Let’s Go Digital!? – The Future Direction of Radiography in Germany

Author: Uwe Buddrus, Managing Consultant Germany

In a landmark study, HBS Consulting has undertaken to conduct a census of installed conventional radiographic equipment and has assessed future investment plans and motivations of customers. One of the primary objectives of the study was to determine the future development of radiography quantitatively and qualitatively, specifically with regards to Computed Radiography (CR) and Direct Radiography (DR).This article is based on some of the findings in the German market.

Germany is the largest European market for radiography equipment and the European leader in terms of x-ray examinations per capita. On average, every German citizen is x-rayed 1.7 times per annum, resulting in approximately 136 million images per year. In contrast to other European countries, a large share of these examinations is performed by so called partial radiologists such as orthopaedists, gynaecologists, cardiologists, urologists, internists and general practitioners. Partial radiologists account for almost 80% of all conventional x-ray examinations, which means that they are a significant target group for x-ray equipment. However, when the quality of radiographic services is considered, high-end imaging such as CT and MRI is primarily performed by full radiologists in hospitals and radiologist practices or imaging centres, while partial radiologists mainly use conventional x-ray and ultrasound. This already indicates that a similar situation may be found in the current level of digitalisation of x- ray equipment.

In fact, at present, digitalisation of x-ray equipment is most advanced in hospitals, followed with a clear distance by radiologist practices, while partial radiologists – based on the examples of orthopaedists and urologists – are still a long way from any significant extent of digitalisation. However, even within the individual customer groups significant differences exist between sub-segments and applications. The following chart provides an overview over the current situation in German hospitals.

Source: HBS Consulting

Digitalisation is most advanced in R&F systems, with over 70% of x-ray installations - almost two thirds of systems in small hospitals and over three quarters of systems in large hospitals. All other system types are still primarily analogue in small hospitals, with shares of 80 to 90%, while a higher level of digitalisation can be observed in large hospitals. Here, only mammography systems are predominantly analogue. Direct radiography is still rare in small hospitals, while such equipment accounts for shares of 12 to 26% in large hospitals.

In comparison to hospitals, where 32% of stationary installations (excluding C-arms) in general radiography, R&F mammography and of systems in A&E, ICUs or ORs are digital, this share is just over 20% in radiologist practices. Every practice has at least one analogue image output system, while between 15 and 30% have computed radiography systems. Direct systems are still extremely rare in radiologist practices. The above chart shows the shares of image output system types for dedicated system installations in radiologist practices.

The chart below shows a clear pattern for the current utilisation of digital equipment. In private radiologist practices, digital equipment is most common for R&F systems, accounting for almost half of all installations. General radiography and dedicated orthopaedic and chest systems are still primarily analogue, but here exists a small share of computed radiography systems and possibly also direct installations. It can be assumed that there will also be a small share of computed and direct radiography mammography installations, but here digitalisation is clearly least advanced.

Source: HBS Consulting

Coming to partial radiologists, the level of digitalisation is even lower than in radiologist practices. Overall, just 4% of orthopaedist practices possess any digital equipment, while no evidence for an installed base of digital equipment was found in urologist practices. The following chart shows the shares of image output system types in orthopaedist practices.

Source: HBS Consulting

Again, significant differences exist between customer sub-segments: the level of digitalisation in the 3,000 single orthopaedist practices is extremely low, while around 20% of group practices possess digital radiography equipment, of which computed radiography represents around two thirds.

In the determination of the future direction of digitalisation two aspects are to be considered: firstly the attitude of end users regarding digital radiography, and secondly the translation of this attitude into action. HBS Consulting has assessed the perceived need for analogue, computed and direct radiography solutions by means of a rating on a scale of 1 to 5, whereby 1 represents ‘no need’ and 5 a ‘strong need’. While it could be expected that – given the choice without direct consideration of costs – most respondents would opt for the most advanced option, this was not the case. The following table provides an overview of the average ratings of the main target groups under investigation. Need for Digital Radiography Solutions, 1 (none) to 5 (strong)

Source: HBS Consulting

There is a relatively strong need for digital radiography solutions, particularly in large hospitals. It appears that computed and direct radiography equally fulfil hospital needs. While large hospitals clearly perceive analogue radiography as inadequate for their needs – 1 was the most frequent rating for analogue, compared to 5 for computed and direct radiography – this perception is less strong in small hospitals.

