MARKET OVERVIEW

HIMSS AnalyticsTM Database derived from the Dorenfest IHDS+ DatabaseTM

12007 HIMSS Analytics

MARKET OVERVIEWHospital Cardiology PACS Applications

2006Year End Report



CPACS Installation Summary

Cardiology PACS (CPACS) has not achieved rapid adoption in the market at this point in time.

Not Automated80%

Plan to Purchase CPACS for the First Time

2%

Have signed a contract for CPACS but have not yet installed the system

3%

CPACS System Installed16%

N = 5,082



CPACS Installation SummaryBy Number of Beds

53%

1%

46%

51%

3%

46%

62%

4%

33%

64%

5%

32%

78%

3%

22%

1%

4%

95%

No CPACS/NoPlans

No CPACS/Plans toPurchase

CPACS Contractedor Installed

Under 100 Beds100 to 199 Beds200 to 299 Beds300 to 399 Beds400 to 499 Beds500or More Beds

Larger hospitals are more likely to have CPACS installed. While hospitals across all bed size segments are equally likely to purchase this software, hospitals with 200 to 299 beds are most likely to purchase this technology.

N = 4,017



50%

10%

40%

43%

0%

57%

41%

2%

57%

74%

4%

22%

No CPACS/ NoPlans

No CPACS/Plans toPurchase

CPACS Contractedor Installed

Under 25,00025,000 to 49,99950,000 to 99,999100,000 or More

Hospitals that do between 25,000 and 99,999 are most likely to have an installed CPACS system. However, hospitals that do 100,000 or more imaging procedures are, by percentage, most likely to purchase this technology in the future.

N = 1,159

CPACS Installation SummaryBy Number of Imaging Procedures



9%

30%

25%

14%

7%

5%

6%

4%

2006

2005

2004

2003

2002

2001

1999 or 2000

1998 or earlier Approximately two-thirds of contracts for CPACS systems have been signed in the past three years.

N = 467

CPACS Installation SummaryTemporal Summary of Installations and Contracts



77%

4%

19%

84%

3%

12%

Not automated

Signed firstcontract

Automated

20052006

The installation rate for CPACS has increased seven percent in the past year. The percent of hospitals that have signed a contract for CPACS technology has also increased slightly since 2005.

N = 3,948

CPACS Installation SummaryOverall 2005/2006 Data



84%

3%

2%

11%

Not automated

Plan to purchase software

Signed first contract

CPACS installed

2004

Among the hospitals that did not report having CPACS in 2005, 11 percent have installed the technology in the past year and another two percent have signed an initial contract. Another three percent plan to purchase the technology in the next year.

N = 3,323

CPACS Installation SummaryStatus of Not Automated Hospitals in 2005



Installation Rate of CPACS Modalities

9%

9%

10%

14%

15%

NuclearCardiology

IntravascularUltrasound

CT

Echocardiology

Cath Lab

The cath lab and echocardiology modalities are the most widely used CPACS modalities.

N = 5,082



Number of Modalities Installed

36.43%

7.86%

14.51%

18.83%

22.37%

Five

Four

Three

Two

One

Among those hospitals that have installed CPACS technology, nearly 40 percent are installing five modalities of CPACS. However, a nearly equal percentage are implementing only one or two modalities.

N = 903



25%

24%

51%

23%

25%

52%

14%

21%

65%

14%

20%

67%

11%

11%

77%

2%

4%

94%

Four to Five

One to Three

None

500 or More Beds 400 to 499 Beds 300 to 399 Beds 200 to 299 Beds 100 to 199 Beds Under 100 Beds

Larger hospitals are more likely than smaller hospitals to have a full range of CPACS modalities installed at this time.

N = 4,016

Number of Modalities InstalledBy Number of Beds



0%

40%

60%

36%

21%

43%

29%

31%

40%

10%

13%

77%

Four to Five

One to Three

None

Under 25,000

25,000 to 49,99950,000 to 99,999

100,000 or More

Hospitals that perform 50,000 99,999 imaging procedures are more likely to have four to five CPACS modalities installed.

N = 1,104

Number of Modalities InstalledBy Number of Imaging Procedures



Summary of Installations

329 hospitals (6 percent) have installed software or have signed a contract for software for all five cardiology PACS modalities.4,179 hospitals (83 percent) do not use cardiology PACS software. The remaining 574 hospitals (11 percent) use software for several, but not all, modalities in cardiology areas defined in this report.

N = 5,082



26.72%287PHILIPS MEDICAL SYSTEMS

21.88%235GE HEALTHCARE

15.36%165AGFA-GEVAERT

8.66%93EMAGEON

8.47%91SIEMENS MEDICAL SOLUTIONS

7.17%77MCKESSON PROVIDER TECHNOLOGIES

1.58%17SCIMAGE, INC.

1.21%13DR SYSTEMS, INC.

1.02%11PROSOLV

0.84%9LUDMEDX CORPORATION

% of Market# of InstallationsVendor

10 Vendors and multiple not reported vendors share the remaining 7.08% of the market.

N = 1,074

Hospital Cardiology PACS Top Ten Installed and Contracted Systems







7.08%8EMAGEON


3.54%4PROSOLV

3.54%4AMICAS

2.65%3SCIMAGE, INC.

