Government Initiatives Key to Promoting PACS Solutions in Europe.

Business Editors/Health/Medical Writers

LONDON--(BUSINESS WIRE)--Jan. 21, 2004

Given the current economic slump on one hand and the urgent need for efficient resource utilization in healthcare delivery, government intervention is key to expand implementation of picture archiving and communications system (PACS) solutions, reveals new analysis by Frost & Sullivan (http://healthcare.frost.com).

Using PACS among other IT solutions, health departments of governments across Europe need to pass legislation allowing for a smooth transition to complete digitisation. The governing authorities can also partially or completely fund such initiatives through financial subsidies, soft loans and grants.

Meanwhile, PACS vendors need to propose viable solutions to partner with local administrative bodies on long-term projects. Opening up the healthcare industry to such subsidized partnerships will ultimately benefit the customer. Illustrative of this is the scheme being undertaken by the British Government involving the National Health Service (NHS). Local authorities in Italy and Spain are also considering similar plans at the regional level.

Hospitals in geographic proximity, requiring shared services, are linking up for a community PACS. Geographically common solutions can affect improved connectivity from the patient point of view. They can also provide enhanced savings due to cost effective bidding for the solution by the conglomerate.

Partnering with such groups will help market players obtain substantial contracts. It will also lead to greater diffusion of PACS technologies, even while overcoming the budgetary constraints that afflict the healthcare industry.

"The long term objective of such partnerships is to allow greater penetration of PACS technologies under the severe economic conditions," comments Frost & Sullivan Healthcare Industry Analyst Siddharth Saha. "Once benefits are realized, the individual hospitals will be in a position to upgrade to high-end systems. What is needed today is the push towards implementation."

In 2003, the growth rate of the overall European PACS market was estimated at a robust 22.0 per cent. Revenues are forecast to surge from $468.9 million in 2003 to $1,476.5 million in 2010.

The PACS market is gaining impetus not only from government support but also from healthcare providers who are looking to PACS to fulfill their increasing need for efficient management of voluminous imaging data.

To capitalize on these positive trends, PACS vendors will have to offer scalable and flexible solutions to suit different workflows and budgets within the healthcare industry.

"PACS systems totally compatible with emerging imaging technologies are likely to have greater acceptability and sales -- resulting in market growth," believes Mr. Saha. "Companies providing solutions that score well on criteria such as scalability, upgrade ability, negligible downtime and good cost-benefit ratio, backed by 24x7 services, are likely to achieve and retain a leadership position," he adds.

Brisk market growth is also likely to be driven by decreasing costs of PACS acquisition and usage. Vendors today are achieving up to ten per cent reduction in costs year on year due to technological advances. Simple price competition and economies of scale in the long term are also poised to underpin a decline in price of components of the PACS suite. Together, this translates to significantly reduced capital outlays for the resource strapped healthcare industry.

Moreover, once PACS is implemented, it is expected to validate itself by its efficient and economical performance, furthering the chances of the hospitals upgrading to the next version of the solution.

Efforts towards standardization are addressing the need for interoperability across vendor solutions and are anticipated to promote market expansion. The challenge today remains the integration of emerging imaging modalities with the PACS solutions, especially if the equipment is more than five years old.

Geographically, Scandinavia and Belgium represent highly developed markets for PACS solutions. Restrained market development in France and Spain is expected to be offset by promising increase in PACS sales in Italy and the explosive growth projected to occur in the United Kingdom and Germany.

"With Scandinavia leading the way, European hospitals are on their way to complete implementation of PACS solutions," concludes Mr. Saha. "Decreasing prices, acknowledgement of the benefits of these technologies, interoperability between equipment and systems, scalable solutions and effective professional services are set to contribute to deeper penetration levels.''

Frost & Sullivan will hold a conference call at 14:30 hrs GMT (15:30 CET) on Wednesday, 28th January, 2004, which will provide industry participants with an outlook for the European PACS market, including the trends across different product segments and an introduction to how the enterprise PACS market is expected to perform compared to modality systems. To participate, please email to [e-mail] with the following information: Name, Company, Title, Telephone Number, and e-mail. Upon receipt of the above information, a confirmation/pass code will be e-mailed to you.

If you are interested in an analysis overview which provide manufacturers, end-users and other industry participants an overview, summary, challenges and latest trends in the European PACS Market -- then send an email to Katja Feick -- Public Relations Manager at [e-mail] with the following information: Full name, Company Name, Title, Contact Tel Number, Contact Fax Number, Email. Upon receipt of the above information, an overview will be emailed to you.

Frost & Sullivan, an international consultancy firm, has been supporting clients' growth for over four decades. Our market expertise covers a broad spectrum of industries, while our portfolio of advisory competencies include strategic consultancy, market intelligence and management training. Our mission is to work with our clients' management teams to deliver market insights and to create value and drive growth through innovative approaches. Frost & Sullivan's network of more than 500 consultants, industry experts, corporate trainers and support staff, spans the globe with offices worldwide.

For unlimited access to constantly updated medical devices market news written exclusively by Frost & Sullivan's team of industry experts visit http://medicaldevices.frost.com.

European PACS Market Review

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