By Tom Watson

The information and metrics in this summary represent dynamic proprietary data collected from and analyzed for symplr Spend Capital Market Intelligence customers. The depth and breadth of this customer base gives our advisors — industry leaders who provide unbiased, fact-driven data for market trends, vendor solutions, pricing, and support — access to an unparalleled database. These dedicated clinical spend advisors have experience in many areas of diagnostic and therapeutic medical capital technology and markets. They empower customers to make better-informed business, financial, and clinical decisions about capital equipment purchases.

Overview
The overall capital purchasing patterns have changed significantly over the past five years. The data collected and formally analyzed historically has been an excellent representation of the overall, primary healthcare provider mindset regarding medical technology purchase considerations. Using 2018 as the last clear baseline since the COVID-19 pandemic, today we see that the imaging market overall reflects a level of purchasing consideration that is approximately 85% of pre-pandemic capital buying patterns. Based on customer request activity, analyses reflect ranges of pre-pandemic to current capital activity ranging from 60% to 100%. Areas of purchasing/purchase consideration that have recovered to nearly 100% are basic imaging solutions for everyday imaging in general radiology. High-cost advanced imaging recovery is lower, in the 60% to 70% range. By pure volume, ultrasound remains far and away the most active technology area, but even ultrasound has recovered to only about 84% of pre-pandemic levels.

Additional factors have impacted the recovery, including:
• Global and domestic supply chain challenges
• Evolving variants of COVID-19 that continue to command extraordinary, increased operational and staffing resources
• Vendors’ strategies to recover losses by increasing prices and making negotiations more challenging
• Increased pressure due to rising workforce costs post-pandemic

Many healthcare organizations have confirmed that their capital budgets are lower today than pre-pandemic. As a result, replacement of aging technology is a major focus. New technology that is a preference rather than a necessity receives increased scrutiny. The key metrics being used for capital decisions include clinical efficacy and proven improved patient outcomes, reduced hospital days, and rapid revenue generation.

Contributing to a “new normal” in capital buying, healthcare organizations now present as a more condensed buyer profile. Partnerships, mergers, and acquisitions (M&A) in the healthcare industry are impacting not only imaging, but the entire spectrum of medical diagnostic and therapeutic capital technology. In response, in Q1 of 2022 many imaging vendors implemented price increases to boost profitability and counter the hurdles they’ve faced in the prior two-plus years: the rising costs of goods, production, delivery, and support.

According to many customers, healthcare organization consolidation due to M&A activity has also affected vendors’ negotiation strategies. April 2022 reflected a clear decision by many vendors to increase prices. In fact, most quotes issued in March 2022 were valid for days or weeks, not months. There’s also evidence of increasing pressure on healthcare providers to make the right decisions about whether to make a new purchase, maintain existing technology, or upgrade rather than replace. As a result, the need for an efficient and well-implemented, integrated value analysis process is more important than ever today and going forward.

Overall, the buying patterns relative to specific technology and imaging solutions suggest importance is being placed on highly versatile, mainstream technologies that will provide excellent flexibility but also maximize return on investment (ROI) by providing core functionality. Vendors are still introducing new features and functionality and will continue to do so. However, our review of quotes suggests that it will take longer for new, leading-edge features or capabilities to be adopted and viewed as the mainstream standard of care as measured by clinical efficacy.

Finally, the M&A trend has put pressure on the internal coordination of technologies within healthcare enterprises — both in terms of capital purchases as well as capital equipment service support. As health systems grow in size and complexity, there is a significant need to evaluate existing solutions before making purchasing decisions, creating huge savings opportunities. To capitalize, organizations may need to reorganize and reallocate existing technology before buying another system.

Overall technology-specific customer interest by vendor and key market segments
Many of the following areas were addressed in 2022 HealthCareBusiness News articles contributed by symplr spend advisors. As a result, high-level reviews of the major imaging segments follow.

Interventional X-ray (cardiac, vascular, cardiovascular, neurology)
The technology shows continued high interest in single-plane and ceiling-mounted solutions, as well as a resurgence in specialized solutions for radiology/oncology-focused systems. Hybrid OR and EP solutions are still a focus but are leveling off. Philips and Siemens lead in terms of customer interest in this area, followed by GE, Canon, and Shimadzu. Three in four customers are considering single-plane solutions over other configurations. Ceiling-mount orientation offerings continue to be the most actively considered, led by Philips and Siemens. Notably, GE has had substantial success with its floor-mounted solutions, primarily due to the company’s total focus on the floor-mounted, single-plane market. GE offers no ceiling-mounted single-plane solution. Philips leads in interest in biplane configurations, followed by GE. Siemens Healthineers dominates with its ARTIS pheno for hybrid OR and Canon has limited interest with its dual-plane cardiac/vascular specialty system.

