT software to date.

For GE Healthcare, Philips Healthcare and Siemens Healthineers, leveraging their clinical expertise and modality hardware footprint to expand the breadth of their clinical IT offerings, including analytics, dashboarding, integrated workflow and even population health and telehealth capability, is a natural progression. These new solutions, that Signify Research has termed Agnostic Clinical Enterprise (ACE) platforms, look set to be the foundation for future cross-discipline implementations. In adopting the ACE platform model, there are many benefits for providers and vendors alike. The single ACE platform model allows the vendor to become embedded in the provider’s core clinical workflow and care management, while also putting themselves in prime position to win long-term, managed service deals, including imaging hardware, clinical care device supply and lucrative professional services.

For providers, the ACE platform model offers a single vendor to deal with for clinical IT (“one-throat-to-choke”) and a partner to share the risk of previously capital-intensive procurement. Moreover, the ACE platform model will, over time, use the core platform vendor as a contractor. If the provider wants to bring in a new technology or software for a specific clinical function, the ACE platform vendor will have responsibility to sub-contract and integrate the new module into their platform. This will lead to greater choice for the provider in each clinical discipline.

With its competitors also making significant moves to establish ACE platforms and aggressive investment from IT and analytics industry giants, GE’s recent announcement really only offers one question: will $500m be enough?

New Service from Signify Research: Clinical Content Management IT – 2017
This and other issues will be explored in full in Signify Research’s upcoming intelligence service ‘Clinical Content Management IT – World, with first delieverable due in April 2017. For further details please click here or contact steve.holloway@signifyresearch.net

North American PHM Market Worth $1.01B in Q4 2016

North American PHM Market Worth $1.01B in Q4 2016

Written by Alex Green

  • Signify Research preliminary analysis and commentary on the North American Population Health Management IT Market (PHM Market), which includes data for the quarter ending December 2016
  • Q4 2016 population health management (PHM) market in North America remained buoyant despite uncertainty around US healthcare reform
  • Revenues of $1.01 billion were generated in Q4 2016, up 17% YoY and up 8% compared to previous quarter
  • PHM solution spending for FY2016 in North America was $3.7 billion, up 15% on 2015

Analysis

Signify Research’s preliminary market estimates for the Q4 2016 North American population health management (PHM) IT market (platforms and services) shows that despite the uncertainty caused by the US presidential election, and its potential ramifications for US healthcare policy, the market remained buoyant. PHM revenues for Q4 2016 in North America stood at an estimated $1.01 billion, up 17% on the same period in 2015 and up 8% on the previous quarter in 2016.

The continued growth in the fourth quarter does need to be put in context. The fall out of the presidential election result is unlikely to have had time to substantially affect sentiment to the point that immediate orders would have been impacted.  Fourth quarter has also traditionally been a seasonally strong quarter for leading vendors of PHM and related solutions.

The results are still very encouraging though. It is Signify Research’s view that the longer-term trend towards value-based care, the move to accountable care organisations (ACO) and the need to better manage health care spending in general will ultimately drive continued growth for vendors offering PHM solutions, despite legislative uncertainty.

Supplier Base Remains Fragmented

For the full year 2016, the North American PHM market was estimated to have been worth $3.7 billion, compared to $3.2 billion in 2015. The list of companies that drive these numbers remains long, and is indicative of the fact that the market, despite reaching a certain level of maturity, is still highly fragmented. However, several companies including Optum, IBM Watson Health, Cerner, Allscripts, Conifer Health and Evolent have started to take market leading positions in terms of share. Between them they are estimated to have accounted for approximately 45% of the 2016 market. Most still only command a single digit share in 2016, with a long list of vendors closely following.

Data Aggregation / Analytics / Stratification Driving Market to Date

Signify Research’s upcoming report segments the market in to three main components, data aggregation/analytics/risk stratification solutions, care coordination/management solutions and patient engagement solutions. Of the three, the data aggregation/analytics/risk stratification segment represented the largest market in 2016 and is projected to remain the largest for the report’s forecast period (2017-2021). Similarly, the provider vertical, specifically the acute provider sector, is also projected to remain the largest market channel compared with the payer, employer and other verticals.

Full Impact of Legislative Uncertainty Yet to be Felt

As indicated above, the real test of the impact of uncertainty in relation to potential changes in legislation will be in seen in market performance during the first half of 2017. Results for Q1 2017 will be eagerly awaited. Signify Research’s market update in the second half of 2017 will give an early indication on the level to which this uncertainty hits the revenues for PHM solution vendors in 2017. However, it’s our view that strong annual growth will continue in 2017, with the market projected to grow a further 16%.

New Market Report from Signify Research Publishing Soon

The market data presented above are the preliminary estimates and forecasts from Signify Research’s upcoming report on the North American PHM market which will be published in April. The report is a component of the Signify Research “PHM & Telehealth Market Intelligence Service”. Vendors tracked include Aetna, Allscripts, AthenaHealth, AxisPoint Health, Caradigm, Cerner, Conifer Health, eClinicalWorks, Enli, Epic, Evolent, HealthCatalyst, Humana/Transcend Insights, IBM Watson Health, McKesson, Medecision, Meditech, NextGen, Optum, Orion Health, Premier Inc., Verscend, ZeOmega and others. The report provides quarterly market estimates for 2015 & 2016, and annual forecasts by vertical, function, service type, platform delivery and country to 2021.

For further details please click here or contact Alex.Green@signifyresearch.net.

Market Impact of EMA decision on GBCAs

Walking a Gadolinium Tightrope of Perception & Bottom Line

The recommendation by the European Medicines Agency (EMA) on 10 March that market authorisation for four linear gadolinium contrast agents (GBCAs) be suspended shocked the radiology community, but very little has been said about this decision’s effect on businesses.

Supply of the agents in question is significant business for Bayer HealthCare Pharmaceuticals (Magnevist), GE Healthcare (Omniscan), Bracco (MultiHance), and Guerbet (Optimark), and Europe’s one of their largest and most mature marketplaces. So, what will be the market repercussions?

Fight or flight? It’s not all black and white

The information offered with the EMA announcement provides a few clues about how the market will react. However, it’s clear that a swift reversal of the recommendation and soon-expected EMA suspension is unlikely.

This is the opening extract of Steve’s regular monthly market column for AuntMinnie Europe.  

To read the full article, please click here.

(Access to the article may require free membership to AuntMinnie Europe – it’s full of great content and insight so well worth signing up!)