Pending arrival of digital detectors prompts debate over economics

The impending introduction of digital x-ray detectors is beginning to spur debate over the influence the technology will have on medical imaging. Proponents of digital detectors believe that the technology will have a revolutionary impact as the massive installed base of analog-based x-ray systems upgrades to digital technology. Other market watchers, however, believe that digital detectors may have a more evolutionary role, due to factors such as the high price of digital x-ray systems relative to conventional analog devices.

The imminent commercialization of digital detectors was clear at last month's Radiological Society of North America meeting in Chicago. Swissray International and Sterling Diagnostic Imaging received 510(k) clearances for their digital detectors just prior to the meeting, and both companies expect the final go-ahead for their integrated digital systems to arrive from the Food and Drug Administration at any time. In addition, a number of other vendors displayed works-in-progress x-ray systems using detectors manufactured by a wide variety of companies.

The benefits of digital x-ray detectors have often been enumerated. They will enable the digitization of medical imaging's last analog modality, making it easier to incorporate x-ray into PACS networks. The systems will likely improve work flow in radiology departments by reducing the number of retakes required and the amount of film used. The potential clinical benefits of digital detectors await more widespread usage, but it is likely that as the technology evolves its image quality and clinical utility will improve relative to that of screen-film x-ray.

But the benefits of digital detectors come at a price. Digital x-ray systems, whether based on amorphous silicon, amorphous selenium, or CCD detectors, will be sold at a hefty premium over conventional x-ray systems. Sterling has announced preliminary pricing of $300,000 to $350,000 for integrated DirectRay systems, while Swissray plans to sell its AddOn-Multi-System for around $400,000. A dedicated analog-based chest unit typically sells for $175,000. That's a major price differential, especially for a modality that often has reimbursement rates in the double digits: The new Medicare reimbursement rate for chest x-rays is $27.51.

In addition, there are already established technologies for digitizing x-rays, such as computed radiography and film digitizers, and it's unlikely that vendors of these products will cede their market to digital detector firms without a fight. CR market leader Fuji Medical Systems USA, for example, has aggressively cut prices on its readers in the last several months to make them more competitive with flat-panel digital detectors.

Fuji's new FCR 5000 reader lists for $265,000, which is 20% to 25% below the Stamford, CT, company's previous flagship product, FCR 9000. Fuji also implemented a 30% cut in price on its AC-3 reader, and is selling AC-3 packages for $110,000, which includes a reader, imaging plates, and workstation. An AC-3 package with a printer rather than a workstation sells for $5000 more.

CR’s Advantages

Digital detector technology may be a more elegant solution to x-ray digitization than CR, because it doesn't require a storage-phosphor plate to be removed from an x-ray system and transported by a technologist to a reader. But CR has an advantage over digital detectors because hospitals can go digital with their existing x-ray systems-the only equipment they need to buy is the reader and imaging plates.

Fuji believes that the high price of digital x-ray systems will impede the diffusion of the technology, at least in the short term. In addition to the lower cost of a CR reader relative to a digital-detector system, a single CR reader can serve multiple x-ray rooms, giving the technology a further advantage on a cost-per-room basis, according to Clay Larsen, managing director of marketing for Fuji.

"The fact that (digital detector systems) save a few steps from the technologist's standpoint doesn't come close to offsetting the cost-per-room disadvantage," Larsen said.

Fuji believes that hospitals will acquire digital detector-based systems to replace older x-ray rooms on an ongoing basis, rather than make bulk purchases to digitize entire departments. If that occurs, sales of digital detectors will track the more modest growth rate of the x-ray market instead of the booming growth rate being experienced in the PACS industry, he said.

Not surprisingly, Sterling executives see the market differently. The company believes that different hospitals will proceed with DR installations at different speeds, with some converting in one fell swoop all their analog x-ray rooms to digital as part of PACS networks. Other institutions may purchase just one room at a time, while some may take years to climb on board the digital-detector bandwagon, according to Rodney Wolford, chairman and CEO of the Greenville, SC, company.

Overall, Sterling believes that the debate over digital detectors is more than just an argument over the return on investment of a DirectRay room compared with a conventional x-ray room. Sterling's argument for digital detectors mirrors that used to justify PACS acquisitions: The technology will dramatically change the work flow of the radiology department, enabling facilities to operate more efficiently. For example, digital detectors will enable image quality assurance to be conducted in seconds, will dramatically reduce time spent developing films, and will enable images to be sent instantly to multiple locations within a healthcare enterprise, according to Ernest Waaser, Sterling COO and executive vice president.

"The real economic payback comes from being able to finally change the way you deliver radiology in a healthcare system by having a fully digital department," Waaser said. "You can justify the shift to digital within the (x-ray) room, but the real payback comes from taking cost out of the greater radiology system outside the room. Those (reasons) are harder to get your hands on and quantify right now, but they are absolutely real."

Like Sterling, Swissray sees digital detector products such as its AddOn-Multi-System as part of an overall solution for healthcare enterprises. The Hitzkirch, Switzerland company at the RSNA conference announced an agreement with teleradiology and PACS vendor EMED of San Antonio that gives Swissray rights to sell EMED's PACS line. The deal is crucial in enabling Swissray customers to maximize the utility of the AddOn-Multi-System by bundling it with a PACS network, according to Ueli Laupper, vice president of international sales and marketing.

"We don't just provide equipment, we provide the full, total solution," Laupper said.

Other vendors with positions in both the CR and digital detector markets see a coexistence between the two technologies in the years to come. Siemens and Philips are collaborating with Thomson Tubes Electroniques in the Trixell digital detector joint venture, but the vendors also sell CR systems manufactured by Fuji. Siemens and Philips executives believe that while digital detectors will be hot, there will continue to be a role in the market for older technologies like CR.

"We see CR staying in the industry with DR, because it will take care of free cassettes, the existing installed base, bucky rooms, things like that. CR still has its place," said James Champagne, director of marketing for radiographic, radiography/fluoroscopy, and surgical systems for Philips of Shelton, CT.

Indeed, Cary Nolan, president and CEO of Cleveland-based Picker International, sees an analogy between digital detector technology and spiral CT. Like digital detectors, spiral CT was a revolutionary technology when introduced in 1989, but it took years before the technology fully penetrated the market. The full conversion to digital detectors may take even longer.

"The adaptation (to digital detectors) will be even slower than spiral CT," Nolan said. "It will be 10 years before you see most of the market (using) digital systems."