Client Forum - Siemens Medical Solutions
Author: Dr Akmal Bhatti,Director of Strategy and Business DevelopmentSiemens Medical Solutions is one of the leading players in the healthcare IT market. It continues to play a key role with products that will change the healthcare IT landscape, with the Soarian product range being an important example of how Siemens approaches the problem of providing the platform for the highly integrated healthcare IT solutions of the future. Having published two reports in the healthcare IT area in 2002 and in line with HBS Consulting’s continuing review of developments in this sector we present a brief overview of a discussion between Dr Akmal Bhatti of HBS Consulting and Dr Ulrich Viethen and Dr Jürgen Kreß; two senior executives within the Image Management Systems division of Siemens Medical Solutions in Erlangen, Germany.
Interviewees:
Dr Ulrich Viethen - Group Vice President Health Services, Image Management Systems
Dr Jürgen Kreß - Director of Marketing Health Services, Image Management Systems
Dr Bhatti: Radiologists have been demanding an integrated RIS/PACS solution for a number of years. Why has it taken market participants so long to bring this product to market?
Dr Viethen: I think that there is a split between two groups within our customer base here. One group seems to prefer to follow what we call the "best-of-breed" strategy. In their eyes they purchase "best-of-breed" components and assemble them on their own. They create a functioning system in which they make sure that all the interfaces are working closely together by their collaboration with a known team, i.e. the system integrator. This is one of the strategies that have been deployed by the purchasers. The other strategy recognizes that integration is a complicated as well as a complex undertaking or process. Therefore, if you gradually scale-up the system it is automatically recognised that you are not doing a good enough job. In review, you have the group of purchasers who look to buy integrated products that means that the interfaces, over time, will be maintained and will perform better or in line with developing communications and security standards. The Bandwidth of information is broader if the purchaser buys integrated systems than if the purchaser integrates on a standard level and relies on interfacing two separate and perhaps ultimately incompatible systems. In looking at the two major mainline strategies that you will find in the market; I think that Siemens has for the past 4 to5 years reacted to the “we need an integrated solution” demand by developing a solution that provides a RIS which went together with a PACS on the same database. This provided Siemens with a large number of installations as it was pretty Avant Garde at the time. The ideas for this came from an Austrian hospital that was mainly involved in providing a radiology service and requested an information system for the entire hospital which would link the information gathered from 10-15 modalities. We developed the required solution and the project was a considerable success. After the completion of this project we realized we had unfolded t the first integrated RIS/PACS product. The success in the market showed that this was the correct direction to take and you will see today that all the main vendors claim that they can offer an integrated RIS/PACS. I think that for majority of the vendors you can say that they have two products which they can package or tailor together, which is different to how Siemens solved that particular problem. The Siemens product is so deeply integrated that you cannot define the border between the components …the RIS from the PACS. This creates and holds the value for our customers. I recently visited a customer deploying an emergency room application for the RIS and PACS and their lead time for an average patient in the ER radiology setting was less than 5 minutes. This was purely due to the fact that this high integration allows them to be faster in getting any picture out of the archive, bundle it with the new images, and send it to the surgery department, operating room or wherever it is required. This degree of integration is the pre-condition for the successful bundling of both systems. The industry has seen it, has reacted and I feel that the true integrated systems are the ones that show that the strategy adopted by the purchaser group, which has waited eagerly for integration, has been the correct one. Taking a simple analogy….Newton described the laws of gravity and we know that forces of gravity cannot be defied. Similarly, in the IT sector you cannot defy the need to integrate systems and you cannot provide sustainable solutions in any industry sector and this is something that we believe in strongly.
Dr Bhatti: While we are on the subject of integration, would you say that if a company can display leadership in providing a RIS/PACS product that the same company is well-equipped to take advantage of emerging opportunities in the provision of more highly sophisticated EPR/EHR solutions? Siemens, as an example, seems to be one of the companies capable of taking a lead in the area using its Soarian product as a platform.
Dr Viethen: It is possible to start with this RIS/PACS integration and you learn a lot regarding the EPR if you take this route. This is the case even when you start with a departmental solution. The strategy which we are following with the product we have in our HIS portfolio, Soarian, is that we really look at the total integration problem and the total amount of information which needs to be integrated and we use the RIS/PACS part as the nucleus. It is the nucleus, but it is not the only starting point for the EPR or enterprise solutions.
Dr Kreß: If you look at the R&D efforts of the last few years and the way that IT has changed healthcare delivery it is clear that the use of PACS has been the most important driver in this process. So I think that even though there might be other nuclei for the move toward EPR, naturally if we can continue our pace of innovation in the radiology setting…..and that is what we see in the evolution of our products….. then that is a natural extension of the developments of the last few years and for the future.
