NIST GCR 03-844 Low-Cost Manufacturing Process Technology for Amorphous Silicon Detector Panels

NIST GCR 03-844
Low-Cost Manufacturing Process Technology for Amorphous Silicon Detector Panels: Applications in Digital Mammography and Radiography

5. Market Analysis

U.S. medical imaging services are provided through 2,300 large hospitals and 3,300 free-standing diagnostic imaging centers and chains (DICs). Free-standing DICs are owned by professional radiologist groups, partnerships with hospitals, and for-profit corporations. Thirty-seven percent of the DICs are located in four states: New York, Florida, Texas, and California. All states have at least one operational DIC, except Vermont (SMG Marketing Group, 2000).

Hospital and DIC imaging centers employ more than 14,000 radiologists (Firstmark, 2001). “Procedure growth and the aging of the population are increasing demand for radiologists at 4 to 5 percent per year and the supply of radiologists is projected to fall short of growing demand levels. The American College of Radiology projects continued acute shortages until 2018 and is actively promoting new technologies and procedures to increase radiologists’ productivity to offset projected shortages” (Wagner, 2001).

In addition to rapid growth, the medical imaging sector is subject to cost pressures, as well as increased competition from nonradiologists performing imaging procedures. Cardiologists are performing vascular diagnostic procedures, obstetricians are running their own ultrasounds and sonograms, and orthopedists are X-raying patients’ bones. Cost pressures and competition from other medical specialties are forcing consolidation of radiologist practices. In 2000, 37 percent of DICs consolidated their operations (SMG Marketing Group, 2000).

MAMMOGRAPHY EQUIPMENT MARKET

As of 2000, the installed U.S. base of mammography units (including conventional film and full-field digital systems) was 15,300. Worldwide installed base was approximately 30,000 units, with 10,270 units in Europe (Garcia, 2001).

The 2002 global market for mammography equipment sales is projected to be $339 million. The North American market leads with 51 percent of total market sales, and this market is expected to grow at a compound annual rate of more than eight percent during the 2002–2007 period. Europe has 38 percent of the market, and the European market is expected to grow at a compound annual rate of more than 10 percent. The rest of the world represents less than 11 percent of the global market, and is expected to grow at more than 20 percent per year. North American and European market shares can be attributed to national breast screening programs in operation or in various stages of planning. Japan is also expected to implement a breast screening program within the 2002–2005 timeframe (Garcia, 2001).

Projected growth rates of U.S. and worldwide mammography equipment sales reflect several market drivers: the need to replace aging inventory of SFM systems operating beyond design economic lives, FDA-mandated quality enhancements, and the desire of leading hospital-affiliated and DIC imaging centers to acquire state-of-the-art FFDM units (Garcia, 2001).

DIGITAL MAMMOGRAPHY MARKET

During the last four decades, the medical imaging industry has been gradually replacing film-based imaging technologies with digital technologies. CT scanners became available in the early 1970s. They generate digital signals for computer processing. MRI followed in the early 1980s, also tied to digital signals and computers. Based on decades of experience with digital data acquisition and computers, doctors and radiologists have become increasingly familiar and experienced with computer-based medical imaging.

The recent commercial introduction of GE’s FDA-approved Senographe 2000D FFDM system, and a high level of activity among GE competitors with their own digital mammography products, indicate that the long expected digital revolution in mammography has arrived. “The array of full-field digital mammography products at this year’s Radiological Society of North America meeting ranges from systems on the cusp of commercialization to those that are currently undergoing clinical trials” (RSNA, 2001).

“The vendors of imaging equipment are committed to digital X-ray. They have little choice. The practice of medicine is growing increasingly dependent on computers and networking” (Freiherr, 1999). To be cost effective, healthcare facilities must maximize their installed local area networks by moving all X-ray imaging modalities—mammography, cardiac imaging, and chest/body radiography—to digital technology.

The digital mammography market is evolving into a three-tiered structure.

FFDM units with a-Si and selenium detector panels represent the premium quality market segment.
Tiled CCD units using crystalline detectors represent the less expensive, middle tier of the FFDM market. “Most places going with CCDs are small radiology clinicswho want to get some of the benefits of DM but do not have the high volume and productivity requirements to purchase a premium a-Si FFDM unit” (Schubert, 2002).
Small-field digital mammography (SFDM) using single CCD crystal detectors for partial imaging of the breast represents the third tier. The target application for SFDM units is diagnostic rather than screening mammography.

GE is the market leader for the high-end digital mammography tier with the FDAapproved Senographe 2000D unit. Other significant market participants include:

Fischer Imaging: Recently received FDA approval for SenoScan CCD system using slot scanning technique (Fischer Imaging, 2001).
Hologic and Siemens: Agreed to form a FFDM alliance. Hologic will supply amorphous selenium flat panel detectors for incorporation in Siemens mammography units.
Hologic’s LORAD division: Filed for FDA approval for a separate CCD system.
PlanMed: Finnish mammography equipment firm, working on a slot scanning CCD system.
Fuji: Showcased its FCR 5000MA system, currently available in Europe and Asia, using a dual-side reading feature allowing X-ray information to be simultaneously recorded on both sides of the plate.
Sectra: Swedish firm MicroDose Mammography system is in clinical tests in Stockholm. Sectra claims that the system can achieve same image quality as conventional film systems, but at one-fifth the radiation exposure.
Internazionale Medico Scientifica (IMS): Giotto FFDM system in clinical trials.

European competition is expected to be an important factor in shaping industry market dynamics and challenging GE dominance of the U.S. FFDM market (Katz, 2001).

