Abstract

In its 1995 General Competition, the Advanced Technology Program (ATP) co-funded a joint-venture project involving two U.S. companies, General Electric Global Research (formerly General Electric Corporate Research & Development) and PerkinElmer, Inc. (formerly EG&G Reticon), to develop a low-cost manufacturing process for fabricating amorphous silicon detector panels for digital mammography and digital radiography systems. The project was successfully completed in 2000. Following some additional investment in completing tasks needed for commercial production, implementation is expected by 2004.

Market analyses show that healthcare professionals and business managers are becoming aware of the benefits of converting to digital imaging technologies. These analyses show further that the ATP-funded low-cost manufacturing process is well positioned to directly impact digital mammography and digital radiography equipment costs, making the benefits of digital imaging available to more patients and healthcare facilities.

This case study estimates the following measures of societal economic benefit from the ATP investment in the low-cost manufacturing technology:

• Net present value of ATP investment: $219 million to $339 million (2002 dollars).
• Internal rate of return (public return) on ATP investment: 69 percent to 77 percent.
• Benefit-to-cost ratio of ATP investment: 125:1 to 193:1.

These measures reflect the estimated benefits to healthcare industry users and patients relative to the ATP investment. Estimated benefits to General Electric Company and PerkinElmer are excluded.

Additional qualitative and quantitative benefits are reported.

Based on primary research and analysis completed during 2001 and early 2002, the study concludes that:

• Broad-based benefits to patient populations and to the healthcare industry have a strong probability of being realized.
• ATP’s industry partners would not have developed the high-risk, low-cost process technology without ATP support.
• These benefits are directly attributable to the ATP investment.

Acknowledgments

We would like to acknowledge Jeanne Powell, Gerald Ceasar, and Stephanie Shipp (NIST Advanced Technology Program); Lewis Edelheit, Brian Giambattista, George Possin, Cynthia Landberg, Peter Menditto, Michael Brown, and Don Ingraham (General Electric Global Research); Scott Schubert (General Electric Medical Systems); and Steve Strunk, Tier Gu, and David Gilblom (PerkinElmer) for helpful comments relative to data collection, analysis, and the interpretation of case study results.

Executive Summary

In its 1995 General Competition, the Advanced Technology Program (ATP) funded a joint-venture project involving General Electric Global Research (formerly General Electric Corporate Research & Development) and PerkinElmer, Inc. (formerly EG&G Reticon), to develop a low-cost manufacturing (LCM) process for fabricating amorphous silicon (a-Si) detector panels for digital mammography and digital radiography systems. The project was successfully completed in 2000 and implementation is expected by 2004.

The new low-cost process will be less complex than current panel fabrication, and will reduce detector costs by 25 percent, increase the affordability and clinical availability of digital mammography and radiography systems, and provide more Americans access to the medical and economic benefits of digital imaging.

This Executive Summary describes the results of a case study of the ATP-funded LCM project, the history of the project, an assessment of medical and other applications, and an analysis of economic impact. Case study research, analysis, and conclusions were completed during 2001 and early 2002.

DEVELOPMENT OF THE LOW-COST PROCESS

Thirty-three million mammography procedures are conducted every year to screen American women for asymptomatic breast cancer. Sixty-eight million chest X-rays, or radiography, are performed each year to diagnose a variety of medical conditions.

Conventional X-ray screening mammography and radiography capture images of the breast and chest area on photographic film. While conventional X-ray is generally effective, it has diagnostic limitations and only limited potential for improved productivity. The new digital mammography and radiography systems are innovative technologies to address the diagnostic and productivity limitations of conventional X-ray.

Digital imaging provides a range of benefits to patients and healthcare facilities, including higher patient throughput, improved diagnostic capability, less patient exposure to radiation, near real-time connectivity for remote expert consultation, and lower operating cost. At the same time, digital mammography and radiography systems are expensive, and equipment cost is an important barrier to widespread clinical availability.

