Improved Clinical and Workflow Benefits to Fuel Expanded Implementation of Picture Archiving and Communication Systems

London, United Kingdom — March 28, 2006 — The growing need to improve workflow in the radiology departments of European healthcare institutions has led to an increasing demand for picture archiving and communication systems (PACS). The enhanced functionality and scope of PACS hardware and projects are leading to a rapid return on investment (ROI) that will ensure a significant increase in their unit shipment in 2005-2011. Accelerated uptake will be driven by growing end-user confidence in making the large investments that PACS installations entail.

Frost & Sullivan (http://www.medicalimaging.frost.com) finds that the European PACS and PACS Professional and Technical Services Market earned revenues of $516.1 million in 2005 and is estimated to reach $834.3 million by 2012.

“While today’s end users do not require convincing about the workflow benefits of PACS, the considerable amount of capital outlay required for installation has been the key factor limiting market growth”, notes Mr. Martin Bryant, Research Analyst at Frost & Sullivan. “However, as the scope of PACS improves, end users are becoming more optimistic about the speed of ROI which will boost unit shipment of PACS.

Companies that manage their internal cost structures and organisational costs most effectively will be able to offer greater functionality at competitive prices without affecting their profit margins. This will ensure the conversion of unit shipment growth into a corresponding rise in revenues.

The need to curtail healthcare expenditure in Europe has led to the introduction of large-scale purchasing initiatives, which enable healthcare authorities to negotiate huge discounts and this is likely to endanger vendor profit margins.

“Maintaining profit margins in the face of increasingly demanding end users is the biggest challenge facing PACS vendors in today’s market”, remarks Mr. Bryant. “Market participants should exploit the opportunities offered by large-scale projects, while also taking care to remain competitive in smaller and private sector projects that offer huge revenue potential.”

Vendors have also broadened their workstation portfolios to adjust their product specifications and develop a clear distinction between primary diagnosis, secondary and tertiary review. Consequently, equipping hospital enterprises with PACS is likely to be a less capital-intensive undertaking, as low-end tertiary review stations can be installed in locations such as emergency wards. This will lead to significant cost savings to end users, thereby fuelling the uptake of PACS solutions.

Technological advances such as improvements in individual PACS components have created workstations with improved hardware to assist the optimisation of workflow. The advent of voice-recognition technology (VRT), which can be incorporated into PACS to create efficiencies in radiology reporting, dictation and transcription processes is likely to further enhance this trend.

Currently, due to radiology information system (RIS) installation being on parallel tracks with PACS, the technical profile of generic PACS is becoming increasingly complex. Simultaneously, the installation of local and wide area networks (LAN and WAN) to provide adequate bandwidth as well as essential archiving has augmented existing complexities.

Thus, gaining a competitive edge in the market will depend on companies’ ability to offer customised individual solutions to meet the specific needs of hospitals. To this end, vendors will need to produce fully integrated workstations to offer a consistent user-interface for all modalities.

Further, offering scalable and customisable PACS will assist in moving away from the ‘one-stop shop’ concept towards a solutions-driven approach. Companies that offer flexibility in their solutions-based offerings will enjoy increased market presence.

European PACS and PACS Professional and Technical Services Market is part of the Medical Imaging Subscription, which includes research in the following markets: PACS software, hardware, consulting services, project management, integration and networking as well as training and support. All research included in subscriptions provide detailed market opportunities, industry trends and the challenges affecting PACS vendors. It also provides strategic recommendations for market participants. Interviews are available to the press.

If you are interested in a virtual brochure, which provides manufacturers, end users and other industry participants with an overview of the latest analysis of the European PACS and PACS Professional and Technical Services Market (B690-50) then send an e-mail to Radhika Menon Theodore, Corporate Communications, at rmtheodore@frost.com with the following information: your full name, company name, title, telephone number, e-mail address, city, state and country. We will send you the information via email upon receipt of the above information.

Frost & Sullivan, a global growth consulting company, has been partnering with clients to support the development of innovative strategies for more than 40 years. The company’s industry expertise integrates growth consulting, growth partnership services and corporate management training to identify and develop opportunities. Frost & Sullivan serves an extensive clientele that includes Global 1000 companies, emerging companies and the investment community by providing comprehensive industry coverage that reflects a unique global perspective and combines ongoing analysis of markets, technologies, econometrics and demographics. For more information, visit www.frost.com.

European PACS and PACS Professional and Technical Services Market B690-50

Keywords in this release: Europe, picture archiving and communication systems, PACS, PACS professional services, radiology, PACS services, consulting services, project management, systems integration, PACS hardware, PACS projects, return on investment, ROI, voice recognition technology, VRT, radiology reporting, dictation, transcription, tertiary review, radiology information system, RIS, local area network, LAN, wide area network, WAN

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