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RSNA Day Three: A Question of Perspective

December 3, 2008
by Mark Hagland
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In an imaging management vendor market facing industry change and economic uncertainty, what’s the best corporate configuration? Is it better to be a “combination” PACS/RIS vendor, one that encompasses both a “modality” component (meaning that the company manufactures CT, MRI, ultrasound, and other diagnostic imaging equipment) as well as IT products (meaning PACS and RIS)? Or is it better to be solely focused on the IT side?

Not surprisingly, in meetings at the RSNA Conference today, vendors in the former situation extolled the benefits of being able to offer modalities and information systems together in the current economic and purchasing environment, while those without modalities took an opposite view. Indeed, senior executives from two of the first type—the Amsterdam, Netherlands-based Royal Philips N.V., and the Barrington, Ill.-based GE Healthcare—emphasized in meetings today with Healthcare Informatics their distinctive advantages as comprehensive imaging and information providers; while those from the Alpharetta, Ga.-based McKesson Corporation, an example of a non-modality provider—offered very different perspectives.

Sybo Dijkstra, senior marketing director of Philips Healthcare Informatics (based in Andover, Mass.), told Healthcare Informatics that “You can find more effectiveness and efficiency in your radiology department in optimizing the care process; providing alerts is one example. Advanced use of information in all the individual steps of care in collaboration with alerts and communication tools, can make the radiology department more effective; that’s what will be happening in the coming years. You need to look at how it all works together—the modalities and the information systems—in order to optimize care and efficiency; that’s where the emphasis will be.” Dijkstra also cited the flexible, web-based service delivery model if Philips iSight system.

Just steps away, however, George Kovacs, director of product marketing for McKesson, said firmly, “The market is recognizing that buying modality-based departmental systems is simply not the way to go.” In fact, Kovacs said, “Those vendors that use IT as a loss-leader in order to sell modalities aren’t going to be successful in that strategy any longer. The reality,” he stated, “is that any radiology director worth their salt wouldn’t buy their CT and their MRI from the same vendor, because they actually need to put their vendors into a bidding war” in order to win out as a customer. “And that extends to modalities versus IT: you want a vendor that focuses on making your operations more efficient and not on sliding something in, in order to slide in another modality.” In fact, he contended, some of the modality-driven vendors are disadvantaging their positions in the market as IT vendors by trying too hard to use IT sales efforts to push modality sales.

Meanwhile, steps away, Cristine Kao, senior marketing managing imaging solutions/integrated IT solutions at the Barrington, Ill.-based GE Healthcare, said that the watch-phrase going forward is going to be “clinical value.” The fundamental question for all vendors on both sides of the product category divide, modalities and IT, she said, is this: “It’s about positioning your solutions to address specific needs in healthcare, such as cost control, quality improvement, and so on. And it takes continuing innovation to reinvent yourself in order to continue to provide the clinical value.”

Of course, things are far more complex than the question of “solely IT versus modalities-plus-IT” implies. One CIO we spoke with said she was very comfortable with her situation, in which her hospital system’s modalities, PACS, and EMR are all supplied by different vendors. But it will be very interesting to see how all this shakes out, particularly in a PACS/RIS market that in the U.S. and northern Europe has become primarily a replacement market (though the largest PACS vendors, at least those with international reach, including GE, Philips, and McKesson, are looking to sales growth in emerging markets to help offset any major U.S. sales downturn in the short run).

More worrisome, however, is the future of any number of smaller niche PACS and RIS vendors exhibiting at RSNA 2008. How many of those firms will be around a year from now? Two? Three? Several years from now? Sales executives at the largest companies aren’t hesitant in predicting the early demise of many of their smaller rivals. McKesson’s Kovacs, for one, was straightforward in declaring the era of the smaller niche vendor to be pretty much over.

But who can say? As RSNA 2008 moves toward its close, one can only speculate as to the near-term future of PACS, RIS, modality, and combination vendors across the industry. Certainly, it will be fascinating 12 months from now to look at the RSNA 2009 exhibitor list and compare it with this year’s.



You're right, CIOs are very tired of dealing with all the interfacing issues. On the other hand, many are also deeply wary of being too deeply tied to a single vendor. I'd be very interested in CIOs' thoughts on handling this dynamic tension.

My question is what are the challenges in integrating modalities and IT solutions from different vendors? What are the advantages of having both solutions from one vendor? I know CIOs are tired of dealing with interfaces and all the management and maintenance headaches they bring.

Thank you for your great explanation of these dynamics. It speaks perfectly to some of the competing impulses of the different types of vendors, those with modalities-plus-PACS/RIS, versus those with PACS/RIS "alone." I'd be very interested in any CIO readers' takes on the kinds of discussions they might be having of late with their vendors regarding all this.

Thank you for your excellent insights and perspectives. Do you believe there is any truth to the assertion being made by some PACS/RIS vendor companies that don't offer modalities, that the combination modality/IT vendors are primarily interested in continuing to sell modalities first and foremost, to the potential detriment of customer satisfaction with IT (meaning PACS/RIS)? I'd be interested in your view on this.

Also, a correction: I misspelled Philips' product, which is iSite, not iSight, as I had written. My apologies for the misspelling.

Hey Mark / Anthony...great posting...I think the issue or biggest questions are raised around EMR-RIS & PACS integration. Modality integration is mostly DICOM and usually straight forward. Most customers choose their imaging modalities based on reputation and the available features/functionality of the scanner or camera. I would say most buying decisions for modalities are made by Radiology managers or administrators while today's EMR-RIS & PACS purchases are more commonly made by IT leadership.

Integration issues often evolve during the implementation of a separate RIS & PACS. My choice would be for a tightly integrated RIS-PACS vendor who can remove the headaches of integrating inbound RIS registration and check-in processes with PACS and outbound messaging to image enable the RIS. If this vendor happens to sell imaging modalities then this is a possible bonus and you put the pricing squeeze on one vendor for RIS-PACS and their latest MR or CT. I say go with the single vendor when possible, I know it's old school but I'm big on vendor partnerships...Oh yeah don't forget to ask for a decent discount on a single source managed service agreement.

Mark — In the current economy combination modality vendors and IT vendors alike are focused on any and every possible source of revenue. Both sides will claim IT superiority to the CIO and ground breaking clinical advancement to the CMO. The bottom line is that the average MR or CT sale will bring in 2 to 3 times more revenue than a single PACS or RIS. With that said vendors who offer both RIS/ PACS products and imaging modalities are going to sell into their customer's immediate need then offer the other product(s) at a discount. For example the vendor will sell the customer a two million dollar MR scanner then greatly discount or even throw in a quarter of a million dollar PACS or vice versa to close the sale...non-modality vendors do the same thing with their many optional modules and administrative tool sets.

In regards to the IT satisfaction requirement both the combination vendors and the PACS only vendors are going to offer rolled in service and support with promises of five 9's uptime to gain further approval from the IT guys.