European PACS market to gain impetus from government support and forthcoming digitisation

London 21 January 2004Given the current economic slump on one hand and the urgent need for efficient resource utilisation in health care delivery, government intervention is key to expand implementation of picture archiving and communications system (PACS) solutions, reveals new analysis by Frost & Sullivan. 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 health care industry to such subsidised 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 effect 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 health care industry.

"The long term objective of such partnerships is to allow greater penetration of PACS technologies under the severe economic conditions", commented Frost & Sullivan health care industry analyst Siddharth Saha. "Once benefits are realised, 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 percent. Revenues are forecast to surge from $468,9 million in 2003 to $1476,5 million in 2010. The PACS market is gaining impetus not only from government support but also from health care providers who are looking to PACS to fulfil their increasing need for efficient management of voluminous imaging data. To capitalise on these positive trends, PACS vendors will have to offer scalable and flexible solutions to suit different work flows and budgets within the health care industry.

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

Brisk market growth is also likely to be driven by decreasing costs of PACS acquisition and usage. Vendors today are achieving up to ten percent 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 health care 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 standardisation 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", concluded 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."

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 e-mail to Katja Feick, Public Relations Manager, with the following information: Full name, Company Name, Title, Contact Tel. Number, Contact Fax Number, e-mail. Upon receipt of the above information, an overview will be e-mailed to you. More information on growing PACS implementation can be read in this VMW issue's article Professional change management likely to ease transition to PACS implementation.

Leslie Versweyveld

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