The trials and tribulations of a middle-aged PACS consultant,
father, and garage sale junkie as he engages in his
never-ending search for sanity in an insane world.

Wednesday, September 1, 2010

We’re #1!! So are we!! Us too!!

I got an e-mail from Imaging Director the other day who asked me what seemed to be a simple question “In your opinion who are the top 5 PACS vendors in the marketplace today?” I wish the answer were as simple as the question.

In the PACS marketplace everyone either is number one or has been number one at some point in time. I kid you not. Just look at their ads. Hertz has nothing on the medical imaging field by saying they are number one while Avis just tries harder. The companies who do rankings, and there are several of them not just one or two, exist basically to sell reports that show how the individual vendors were chosen as #1. How many of the bottom ten vendors do you think buy the reports? I would say few, but one of the fun facts of rankings is that you can be in the top five in one area and bottom ten in another. In some cases the same company can be ranked both high and low.

I’ll use KLAS as an example here but KLAS by no means is unique. The same can be said for companies like Frost and Sullivan, various on line and print journals who give out awards for areas like “Top Connected” Readers Choice” and even individual states who hand out awards to constituencies residing there by “fastest growing”, “top revenue”, and my personal favorite, the “emerging elite”. Here’s where it gets tricky. Awards like “fastest growing” are often based on percentage revenue increases from the last 5 years while top revenue winners have the largest dollar amount revenue growth over the same 5 year period. This helps the smaller vendors but all but excludes the majors. After all going from $5M in sales to $10 M in sales is a 100% increase while going from $500M in sales to $550M (which in this market is actually pretty good) is a mere 10%. Never do the rankings take into account things like average size of sale (One GE Centricity® sale can equal 15 Intelerad IntelePACS® sales, so if you go by dollars is that really fair?), the sale net price (again, if sales are up 27% but net margins down 42% are you really making money?) , the size, number and names of the vendor’s clients provided to the company ((ever seen a bad image at RSNA?) , “gimmes” a.k.a. “We’ll throw in our PACS at no charge IF you buy the MRI and 3 US’s that you are looking at”., and a host of others. When you look at more “independent” ranking systems you have to know (but have no way of really knowing) how the respondent felt on the day they filled out their evaluation on the vendor as well. I liken this to Ruth Graham, Billy Graham’s wife and soul mate being asked by Barbara Bush if as a Christian, she had ever contemplated divorce. Barbara explained, "Her answer, was, 'Divorce? No. Murder? Yes.'" It all depends on how you feel any given day how you will respond and a day where the system is not cooperating is NOT a good day for the vendor to have the report filled out, especially if the number of respondents on that particular system is considerably more finite than others.

I do not mean to pick on KLAS but when I look at the 2009 rankings found at http://www.klasresearch.com/Research/Segments/Default.aspx?ID=7&ReturnURL=%2fResearch%2fSegments%2fDefault.aspx%3fID%3d7 I just shake my head. GE is both #1 and #10; Merge is #4 and #11. Sure these are different products but….is GE not GE? The #1 product in the large hospital market has been #1 for several years and is the old Dynamic Imaging product. Isn’t it time the DI product got integrated with the #10 rated GE Centricity PACS? After all GE did but Dynamic Imaging back in October 2007- and even a company the size of GE can integrate a product in that amount of time. I don’t recall Philips having a Philips/Stentor and Philips/Sectra ratings for three years (through 2008), post-Stentor acquisition but then what do I know. Hopefully this will be the last year we see dual GE postings. KLAS, are you listening? GE are you?

And Merge’s #4 and #11 ranking both say AMICAS. Which is correct? More importantly, though, since when has Merge/AMICAS been a major player in the 200 bed and up hospital market? And how many PACS has Cerner sold in ANY market let alone 200 bed and up except as part of the Millennium® Suite of products. And while DR’s Unity® PACS is good, its main focus hasn’t traditionally been the 200 bed and up where it surprised everyone in the #6 position but in the 200 bed marketplace where it ranked #2. I bet the folks at Siemens are slitting their wrists being ranked below lowly Cerner but they are probably the only other ones besides me who question these “rankings”.