0.88 %1DR SYSTEMS, INC.


1 Vendor and multiple not reported vendors share the remaining 7.08% of the market.

N = 113

Hospital Cardiology PACSTop Ten Installed/Contracted Systems Hospitals Under100 Beds




0.82%2PROSOLV

0.82%2LUDMEDX CORPORATION

1.23%3SCIMAGE, INC.




7.00%17EMAGEON





N = 243

Hospital Cardiology PACS Top Ten Installed/Contracted Systems Hospitals 100-199 Beds




0.83 %2PROSOLV


1.67%4LUMEDX CORPORATION

2.08%5SCIMAGE, INC.


8.33%20AGFA-GEVAERT


11.25%27EMAGEON




N = 240

Hospital Cardiology PACS Top Ten Installed/Contracted Systems Hospitals 200-299 Beds




0.55%1DIGISONICS, INC.


1.10%2OPTIMED TECHNOLOGIES, INC.

1.10%2SCIMAGE, INC.


9.39%17EMAGEON






N = 181

Hospital Cardiology PACSTop Ten Installed/Contracted Systems Hospitals 300-399 Beds




0.87%1PROSOLV

0.87%1DYNAMIC IMAGING, INC.


1.74%2SCIMAGE, INC.

4.35%5EMAGEON







N = 115

Hospital Cardiology PACSTop Ten Installed/Contracted Systems Hospitals 400-499 Beds






1.10%2PROSOLV

1.10%2SCIMAGE, INC.



10.44%19EMAGEON





N = 182

Hospital Cardiology PACS Top Ten Installed/Contracted Systems Hospitals 500+ Beds



Hospital Cardiology PACS Top Ten Vendors Considered for a Planned Purchase

2EMAGEON

3LUMEDX CORPORATION

1AMICAS

2DR SYSTEMS, INC.

4FUJIFILM MEDICAL SYSTEMS

17MCKESSON PROVIDER TECHNOLOGIES

18AGFA-GEVAERT GROUP

19SIEMENS MEDICAL SOLUTIONS

24PHILIPS MEDICAL SYSTEMS

34GE HEALTHCARE

# of Times ConsideredVendor



5%

8%

18%

27%

26%

16%

500 or more beds

400 to 499

300 to 399

200 to 299

100 to 199

Under 100

The majority of CPACS plans for purchase are expected to occur in hospitals with fewer than 400 beds, with the 100 299 bed segment showing the most activity at this time.

N = 104

Plans to Purchase a CPACS SystemBy Number of Beds



10%

13%

14%

63%

Greater than 24Months

18-24 Months

12-18 Months

6-12 Months

Over 60 percent of the hospitals that would like to sign a contract for CPACS technology anticipate that they will do so within the next six to 12 months. However, another 10 percent will defer this purchase for at least two years.

N = 70

Planned Timeframe for Signing a Contract



1.34%

1.36%

1.42%

1.65%

1.75%

NuclearCardiology

CT

IntravascularUltrasound

Echocardiology

Cath Lab

There is no clear leader for CPACS application modality for planned purchases at this time.

N = 5,082

Plans to Purchase Cardiology CPACS Modalities



Summary

Over three-quarters of hospitals do not have CPACS technology. The remaining hospitals either currently use, have contracted for or are planning to purchase CPACS technology. Larger hospitals are most likely to have an installed CPACS.Over eighty percent of contracts for CPACS technology have been signed since 2001. Four percent of the systems that have signed a contract for CPACS technology have not yet installed the software. The three-quarters of the organizations that plan to purchase CPACS technology plan to do so in the next two years.



Of the organizations that have an installed CPACS system, there is no clear trend regarding automating for multiple modalities. There is also no clear modality leader emerging. Most hospitals use a single CPACS vendor. GE Healthcare holds over 20 percent of the industry market share followed closely by Philips Medical Systems. They are also the top vendors being considered for future purchase.

Summary



Most of the planned CPACS purchases are among smaller hospitals.GE Healthcare has more planned purchase indications than second mention Philips Medical Solutions and third mention McKesson Provider Technologiescombined.Phillips, Siemens Medical Solutions, Agfa Gevaert, and McKesson Provider Technologies form a core of vendors that will continually compete for a top five position below GE Healthcare in this market.

Market Analysis



Approximately 20 percent of all US hospitals have contracted for, or installed a CPACS solution. Half of hospitals that perform over 100,000 radiology procedures have implemented a CPACS solution, while 50 percent of hospitals that perform 50,000 99,999 procedures have also installed a CPACS solution. About 40 percent of all hospitals over 400 beds have implemented a CPACS solution.The majority of CPACS contracting and implementation was done between 2003 and 2005, with 2004 and 2005 having the same implementation rates.

Market Analysis



There are two reasons that the CPACS market is not mirroring the adoption rates that have been experienced in the RPACS market:

- CPACS images are digital and are not replacing a film based medium that will result in huge cost savings, like those experienced with RPACS.

- Cardiology information systems (CIS) have not been implemented across the majority of the cardiology market, and if CIS applications serve as a foundation for CPACS, like RIS did for RPACS, then this will slow down the market adoption of CPACS.

Market Analysis



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MARKET OVERVIEW