MR
In MR, customers are still primarily interested in mid-field units. symplr Spends Provider Evidence database shows that 77% of quotes submitted for analysis include a 1.5T MR system, 21% include a 3.0T MR system, and 2% include systems below a 1.5T magnet strength. Siemens is the dominant vendor in this market based on new system purchase considerations in both the 1.5T and 3T solution markets. GE is a clear but distant second, trailed by Philips and Canon, respectively.

CT
In CT, the most commonly considered solutions are scanners in the mid-slice range of 120 to 160, which have evolved to offer a wide variety of clinical applications that provide solutions for a wide range of patients. This strategy ensures maximum ROI without compromising the quality of patient care. Of note in this category is the first photon-counting detector solution introduced by Siemens Healthineers, the NAEOTOM Alpha. This is followed by NeuroLogica’s FDA-approved OmniTom Elite.

Ultrasound (cardiac, vascular, general, and OB/GYN)
A key driver in the active ultrasound market has been a growing interest in lower-cost, noninvasive, nonionic, and highly portable imaging solutions to supplement traditionally higher-cost, more invasive, and contrast-based procedures. The expansion of ultrasound into truly handheld, point-of-care solutions with special transducers and applications in IOS and Android operating systems has put very good triage-type ultrasound into the physician’s pocket. Of all imaging technologies, the ultrasound market is the most diverse, and ranges from large, advanced solutions housed in the ultrasound department to in-house, highly mobile systems for use in surgery, emergency medicine, and at the patient bedside. Ultrasound, by far the most ubiquitous imaging modality in healthcare, also extends to specialized physician offices, which use portable ultrasound in their everyday practices.

General X-ray — Radiographic and radiographic fluoroscopy (RF)
The digital radiography market has remained steady over the past 12 months and is still very competitive between multiple vendors. Since the COVID-19 infection rate has declined in 2022, customer inquiries and purchasing activity for portable X-ray systems has begun to slow. The most active market segment is fixed radiography systems, which are typically replacements for older units. We see equal activity between single and dual detector system purchases depending on patient volumes and budgeting. There is still significant activity for value systems quoted through third-party dealers, which often are purchased for imaging centers, clinics, and smaller facilities. The purchase of flat panel detectors (digital retrofits) has slowed significantly as they are well-established in the market and are typically only replaced due to age or damage.

Purchasing activity for fluoroscopy systems has also remained steady over the past 12 months. Fluoroscopy is a mature market, and the majority of purchases seen are for replacing older equipment. Most of the quoting activity is an even mix of remote and conventional (tableside systems). Remote systems have become more popular over the past few years, especially for facilities with high patient volumes. We see limited activity for multipurpose RF systems, which are often used as overflow rooms for angiography or interventional procedures.

Service contracts and service support
Service continues to be an area that needs focus and oversight, demanding an organized and centralized view of an organization’s major medical capital service costs. While change is afoot, historically, service renewals were under the purview of individual clinical departments. This decentralized approach risks automatic renewals without a review or verification of cost — or consideration of whether a technology needs a different level of service or a contracted service at all.

Most service and support contracts are maintained by an original equipment manufacturer (OEM) service. Some may be based on a sole-sourced service vendor that supports multiple OEM technologies on a single contract. The high M&A activity in healthcare has created an opportunity for newly combined health systems to evaluate multiple contracts across the enterprise, choosing variable levels of coverage, variable terms, and variable renewal dates. Consolidating into a single master service agreement (MSA) offers savings opportunities via a coordinated, negotiated agreement; a coordinated term and renewal date, and the opportunity to review and validate the right level of service. Again, in some cases the decision may be to eliminate the service contract across all locations. There are also options for healthcare enterprises to pool imaging components such as detectors, tubes, transducers, and other technology subject to degradation based on volume and procedure protocols.

Regardless of capital budgeting and the need to control costs, it is important for health systems to ensure that major medical service agreements are reviewed for cost, for covered equipment, and more recently for consolidation across an enterprise organization. Savings opportunities such as those outlined here (and others, such as coterminus agreements) remain underevaluated and are worthy of exploration.

About the author: Tom Watson, principal advisor, symplr Spend. With deployments in 9 of 10 U.S. hospitals, symplr is the leader in enterprise healthcare software and services.