Philips’ shared services system echoes market changes

The shared services market for ultrasound is evolving. Practice patterns long established in Asia and Europe are cropping up in the U.S., prompting midsize and even large hospitals to buy ultrasound scanners designed for cardiological as well as radiological applications, according to Philips Medical Systems.

Early next month, the company will respond with its first commercial shipments of the HD11 XE. The shared services system has been outfitted with advanced cardiological functions, including the ability to process and analyze cardiac data and to store dynamic image loops. It also features a flat-panel monitor that allows viewing under brightly lit conditions such as cath labs.

The increased performance is reflected in the price. The XE lists for between $120,000 and $150,000. Prices for the less powerful HD11 begin under $100,000.

The HD11, which was released commercially in mid-February, is a state-of-the-art alternative to premium systems for budget-strapped healthcare facilities (DI SCAN 2/21/05). It offers advanced radiological capabilities, such as 3D/4D imaging, and is being targeted at prospective customers who have been putting off the purchase of sonography systems or settling for remanufactured platforms.

The XE configuration takes the HD11 platform to a higher plane, adding sophisticated cardiological applications. Its development reflects a worldwide demand for flexible, powerful ultrasound scanners and, particularly, a change in U.S. ultrasound practice. Cardiologists and radiologists in the U.S. lately have been maintaining their turf but showing a greater interest in working together, in some instances sharing exams and equipment, according to Philips.

Shared services are typically found at small community and rural hospitals, where sonographers with exclusive skill sets take charge of the ultrasound equipment on different days. Now sonographers are being cross-trained on multiple applications, conducting exams beyond the reach of the typical shared service system - and not just in niche markets.

"What we are seeing in the U.S. today is a trend toward more of this shared service capability. Even large community hospitals are asking for systems that provide the capability to do sophisticated exams through the entire body, head to toe," said Dick Tabbutt, director of global marketing for shared service and emerging markets for the Philips ultrasound business.

Sometimes the radiology department does the exam for the cardiologist. Other times, the cardiology department borrows the equipment from radiology.

"I would say the most common model in the U.S. is of a system shared between the two departments," he said.

Budgetary concerns constitute a major driver of this turn toward shared services. The technological wherewithal to pack this advanced capability into a value-priced package constitutes another.

"The technological edge is the ability to provide not only the imaging but the image storage and analysis to support cardiology," Tabbutt said.

The development and sale of more sophisticated shared services equipment will have a limited impact on demand for premium systems, he said. These products provide leading-edge capabilities, such as higher frequency small parts imaging, and the ability to tap into the latest applications. Powerful shared services equipment may, however, have some effect on the value-driven products designed for radiological applications.

"For everyday types of patients, representing rule-outs for gall bladder disease or mitral regurgitation, you are seeing increased demand for systems that can handle this broad range of capabilities at a value price point," he said.

This could change the way the industry sells to medical practitioners. Typically, vendors have sold ultrasound equipment through separate sales forces - one for radiology, the other for cardiology - that sell to these departments independently. The emergence of shared services as a linchpin between the two medical specialties could require more sales coordination.

"We are seeing much more collaboration by the departments. They are asking what they need for dedicated echo and dedicated radiology and what they need to work together," Tabbutt said.

The demand for shared services ultrasound equipment is especially prevalent in outpatient clinics, he said. These clinics must handle a range of radiological applications but increasingly would like to field requests from cardiologists.

The broad use of ultrasound equipment is already well established and growing in other parts of the world. China is demanding more capabilities in shared service systems, according to Tabbutt, because the use model there is toward general imaging of the whole body.

"Chinese doctors specialize in ultrasound," he said. "They use the equipment to scan the entire body - to do abdominals, gyn and ob scans, cardiac, as well as small parts."

This pattern is reflected in Japan, although demand for shared services equipment is not growing at the same rate as it is in China, Tabbutt said. Similar patterns of usage and equipment demand are appearing in Eastern European countries, particularly in countries that have recently joined the EU.

"We are seeing rapid growth in healthcare economics," Tabbutt said. "And ultrasound is playing a very large role there."

This growth is nothing new for Europe, which has long embraced shared services ultrasound.

"Internal medicine physicians in Germany are doing abdominal, vascular, and cardiac, and they have been for years and years," he said.

This usage pattern has driven physicians to look for equipment that can support broad yet sophisticated types of applications. The HD11 XE meets that demand with a more powerful beamformer and image processing capabilities suited to cardiology. Philips has integrated its QLAB analysis platform into the HD11 XE to manage sophisticated cardiac analyses. The overall design of the HD11, its small size and resultant mobility, as well as its ergonomics, suit the general needs of shared services markets, Tabbutt said.

The timing couldn't be better for Philips, whose newly launched XE configuration meets needs in Asia and Europe and simultaneously addresses fledgling needs in the U.S. If the cooperation between radiologists and cardiologists that has spurred this change in the U.S. continues, shared services may emerge from the shadows of dedicated premium systems and command a premium of its own.