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Report: PACS Vendor Market Changing as Providers Consider Enterprise Imaging Approach

September 5, 2017
by Heather Landi
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The PACS (picture archiving and communications system software) market has changed significantly over the past few years—performance from historical PACS leaders has dropped, and newer entrants have begun to stand out and steadily expand into larger provider organizations, according to a new report from Orem, Utah-based consulting firm KLAS.

The KLAS report, “PACS 2017: Reconstructing for the Future,” also finds that enterprise imaging is changing the way providers think about vendors and future purchasing decisions. 

“In a market previously dominated by a few large players, small niche vendors are now beginning to stand out. Former leaders are struggling to meet expectations, mergers and acquisitions have introduced complications, and larger organizations are looking for PACS vendors that can meet their enterprise imaging expectations,” the KLAS researchers wrote.

“Since vendor performance and provider needs vary depending on organization size and type, the goal of the following sections is to highlight the highest- and lowest-performing vendors across three sizing breakouts—large hospitals, community hospitals, and imaging centers,” the repot authors wrote.

Drilling down into the vendor market, KLAS researchers noted that, according to KLAS’s evaluation scores, Sectra, INFINITT, Carestream, and McKesson are leading in PACS performance and are still solidifying their place in enterprise imaging.

“Providers note that all of these performance leaders will need to expand their experience and visibility outside of PACS in order to keep pace with vendors such as Agfa HealthCare, GE Healthcare, and Merge, who are better known for having enterprise imaging–focused approaches,” the KLAS researchers wrote in the report.

What’s more, KLAS found in its research that Merge customers (Merge PACS and DR Systems Unity PACS) are cautiously optimistic about the potential radiology uses for IBM’s AI technology and have not reported any disruption following IBM’s acquisition. “Customers are showing increased interest in Merge’s strong enterprise imaging strategy and are happy overall, with larger organizations being the most satisfied,” the report authors wrote. “Though some of Agfa HealthCare’s most dissatisfied IMPAX users have moved to other systems, Agfa HealthCare has maintained the customer experience for remaining IMPAX users while developing a new PACS as part of their enterprise imaging platform. This platform has piqued industry interest, and the handful of early adopters are optimistic about the future.”

KLAS researchers also noted that Siemens customers have not seen improvements to their PACS in recent years, and Siemens’ once-sizable market share has decreased considerably. GE Healthcare has struggled to deliver on promised integration and new technology for their PACS platforms, and customers of both platforms have experienced unresponsive support, KLAS reports. “As a result, GE Healthcare has lost a number of customers to other vendors. At the same time, GE Healthcare has been trying to redefine themselves in the emerging enterprise imaging market and is still often considered by providers for both PACS and enterprise imaging purchases.”

According to the report, Fujifilm and Philips have met providers’ needs for years with stable, easy-to-use PACS solutions, and both are still broadly considered. “However, customers have been left wishing for more innovation, citing frustrations around promised but undelivered functionality. The vendors’ plans for enterprise imaging may change this,” the report authors wrote.

The report notes that Fujifilm acquired TeraMedica a few years ago for their VNA, though providers still view the VNA solution as being independent from the PACS. Philips is developing an enterprise imaging platform from the ground up.

KLAS researchers also noted that as larger provider organizations continue to acquire smaller ones and move them to the larger organizations’ own PACS solutions, vendors who have traditionally catered to smaller providers will need to scale up to survive. "Sectra and INFINITT have seen the most success, while Intelerad, Novarad, Avreo, and CoActiv have yet to prove their scalability," the report authors wrote.

There have been significant declines in customer satisfaction with vendors Intelerad and Novarad, according to the report. Regarding Intelerad, KLAS researchers note the recent investment in Intelerad by private equity firm NOVACAP was a surprise to customers and was followed by a drop in satisfaction, "though performance overall is still relatively high." Currently, KLAS scores Intelerad's overall performance at 82.2, a B+.

The KLAS report also states that Novarad performs well in the community hospital space, but imaging centers report a drop in the stronger relationships and guidance typically needed by smaller organizations. These customers’ overall satisfaction has declined nearly 20 percent in recent years, according to the report. "The declining satisfaction of Intelerad and Novarad customers combined with the neglect felt by Merge’s smaller DR Systems customers means that imaging centers and community hospitals have fewer strong PACS options to choose from," the KLAS report authors wrote.

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