In the context of the above market dynamics and tiering structure, Table 3 provides U.S. unit sales projections for the GE Senographe 2000D. Sales projections through 2007 are excerpted from a recent Frost and Sullivan market study that indicates a dramatic 600 percent increase in FFDM sales during the 2004–2007 period. Beyond 2007, we extrapolate unit sales at 10 percent per annum through 2010 and at five percent per annum through 2014. GE’s U.S. market share is estimated on the basis of expert industry input, reflecting the expectation that competitive trends will reduce GE’s market share to 60 percent by 2012.

The FFDM sales projections in Table 3 constitute the counterfactual case of expected sales levels without the ATP-funded LCM process. These counterfactual projections reflect significant near-term barriers to the rapid adoption of FFDM systems.

According to Frost and Sullivan (Garcia, 2001), these barriers include:

Limited U.S. customers for new mammography installations. Unit sales will be replacement driven with minimal growth in new installments.
Consolidation, leading to facility closings and service reductions in less attractive locations, further reducing customer base and increasing competition.
High first cost of installed FFDM systems, reflecting substantial research and development (R&D) investments, greater system complexity, and minimal price competition initially. As R&D investment is recovered and competition is energized, significant reductions in first-installed costs are expected.
Financial success of mammography vendors depends on the financial health of their customers, reflecting available Medicare and private insurance reimbursement patterns.

Table 3. Projected U.S. Sales of FFDM and Senographe 2000D Units Without ATP-Funded Low-Cost Process: Counterfactual Case

Year	Projected FFDM Unit Sales	GE Senographe 2000D Market Share	GE Senographe 2000D Unit Sales
2002	57	100%	57
2003	63	90%	57
2004	74	90%	67
2005	111	80%	89
2006	200	80%	160
2007	440	70%	308
2008	484	70%	339
2009	532	65%	346
2010	559	65%	363
2011	587	63%	370
2012	616	60%	370
2013	647	60%	388
2014	679	60%	407

Source: 2001–2007 FFDM unit sales, in the first column, are from Frost and Sullivan (2001). Beyond 2007, FFDM unit sales are independently estimated.

Changing Financial Barriers for Digital Mammography

Low reimbursement rates make if difficult for healthcare providers to recover the high initial cost of FFDM units. Recent increases in reimbursement rates, including a 50 percent higher reimbursement rate for digital mammography, are expected to help.

Medicare Reimbursements: Health and Human Services’ Centers for Medicare and Medicaid Services recently issued final rules for 2002 mammography reimbursements for conventional film and digital mammography. Medicaid reimbursements tend to follow Medicare.

Plain Film	Digital Mammography	Approved Increment for CAD	Digital Mammography CAD Plus
$90.50	$133.58	$17.74	$151.32

Source: Centers for Medicare and Medicaid Services (2002).

HMO and PPO systems: Member benefits typically include screening mammography services with little or no co-payment. However, cost pressures may mitigate against buying premium FFDM systems.

Private Health Insurance (Blue Cross/Blue Shield): “All states except Utah enacted legislation for screening mammography coverage, either mandating coverage or mandating that coverage be made available” (National Cancer Institute, 2001b). There is substantial interstate variability on implementation.

CHEST RADIOGRAPHY MARKET

In the United States, 68 million chest X-rays are performed each year with conventional photographic film technology. Table 4 presents U.S. sales projections for digital chest radiography and GE Revolution XR/d units under the counterfactual situation, where the ATP-funded low-cost process has not been deployed. The reduced dosage and productivity benefits of digital radiography are becoming increasingly recognized by medical professionals and business managers. However, the high equipment cost of digital technology relative to conventional radiography is a significant barrier to widespread clinical use. The 25 percent reduction in the cost of a-Si detector panels due to the ATP-funded LCM process is likely to enable additional sales in the extremely price sensitive radiography system market and therefore have a significant impact in providing patients and healthcare facilities access to the dosage and productivity benefits of digital technology.

Table 4. Projected U.S. Sales of Revolution XR/d Units Without ATP-Funded Low-Cost Process: Counterfactual Case

Year	Projected Digital Radiography Unit Sales	GE Revolution XR/d Market Share	Projected GE Revolution XR/d Unit Sales
2002	158	50%	79
2003	183	50%	92
2004	222	50%	111
2005	299	50%	150
2006	438	50%	219
2007	689	50%	345
2008	758	50%	379
2009	834	50%	417
2010	917	50%	459
2011	1000	50%	500
2012	1000	50%	500
2013	1000	50%	500
2014	1000	50%	500

Source: 2002–2007 Digital Radiography unit sales, in the first column, are from Frost and Sullivan (2002). Beyond 2007, unit sales are independently estimated.

MARKET SUMMARY

The market analysis was based on extensive fact finding in the medical equipment, medical imaging services, and private medical insurance industries as well as government laboratories and social service agencies.

The market analysis indicates that the deployment of digital imaging technologies at leading U.S. medical institutions and free-standing diagnostic imaging centers will be subject to:

Limited demand for new X-ray installations. Most equipment sales will be replacement driven.
High equipment cost of new digital mammography and radiography systems.
Financial health of the healthcare industry, subject to Medicare and private insurance reimbursement patterns.

Given these market dynamics, the ATP-funded LCM process is expected to have a substantial impact on lowering equipment costs, facilitating accelerated deployment of digital systems and making the benefits of these systems available to patient populations that would not otherwise have access to those benefits.

Return to Table of Contents or go to Section 6. Economic Analysis.

Date created: April 25, 2003
Last updated: August 2, 2005

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