General Electric Company (GE) was an early pioneer of digital imaging for medical applications and has developed an FDA-approved digital mammography system (Senographe 2000D) and an FDA-approved digital radiography system (Revolution XR/d). A key component in both systems is a full-field photosensitive detector plate large enough to capture the entire breast or chest area in a single image. Detector plates are fabricated as integrated circuits, utilizing thin-film a-Si semiconductor layers. Fabrication involves a complex photolithographic deposition, patterning, and etching process. Fabrication complexity contributes to the high cost of detector plates and the limited clinical availability of Senographe  2000D and Revolution XR/d units.

To reduce process complexity and equipment cost and to increase clinical availability, GE Global Research (GEGR) proposed the development of an innovative LCM process for internal GE funding. LCM would be a breakthrough technology involving dual use layers for interleaved fabrication of the photosensitive diode and the thin film transistor element, without compromising either diode or transistor performance.

The proposal was viewed by GEGR management as an unfundable, high-risk proposition associated with the following technical uncertainties:

• Could processing be developed to substantially reduce the number of process steps without compromising detector performance?
• Could the photodiode device be deposited at the same temperature as the transistor without degrading detector performance?
• Could data lines be properly insulated to facilitate low noise readout?

GE Global Research, together with PerkinElmer (PKI), its strategic manufacturing partner for detector fabrication, submitted a proposal to the ATP to cost share the development of the high-risk LCM technology.

In its 1995 General Competition, the ATP selected the GEGR/PKI joint-venture proposal for an award to develop an improved LCM process for full-field a-Si devices to be used in medical imaging systems and other applications. The ATP agreed to cost share $1.575 million of the $3.438 million project. GEGR and PKI committed to fund the balance.

The ATP-funded project was successfully completed in 2000, setting the framework for less complex fabrication with fewer mask steps (seven versus eleven) and fewer total process steps (200 versus 300). Reduced complexity would increase production yields and reduce manufacturing cycle times. It was estimated that LCM would provide manufacturing cost savings in excess of 25 percent.

While the low-cost process was demonstrated to be technically feasible, all risks have not been fully retired. Some additional GE and PKI investment will be required to complete remaining technical tasks, and GE and PKI have yet to finalize their decision to implement the process. Critical decision factors are expected to be:

• Demonstrated technical feasibility.
• Growing market demand for digital imaging.
• Competitive pressures to reduce component (detector) costs.

These factors are currently evolving to support a business decision to complete technical development and implementation.

MARKET ANALYSIS

As part of this case study, an analysis of digital mammography and digital radiography market opportunities was completed to provide a basis for estimating the prospective economic impact of the low-cost process technology. Market analysis used extensive fact finding in the medical equipment, medical imaging services, and private medical insurance industries as well as government laboratories and social service agencies.

Healthcare professionals and business managers are generally becoming aware of the benefits of converting to digital imaging technologies. These benefits include increased patient throughput, enhanced diagnostic capabilities, reduced radiation dosage, reduced operating and patient costs, and near real-time consultation with remote radiologists. At the same time, medical professionals and managers are apprehensive about the complexity of new digital technologies, learning curves, high equipment costs, and the current lack of price competition.

Given these market dynamics, the ATP-funded LCM process is well positioned to directly impact digital mammography and digital radiography equipment costs, facilitate the deployment of additional digital systems, and make available the benefits of digital imaging to more patients and healthcare facilities.

ECONOMIC IMPACT

The case study identifies medical benefits for patient populations and broad-based economic benefits to the U.S. economy from an ATP-funded LCM process technology. The study examines the effects of improved productivity, reduced false-positive findings (showing abnormal results when cancer is not present), avoided patient costs, improved diagnostic capabilities, opportunities for remote teleradiology applications, and cross-industry knowledge diffusion from ATP-funded innovations. Benefits are estimated for a conservative base case and an alternative step-out scenario.

To assess economic impact, the case study estimates the number of additional Senographe 2000D and Revolution XR/d units that would be deployed given the availability and use of the ATP-funded low-cost process technology, as compared to a counterfactual case without the ATP-funded technology. Under the base case, the study projects the cumulative deployment of 159 Senographe 2000D units and 175 Revolution XR/d units beyond the counterfactual case during the 2005–2014 period. Under a more optimistic "step-out" scenario, the case study projects the deployment of 17 percent additional units (27 additional Senographe 2000D units and 29 additional Revolution XR/d units) beyond the base case. These projections for the base-case and step-out scenarios were based on discussions with equipment vendors and healthcare industry participants and serve as key assumptions in the analytical framework for quantifying economic benefits.