Dr Bhatti: Given that radiologists have a familiarity with RIS/PACS then it is logical that proven products in this sector should make it easier for physicians to then accept the use of more complex and sophisticated systems such as EPR.
Dr Viethen: Absolutely. I think that this is the ultimate test for your infrastructure. The amount of data which you are moving with regard to digital imaging is the highest of the necessary components of a modern HIS solution.
Dr Bhatti: What is, or will be, the role of wireless and hand-held applications for image management or for healthcare delivery in general in the European market?
Dr Kreß: Personally, I am aware only of a few companies that work on mobile solutions and are close to putting it on the market. Typically, they started developing their solution from the HIS side, from what we might refer to as the alphanumerical part of the EPR which is eventually being brought to the bedside by mobile applications. First of all with these applications you are going to experience bandwidth problems and you also have a problem with display quality depending upon the device that you use. So I would not regard this as a typical short term driver in the imaging area. However, in the mid term it is going to be part of the picture.
Dr Viethen: Last year, for the first time in the industry, we presented a mobile solution for a web-client where you could access the image database. However, Dr Kreß is entirely correct when he states that the time needed to obtain the resolution and ease of use on hand-held terminals to help in report work is some way off. However, there is one way in which they really add value and this is what we showed when we presented the web-client solution at our booth at RSNA in 2001. It is something that, when you display images at the bedside, underlines the competence of the doctor. For example, a doctor has the capability to show an image to a patient and explain measurements or tests which he may need to perform to the patient using images - nothing more than that. However, this has an impact on the standing of the doctor in the eyes of the patient and doctors like these applications due to this factor. However, the use of these applications do not change the workflow dramatically when you talk purely about imaging they support the doctor-patient relationship. In terms of workflow there is enhancement of this when you use the mobile application to view images when connected to RIS or HIS systems.
Dr Bhatti: On the topic of workflow, how important is it to provide information such as this and information relating to return on investment when pitching a sale of RIS/PACS systems to purchasers?
Dr Kreß: Naturally, given the limitations through the reimbursement systems which you find globally, you have at least two main groups. The first group is strongly regulated by government and/or is driven by very cheap labour costs such as in China or Russia. In those countries it is rather the integration or peace of mind which you buy through purchasing an integrated solution which is the most important factor in the purchasers’ decision making. There is a growing move, stemming somewhat from the US which is economically driven. We will see here in Europe upcoming DRG implementations which will absolutely focus on optimising workflow. So in Germany for example it will be very important to provide this sort of information to show that there is a cost saving element to purchasing integrated solutions.
Dr Bhatti: You mentioned China and Russia briefly. Do you envisage those markets as providing expanded opportunities for RIS/PACS or PACS solutions?
Dr Viethen: Absolutely. I think that these are regions where there are, without doubt, major opportunities for companies such as Siemens to provide these products.
Dr Bhatti: When we speak of innovation, although it is the larger companies such as Siemens Medical Solutions, Philips Medical , Agfa Healthcare and GE Medical which dominate the image management markets, there is still a role for smaller, RIS and PACS software providers in this space. What would you say to these companies in order that they might compete better for the attention of the larger players when it comes to potential alliances and collaborations?
Dr Viethen: If you consider novel market opportunities then we have seen the emergence of a number of innovative ideas that were condensed to the point where a product emerged. The degree of innovation that derives from efforts within these companies was, and still, is very important to the healthcare and IT markets. So I admire the fact that these companies rapidly push forward their ideas into products that we can begin selling in the marketplace. If you ask me for my advice for companies operating in this area with ideas on the levels we have discussed I would say that there is high risk here. If you do not possess the IT knowledge coupled with the knowledge regarding the workflow in hospital departments and you cannot build that then it is difficult to succeed in the healthcare IT market in the long run. In the short term you can provide solutions for small groups of people in the hospitals and they will be happy with that. The moment you have to educate more people, the moment you have more people in the organization and the moment where there becomes a need to change the IT infrastructure and think about the integration of larger solutions the small solutions identify themselves as difficult to integrate. There are certain clear limitations in some products. This is a danger for these small companies. Nevertheless, I am sure that they have a role in this market in bringing innovation and products to companies that have more of a focus on providing the technologically sustainable and integrated solutions to the healthcare sector. If these companies can formulate medical knowledge in a way that can be accessed easily through queries and other databases that is something having high value which can be, and must be integrated into more complex systems. Companies utilizing medical knowledge with IT knowledge, with the latter being the commodity in the overall equation, have the capability to be successful in the market and to be attractive to larger companies in terms of the products that they may develop. So I see a continuing real role for smaller software houses in the healthcare IT sector.