RSNA 2015: Would You Like to Upgrade?

Equipment upgradeability was one common thread across all imaging modalities on the RSNA 2015 show floor. The degree to which it is extending in scope, generalizing to every modality, is quite telling of the market’s expectations in the current economic environment.

From helping customers “do more with less” to helping them “leverage existing assets” and “start small, think big”, upgradeability is so much in the spirit of the times that it has become one of the most effective ways vendors respond to the imperatives and challenges their customers face today.

Broader and Deeper Upgrade Paths Notable Across Every Modality
Perhaps the most significant case study for upgradeability over the past decade is in general radiography, with the digital radiography (DR) “retrofits” that allowed providers to field-upgrade existing analog equipment to digital without having to buy into a new turnkey DR room. This trend, spearheaded by Carestream Health in 2008 with the launch of its DRX-1 wireless DR detector as a DR Retrofit, has taken the market by storm over the past several years. The DR retrofit offerings are popular in the market due to their cost-effectiveness. Additionally, a number of components comprising an X-ray imaging unit, such as the tube or the table, can be retained or replaced following their own product life cycle.

More recently, the “star” modality in breast imaging, 3D digital breast tomosynthesis (DBT), has also taken a sharp turn toward upgradeability. Hologic, the first-to-market in the U.S. with a FDA-approved product, has been offering DBT as a hardware and software upgrade to its Selenia Dimensions 2D full-field digital mammography (FFDM) system since 2012. Similarly, the DBT offerings from GE Healthcare, FDA-cleared in 2014; from Siemens Healthcare, FDA-cleared in 2015; and from Fujifilm, pending FDA approval, are all positioned as field upgrades to their 2D FFDM systems.

CT Equipment Upgradeability: The Norm Rather than an Exception
Nowhere is equipment upgradeability in medical imaging more standard than it is in CT. Every major CT vendor, including Philips Healthcare, Siemens Healthcare, GE Healthcare, Toshiba Medical, and Hitachi Medical, has now solidified the upgrade paths supported in their CT platforms for going from 16-slice to 64-slice, or from 64-slice to 128-slice or even to higher configurations, such as 256-slice or 512-slice CT. As one of many examples, with its new Scenaria SE 64/128 CT, Hitachi proposes an on-site upgrade from 64- to 128-slice capabilities.

As it has started to generalize over the past five years, these upgradeable CT offerings have added an entirely new dimension to the way providers are able to plan and budget for their CT investments over the mid and long term. Now, providers can rely on these new offerings to support their plans on the clinical front, for example, by adding cardiovascular CT to their imaging service line a year or two after buying new CT equipment.[[{"type":"media","view_mode":"media_crop","fid":"44512","attributes":{"alt":"Nadim Michel Daher, Industry Principal, Medical Imaging and Imaging Informatics, Frost & Sullivan","class":"media-image media-image-right","id":"media_crop_8225634037872","media_crop_h":"0","media_crop_image_style":"-1","media_crop_instance":"4989","media_crop_rotate":"0","media_crop_scale_h":"0","media_crop_scale_w":"0","media_crop_w":"0","media_crop_x":"0","media_crop_y":"0","style":"height: 225px; width: 180px; border-width: 0px; border-style: solid; margin: 1px; float: right;","title":"Nadim Michel Daher, Industry Principal, Medical Imaging and Imaging Informatics, Frost & Sullivan","typeof":"foaf:Image"}}]]

MRI and PET Now Getting their Share of Upgradeability
In MRI, the trend toward forklift field-upgradeability seems to be generalizing rapidly. Beyond the incremental software and hardware upgrades, which have been the norm in allowing providers to expand their MRI service gradually to new specialties and organs, a new generation of offerings is now taking the concept to the next level. Recent in-field MR upgrade offerings from Siemens Healthcare (Avanto.fit), Philips Healthcare (the SmartPath to dStream), and GE Healthcare (SIGNA Explorer Lift) are new game-changers in the MR marketplace.

These MR field upgrades consist of stripping an existing MRI system down to the bare magnet and re-building it into a new system boasting the latest electronics, coil technologies, and software capabilities of the vendor’s latest-generation system. By keeping the old magnet in place, knowing this expensive component can work well for 20 years, imaging providers now have access to the latest in MR equipment at about half the price of a net new system, all while avoiding new construction costs.

One novelty from the RSNA 2015 show floor comes from GE Healthcare, which is now bringing the concept of upgradeability to PET-CT, beyond the CT side of PET-CT platforms. With the new Discovery IQ, GE is touting an upgrade path that is quite unique in the PET industry: customers can now purchase PET-CT equipment in its entry-level configuration with three PET rings and later field-upgrade to four, or to five PET rings for the high-end configuration.

Extended Replacement Cycles: From Caveat to Opportunity
So what does this generalized upgradeability of medical imaging equipment, for which providers seem to have a large appetite, mean for the industry vendors?

In the first few years after this trend materialized, it was viewed by the vendors mainly as an additional way to drive recurring revenues from the existing installed base. Initially, before the industry moved into upgradeability with full force, the vendors seemed wary of the fact they were starting to play an active role in making their revenue flow less capital-intensive and more based on recurring revenue. Detractors of this disruptive model even warned of the risk of vendors cannibalizing their own opportunities with this type of offering and slowing their own revenue growth potential.

Now, this market dynamic, that industry vendors once dreaded, has them completely reshaping their marketing and sales approach around it.

Asset Management Services in the Spotlight
Indeed, vendors now seem to be really embracing equipment upgradeability as a key element of their value proposition. Internally, it is increasingly perceived as a major success factor in their efforts toward long-term customer retention and differentiation, as a key driver for moving them from selling “products” to actually selling “platforms,” and as a lever to start positioning themselves not merely as vendors, but as true partners to their customers.

As vendor organizations continue to evolve in this direction, the range and capabilities of their asset management services are maturing rapidly and coming under the spotlight of their most loyal customers. With asset management now including upgrade paths at its core, vendors are capable of devising a clear and viable investment plan for the next three, five, and even 10 years, crafting customized solutions that scale up as providers evolve, while helping demonstrate and optimize the value that customers derive from these investments at every stage.

As a core component of service-based technology delivery models such as managed equipment services (MES), asset management services will likely be one of the cornerstones of the transition of vendors and providers to a value-based medical imaging environment.