By Arun Gill
About 4.7 billion diagnostic imaging procedures were performed globally in 2021, representing a strong recovery over 2020.
Healthy demand for teleradiology services resulted in the global penetration of teleradiology reads into diagnostic imaging procedures bouncing back to 1.9%, and the overall teleradiology reading services and IT market revenue elevating past its pre-pandemic level to USD $1.7B. With a projection for the market to reach USD $3.7B in 2026, here I explore five drivers fueling this period of robust growth.
1. Radiologist shortage leading to improved compensation
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The accelerated post-pandemic demand for teleradiology services has posed a new set of challenges for vendors, such as ensuring adequate resourcing capacity. This is a task made tougher by an unprecedented radiologist shortage, particularly in the U.S., driven by burnout and wage inflation. This has caused considerably longer turnaround times for nonurgent diagnostic examinations. To attract and retain radiologists, teleradiology market leader vRad set the tone 12 months ago, announcing a substantial radiologist compensation increase of up to 25%, beginning in January 2022. Staff increases ranging from between 10-30% have also been common across many U.S.-based teleradiology providers this year.
Teleradiologist wage inflation and subsequent higher teleradiology reading service fees (+12% y-o-y global revenue per read projection in 2022) could be viewed as a barrier and deter some healthcare providers from outsourcing their diagnostic imaging workload. However, the reality is that most healthcare providers are in desperate need of external support and view teleradiology as a necessity to ensure efficient reading turnaround times and provide high-quality patient care. In addition, more than 50% of radiologists are over the age of 55, meaning that many experienced radiologists will be entering retirement over the next decade. With radiology demand (reading hours) rising at a faster pace than the supply of experienced radiologists, the shortfall between supply and demand is set to accelerate further.
2. Increased diagnostic procedures being performed
Prior to COVID-19, the volume of diagnostic imaging examinations had been growing annually by >3% and hit 5.0B in 2019. Although volumes dipped in 2020, the strong recovery witnessed in 2021 is set to continue with volumes reaching >6B by 2026. The number of examinations is being fueled by several well-known factors, including an aging population, rising demand for early disease diagnosis among patients and physicians, improved government funding toward chronic disorders, and increases in disposable income/middle class population, particularly in less developed geographies.