Following years of robust growth peaking in 2005 and 2006, starting in 2007 the North American market for advanced (3D/4D) visualization and clinical applications entered a phase of historically unprecedented decline in market revenues.
Indeed, the global credit crisis and other macroeconomic affecting markets in North America and globally during the third quarter of 2008 lead to a general slowdown in healthcare technology spending by hospitals.
As gaining access to capital became more challenging and the need to maximize capital on-hand became more pressing, capital spending on imaging technology was halted. Market revenues from sales of new CT and MR imaging equipment plummeted. At the same time, increased regulatory requirements and reimbursement cuts compounded the strain on medical imaging spending.
While the decline has not been as dramatic for advanced visualization as for certain other segments of the medical imaging market, this segment was not spared, declining slightly in 2007 and 2008, and heavily in 2009. However, the outlook for the market from 2010 onwards is positive. There appears to be a consensus among industry participants that 2010 will see a revival of the market, as indicated by a slight improvement in the flow of orders in the third quarter of 2009. Knowing that orders lead revenues by a period of x months or more, it will not be until the latter part of 2010 that the recovery phase is in full swing.
Like other segments of the U.S. healthcare technology market, the advanced visualization market has suffered a decline in spending as well as unfavourable budget planning throughout 2009. The year 2009, which was characterized by a ‘wait-and-see attitude in the marketplace, exacerbated the market decline that started in 2008 as a result of a slower CT market.
The U.S. market was greatly affected by these factors, which are mostly external to the market, and suffered a larger decline than Canada and other advanced economies worldwide. In 2009, revenues for the U.S. market for advanced (3D/4D) visualization and clinical applications plummeted to $xxx.x million, a decrease of xx.x percent over the previous year, but are expected to grow at a positive rate of x.x percent between 2009 and 2016, reaching $xxx.x million in 2016.
With about xxx hospitals with a radiology department and far less imaging center providers relative to the U.S., the Canadian market is much smaller than the U.S. market, representing less than x percent of the total North American market revenue opportunity.
In 2009, revenues for the Canadian market for advanced (3D/4D) visualization and clinical applications were $xx.x million, a decrease of xx.x percent over the previous year, and are expected to grow at a healthy growth rate of x.x percent between 2009 and 2016 to reach $xx.x million in 2016. Starting from a smaller base and being less mature than the U.S. market, the Canadian market continued to grow through 2007 and 2008, declining only in 2009 before it recovers its growth path starting 2010.
While Canadian contracts tend to be larger from the perspective of deployment, their dollar value is subjected to much more pressure than similar installations would be in the U.S. This is a direct result of the purchasing behaviour of Canadian hospitals, who are better able than their U.S. counterparts, to exercise their bargaining power through group purchasing and federal funding. Moreover, not all market participants are as active selling into the Canadian market as they are in the U.S., as they are either absent from this market or work mainly through distributors.
The medical image post-processing platform consists of the IT hardware and associated low-level software and algorithms, providing the underlying the basis for clinical applications. It represents only a minor portion of market revenues, or about fifteen percent in 2009. Indeed, as the market matures, revenues are becoming more heavily weighted towards the additional clinical applications, which also represent greater added value compared with the basic software segment.
Since the inception of the market, Computed Tomography (CT) applications have consistently accounted for the lions share of market revenues, capturing xx percent in 2009. Furthermore, CT is expected to remain a major driver of growth in the North American market, where it will draw a stable to increasing share of market revenue. This growth continues to be driven by the clinical specialty of cardiology, which constitutes the most dynamic area of the market.
Magnetic Resonance (MR) applications, which represent about ten percent of market revenues, have not kept up the pace of growth of previous years, as the development and the market adoption of new MR procedures requiring advanced post-processing, have been rather slow.
Interventional and molecular imaging, at eight and six percent, respectively, are two small but growing areas for advanced visualization and clinical applications. Their growth is far from explosive, however, mirroring the slow penetration of this technology in clinical areas such as neurology or oncology.