Surprisingly, radiologist practices see neither a strong need for digital radiography solutions, nor a preference. Around 30% state that analogue solutions are inadequate for their needs, while 25% claim these to best fulfil their needs. It appears that computed radiography solutions are clearly preferred within the radiologist practice. Only 5% of respondents claim that this is an inadequate solution, arguing that this is an “innovational dead-end”. In contrast, 50% of respondents feel that computed radiography fulfils their needs. Interestingly, only 25% of owners of computed radiography equipment think so, while 62.5% of them believe a direct solution services their requirements better. Direct radiography is viewed most controversially. Of the interviewed respondents 35% see no need for direct solutions, while 50% specified a requirement within their daily practice. Interestingly, there is no correlation between the monthly number of examinations and the perceived need for a direct solution.

A relatively strong (perceived) need for direct radiography solutions can be observed in orthopaedic practices, whereby the differences between single and group practices are not significant. Direct radiography is recognised as the best technological solution to radiographic imaging needs, while computed radiography is seen as an ‘interim’ solution. It is expected that DR will become the technology of the future, which indicates that the short term sales potential will not reflect the strength of the perceived need.

In contrast to orthopaedists, urologists have neither a strong desire to seek installation of digital radiography solutions, nor a preference for these systems. The main argument for analogue systems is that they are most appropriate for private practice needs. The relatively high rating for computed radiography systems can probably be attributed to the fact that the existing equipment does not need to be replaced in order to upgrade to a digital solution. Since digitalisation is not seen as a factor driving investment decisions, the relatively high rating here may be seen as an indicator for some consciousness about technical progress. Direct radiography is not considered to be an important installation requirement in urologist practices. The few high ratings reflect the awareness of the advantages direct systems offer – such as improved image quality, easier archiving and reduced image development costs – more than the actual need for such solutions.

Having seen that different target groups observe a different need for digital radiography, it will be interesting to compare the attitude of end users with actual investment plans. The following chart provides an overview of the share of analogue, computed and direct radiography systems in concrete investment plans.

The chart below shows that most specific investment plans are geared towards digitalisation in all customer segments. This largely reflects the findings regarding the perceived need for digital equipment. Source: HBS Consulting

Small hospitals are more inclined towards computed radiography, while large hospitals tend to acquire more direct radiographic equipment. For example, two thirds of investment plans for general radiography equipment in small hospitals are targeting computed systems, compared to almost half of large hospital plans aiming at direct radiography solutions.

The actual investment plans in radiologist practices reflect the expected need for digital equipment. Just over one quarter of investment plans are targeting analogue equipment, and computed systems are more often chosen than direct systems, whereby some of the reluctance to buy direct equipment is attributable to cost restraints.

As indicated by the need rating, there are indeed more plans to acquire digital equipment among orthopaedists than radiologists in private practice. However, although no major differences between single and group practices in the perceived need for digital equipment were apparent from the rating, significant differences exist in the actual plans. Over a quarter of single practice plans target analogue systems, while group practices primarily target digital equipment. In both segments computed systems are clearly more often planned.

However, while the findings regarding the direction of radiography do sound encouraging, this must be seen in the context of total planned investment volumes.

The vast majority of future investments are in replacement equipment, but in hospitals planned investments are way below the required replacement rate – even according to the life span expected by end users of the equipment – setting aside the set of "Golden Rules" proposed by COCIR as a guideline for investment policies. Hospitals put off new investment until equipment breaks down or until a replacement is inevitable for other reasons. The total planned investment volume (over the next 5 years) is about 600 installations. Despite relatively heavy recent investments the age profile of current equipment is still unfavourable, so that it can be safely assumed that actual plans will be exceeded by future investments.

Investment plans exist in 20 to 35% of radiologist practices, also primarily in replacement installations. The total volume of investment plans is estimated at over 900 installations over the next 5 years. The replacement potential based on the average expected life span is considerably lower than the actual replacement rate, which indicates an improvement in the age profile. Considerably less potential exists for new installations.

A similar share of orthopaedist practices (28%) plan investments, resulting in a planned investment volume of over 800 installations over the next 5 years, which is slightly below the replacement potential. Additionally, good potential results from investments by newly established practices.

Urologist practices consider the acquisition of x-ray equipment as a once- in-a-lifetime issue. Therefore potential exists only in new practices or practices that currently do not possess x-ray equipment. Since urologists do not perceive a strong need for digitalisation, it is unlikely that this segment will offer much potential for suppliers of direct solutions.

In summary, there are extreme variations in the current degree of digitalisation of German radiography equipment. However, German radiologists in hospitals and practices clearly show the will to move towards digitalisation as indicated by concrete investment plans. The underlying motivations vary greatly and such decisions are not necessarily driven by the primary benefits of digital equipment such as workflow improvements. Especially for the full realisation of the opportunities offered by external digital image handling there is still a long way to go. The shift from analogue to digital handling of images is a clear trend that has been noted in the major global markets. What this study clearly demonstrates is the fact that investigation, at the grass roots level, of the timelines of change to wider adoption of digital DR solutions offers an interesting insight into market dynamics and opportunities.