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Our team of editors discuss what they think about the current Next Generation Healthcare issues

Jodie Humphries
Web Editor

Is healthcare realising the benefits of IT?

Over the years have governments finally realised that IT can play an influential part in healthcare?
23 Mar 2010

The future of private sector imaging

Timon Singh

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Medical imaging has been pegged as one of the industry's largest growth markets for many years, but it is expected that over the next year it will grow by an impressive 6-8 percent. .

With a year-on-year growth expected to happen for the next five years, Europe's picture archiving & communication systems (PACS) market is drawing more and more opportunities within the sector.

With an increased focus on the use of IT in healthcare and the cardio PACS market in Europe projected to be the fastest-growing segment with a combined annual growth rate of nearly nine percent between 2008 and 2015, outsourcing opportunities are likely to grow fast as budget deficits force public sector healthcare to dig in.

Growth but no profit?

While outsourcers say that there is no problem in increasing productivity, they are concerned that they will not be able to achieve 'acceptable' levels of profitability. This is reflected in the high amounts tied up in expensive machinery and staff - radiologists' salaries are said to represent 27 percent of total costs. Then there is the cost of labs...

Speaking to Health Care Europa, one operator said, "In labs most big operators can achieve EBITDA margin of 20 percent and sometimes 25 percent or even over 30 percent. In imaging EBITDA margins can reach 20-21 percent, but a lot of capital is involved. This makes it much harder for us to invest in imaging."

Meanwhile, Dr Evangelous Spanos at Bioatriki, the Greek diagnostics group said that he felt imaging centres provided a good living for one or two radiologists, but were not unvisitable businesses otherwise.

For companies that bring manage radiology centres, there is a concern that there is not enough margin to attract private investors. Dr. Johannes Schmidt-Tophoff, the head of Curagita a German buying group, which brings together over 100 mid-sized radiology outpatient centres, states that this fear has been seen in falling margins as prices in South Germany have dipped 30 percent in the past four years.

With such fears, there is speculation that perhaps suppliers of the equipment such as Siemens should begin to take on a bigger risk, such as airplane carriers do in aircraft leasing. What is clear is while imaging has a future, it may not be a profitable one.

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