What is sad is that hospitals more often than not use these rankings to pick the top 3-4 PACS to look at. Is that fair? No. Is it right? No. Is it smart? No. But since when has right, fair, and smart had to do anything with decisions made in the healthcare environment. More often than not the decision on a vendor of choice or VOC is made BEFORE the candidates to evaluate are chosen but that is another blog for another day.

I find it amazing that last year Siemens who ranked low again in KLAS in PACS received the 2010 North American Frost & Sullivan Award for Technology Leadership of the Year for their CT. Hey Siemens, your PACS really sucks but your CT is #1? Why just 6 short years ago the company got two awards for its PACS from F&S- Frost & Sullivan Awards for Product Line Strategy Leadership and Service Differentiation Innovation- and that was when their PACS really did suck. The new syngo® is actually much better than the old SIENET® and yet it ranks below Cerner…Go figure.

Now let’s look at corporate stability. Aspyra, which was recently acquired by the Orion Healthcare Ventures for a sum slightly more than what most GE executives pay for their lunch, was ranked higher in KLAS rankings than Fuji, Brit Systems, GE Centricity PACS- IW (#1 in the large over 200 bed market) Carestream, Agfa and Siemens. The company that had once traded in the mid $20’s just a year ago is now at $0.10 with an earnings per share (EPS) of (-$50.50). That is minus $50.50 for the uninitiated. Even Merge wasn’t that bad (sigh). My thoughts on Merge will be its own post one day when I grow a bigger set as they hover at around $2.50, ostensibly flat stock-wise this year despite several major acquisitions of note including the purchase of AMICAS.

O.K., back to Aspyra. I don’t care how bad the other six companies suck they can’t be worse than Aspyra at least from a stability standpoint. The company never set the world on fire from a sales standpoint either- consistently <$10M in sales so what’s the big deal here? Three notches higher than #1 in large scale PACS? I don’t think so….

I know many of the PACS out there and I’m sorry DR Systems just isn’t #9 in the ambulatory care rankings. Murray and Rick run an incredibly tight ship there and would kick some serious butt if they felt the ranking was justified. Instead they probably are just happy to play Avis in the small hospital market and choose to ignore the ambulatory rankings. On the plus side Intelerad, an all too often ignored company, did rank number one in that market and I can honestly say deservedly so…

So who are the top five vendors in PACS? The top five vendors are the one who best meets your needs, not who someone has arbitrarily ranked based on criteria filled out by an individual who may or may not be then right person to ask on any given day. Imaging directors and others need to be able to clearly articulate what these needs are, then talk to others or comparable volume and application who have used various PACS then look at each vendor based on their merits, not rankings.

I wonder when PACS consultants will get ranked. With any luck maybe I can help develop with the criteria….and be in the top 10….maybe….although if political correctness is one of the factors being looked at I’m dead meat…

1 comment:

  1. Good post, PACSMan. KLAS has some credibility because it is actually based on users comments. But Frost & Sullivan is a complete marketing scam.

    Having worked for a PACS company's marketing department and "won" several of those technology awards, they were purchased outright.

    First you buy some expensive ($5-10K)industry reports - this opens the doors. Second, get yourself interviewed by an "analyst" and F&S then regurgitates whatever you tell them into some kind of "research" looking thing - which becomes part of their next industry report to sell. All their research is nothing more than re-written statements made the PACS vendors.

    Then the F&S marketing team goes into a full-court press by making some kind of reward up and a press release (which they will let you help write). Here's the kicker: If you don't buy the press release rights from them (often $1,000s), you cannot mention your award or acknowledge it publicly nor will they. They will, however, send you a handsome plastic plaque worth about $10.

    Never believe any specifics or awards that F&S puts out.