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Health care reform will slow down the diagnostic imaging market

by Lauren Dubinsky, Senior Reporter | November 12, 2014
Health care reform and the shift from the fee-for-service to a value-based payment model will have a negative impact on the diagnostic imaging market in the U.S., according to a new report conducted by Decision Resources Group. Even though the elderly population is increasing and creating a greater need for diagnostic procedures, the market will only grow "modestly" through 2023.

The new payment model is transforming the radiology department from a profit center to a cost center for health care facilities, according to the report. Facilities will be taking a lot more consideration into what imaging procedures are appropriate, which means there will be a reduction in the number they perform.

However, the changing health care environment will have a positive impact on a few modalities. The cost pressure that many facilities face today will influence them to purchase modalities with a lower price tag including ultrasound. The technological improvements that will be made to ultrasound in the near future will also influence more facilities to go with that modality.
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The CT market will be another sector to experience growth. The more stringent radiation dose regulations that will go into effect in 2016 will cause facilities to purchase new CT systems to help meet the requirements and avoid reimbursement penalties.

The report also surveyed radiologists to find out what their most important factor is when assessing their relationship with vendors. Most of them cited servicing over imaging quality or product features.

The major companies, GE Healthcare, Siemens Healthcare, Philips Healthcare and Toshiba, have been dominant forces, which has made it hard for smaller companies to gain share.

The report also notes that Asian companies that specialize in one modality, including Mindray Medical International, iRay Technology, and Vieworks are starting to infiltrate the market. They are offering affordable alternatives to the more expensive, brand-name systems.

"Single-modality vendors tend to have the most success in the general radiography and ultrasound system markets, which generally have lower R&D costs," Felix Lam, senior analyst at Decision Resources Group, said in a statement. "These companies cater to smaller, non-hospital facilities."

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