VAR Checkup: Health-Care IT Market Booms

Page 1 of 2

In the past three years, the average sale for medical imaging provider ScImage has doubled to $300,000. At the same time, the average sales cycle has been cut in half to six to 12 months.

"It's like a land grab," said Richard Taylor, national sales manager at ScImage, which expects sales growth of as much as 40 percent this year. "More and more hospitals are getting rid of film altogether and going to digital storage and online management of images. We've passed the inflection point where it's cheaper to go all digital vs. [standard] film, causing the whole business opportunity to explode."

Taylor says ScImage, Los Altos, Calif., and competitors are moving quickly to get in front of buyers ready to embrace health-care digital imaging technology. "Everyone is running as fast as they can because they know once a customer buys a solution they're not going to consider taking it out or replacing it for at least four or five years," he said.

Solution providers say that in the medical imaging arena, where radiologists, cardiologists and orthopedic physicians are demanding the use of digital images rather than labor-intensive X-ray-based systems, it's a perfect storm. The return on investment for medical imaging solutions is as little as a year when the cost savings associated with standard X-rays are included, said Taylor. The operational efficiencies gained from moving to an imaging solution are as much as 30 percent. And the return on investment doesn't include the improved ability for diagnoses, given the use of high-speed scanners that can generate sharper and clearer images.

ScImage's sanguine outlook for 2007 is not unusual in the health-care vertical. Health-care-focused solution providers say they expect to see double-digit growth in sales with healthy margins in a business that is booming in areas as diverse as digitization of X-rays and medical records to voice-capture systems. They say the vertical requires a significant investment but pays off in good margins and less competition than in the corporate marketplace. And the future looks bright well beyond this year.

BCC Research expects the U.S. health-care IT market to grow from $18.5 billion in 2006 to $34.7 billion in 2011, a 13.4 percent average annual growth rate. The firm also says less than one-third of U.S. hospitals and less than 20 percent of physicians have any electronic-data-handling capability.

One reason for the surging market is solutions that were at one time multimillion-dollar investments have come down in cost and are now being embraced by smaller community hospitals and medical care groups. And with the cost of once-high-priced storage systems plummeting, hospitals are moving to complete digital solutions, said Taylor. One sign of the times: a push by all the major storage vendors into the SMB market with entries from the likes of EMC, Network Appliance, Hewlett-Packard and even IBM, which in January unveiled the System Storage DS3000. That low-priced storage offering is making digital solutions more economical in smaller hospitals and health-care organizations.

1 | 2 | Next >>

Tweet

   

More Channel Programs