For the two scenarios, the case studies quantify the economic benefits of these additional Senographe 2000D units and Revolution SR/d units deployed as a result of the ATP-funded low-cost process. Quantified economic benefits of additional Senographe 2000D units include:

• Cost savings to healthcare facilities from the reduction in the number of unnecessary medical procedures, the doubling of the rate of patient throughput, and the reduction in costs for retrieving and managing digital mammograms and attendant medical records.
• Cost savings to patients from fewer lost work hours, attendant lost wages, and travel costs.

Quantified economic benefits from additional Revolution XR/d units include cost savings to healthcare facilities from the increased rate of patient throughput and the reduction in records management costs for retrieving and managing digital chest X-rays and attendant medical records.

Using these cost savings from the deployment of additional Senographe 2000D and Revolution XR/d units, the case study estimates prospective cash flow benefits measured in 2002 dollars and projects several measures of the public return on ATP’s investment: net present value, internal rate of return, and benefit-to-cost ratio. These measures reflect the benefits to healthcare industry users and patients relative to the ATP investment. For the base-case scenario, the study estimates a benefit-to-cost ratio of 125:1; that is a return of $125 for every dollar of ATP investment. The internal rate of return (public return) on the ATP investment is 69 percent, and the net present value of ATP investment is $219 million. For the step-out scenario, the study estimates a benefit-to-cost ratio of 193:1, an internal rate of return of 77 percent, and a net present value of $339 million.

In addition to substantial public benefits to the U.S. economy, the case study estimates private benefits to GE and PKI from implementing the LCM process technology and generating additional Senographe 2000D and Revolution XR/d unit sales. The magnitude of these private benefits, as reflected in additional revenues for GE and PKI, is expected to provide the necessary motivation to complete remaining technical development and to implement the LCM process technology.

Besides quantitative returns, the LCM technology will also provide qualitative benefits to those American women and chest X-ray patients who would not have access to these benefits without the ATP-funded project. Qualitative benefits include:

• Decreased medical risk to patients and reduced patient anxiety by avoiding unnecessary medical procedures.
• Reduced patient exposure to radiation.
• Improved analytical continuity (from rapid retrieval of prior mammograms and the elimination of lost mammograms) and facilitation of computer-aided detection (CAD).
• Facilitation of regional telemammography and teleradiology networks, expanding access to quality mammography and radiology services by underserved rural populations.
• Knowledge diffusion through GEGR’s transfer of the digital detector technology to PKI and potentially to other sub-licensees for the future development of non-medical applications.

CONCLUSIONS

The case study concludes that the new low-cost process technology has made significant progress toward meeting the conditions for commercial implementation.

Indicators of this progress include:

• Successful completion of the ATP-funded joint-venture project demonstrating the technical feasibility of the low-cost process.
• Initial sales momentum for GE Senographe 2000D and Revolution XR/d units along with independent market studies pointing to longer term demand growth.
• Technological advantages that can be translated into business advantages. In the context of increasing competition and downward pricing pressures, the 25 percent cost reduction will be an attractive incentive for industry partners to implement the low-cost process technology.

Based on the above elements of progress toward commercial implementation, the study concludes that anticipated public returns from ATP’s investment in the low-cost process technology and the broad-based medical and economic benefits to patient populations and to the healthcare industry have a strong probability of being realized.

Research performed for this study leads to the further conclusion that ATP’s industry partners would not have developed the high-risk, low-cost process technology without ATP support. As a result, estimated benefits are directly attributable to the ATP investment. These benefits are summarized in Table 1.

Table 1. Benefits from ATP’s Investment in the Low-Cost Manufacturing Process Through Additional Digital Mammography and Radiography Units

Return to Table of Contents or go to Section 1. Introduction.

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

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