China Tariffs Official | GE Sells | MedPAC Cuts

“Focused ultrasound is the most powerful sound you will never hear but it can someday save your life.”

Dr. Neal Kassell, founder and chairman of the Focused Ultrasound Foundation in a recent South China Post article, as the industry group continues to make sure the focused ultrasound message is “heard” across the globe.



The Imaging Wire


China Tariffs Official
After months of stops and starts, the Trump administration formalized its plan to impose a 25% tariff on 1,102 China-made products (largely high-tech) worth $50 billion, including a wide range of medical imaging products and components (X-ray, CT, ultrasound, MRI, Scintigraphy). The first $34 billion in tariffs on 808 product types will go into effect on July 6, with another $16 billion in tariffs and other unspecified ‘investment restrictions” still pending. China quickly retaliated, announcing plans to place a 25% tariff on $34 billion worth of US imports (largely agricultural products) and taking all of the country’s previous trade commitments off the table… And then, Trump threatened to issue even larger tariffs in retaliation to China’s retaliation. We’re living in interesting times.

China steals our IP and benefits from a hefty trade imbalance, but it’s hard to find an economist who thinks these tariffs are worth their economic impact. Needless to say, the tariffs also pose a threat to the US medical imaging industry. Estimates suggest that the US medical imaging industry will absorb $2.25 billion in extra costs from the tariffs, potentially delaying purchases and possibly “forcing” some OEMs who source Chinese components to shift their manufacturing operations outside the US.


MedPAC Proposes Imaging Payment Reductions
The Medicare Payment Advisory Commission (MedPAC) recommended that congress reduce Medicare reimbursements for radiology and a range of other specialties by 3.8%, while suggesting that payments for clinician and hospital outpatient services increase by 10%. The backdrop for MedPAC’s recommendations is its belief that specific services such as imaging are over-priced, while low reimbursements for evaluation and management services have led to a devaluation this type of care. MedPAC also made recommendations to congress to reduce costs associated with “low-value care,” roughly defined as procedures that do not deliver as much patient value as their total costs, which as you may expect included a wide range of imaging procedures (e.g. “Imaging for nonspecific low back pain”).


GE Continues Sell-off
GE continues to divest from non-core businesses, this time selling GE Healthcare’ analytics subsidiary, Caradigm, to cancer diagnostic and oncology workflow technology company, Inspirata. Caradigm uses software to pull data from key sources (labs, EHR, billing systems, pharmacies) and feeds the data to healthcare providers to improve care and reduce costs. Inspirata plans to use Caradigm to support its cancer data technology. Caradigm, formed in 2012 through a joint venture with Microsoft before becoming a GE Healthcare subsidiary in 2016, and is GE’s third major healthcare division sold this year (Veritas bought its value-based healthcare division, Inspirata bought its Omnyx digital pathology organization). These sales are part of a wider streamlining trend across the conglomerate that appears to be gaining momentum in 2018 (GE also unloaded its locomotive business and plans to sell its insurance unit). CEO Flannery still has some work to do in order to get GE back on track, and recent history suggests more sales like these are coming, inside and outside of healthcare.



The Wire

  • PwC projects that US medical costs will increase 6% in 2019, remaining consistent with the 5.5% to 6.8% annual increases seen over the last five years, while emphasizing that these increases are unsustainable into the future.
  • Image analysis and machine learning solutions company, Riverain Technologies, was awarded a US patent for technology currently used in its ClearRead CT software that selectively removes anatomical structures from CT scans to improve reading accuracy for lung cancer detection.
  • Aussie AI software company, Maxwell Plus, will begin trialing a new algorithm to assist in the detection of prostate cancer, with future plans to expand its algorithms to lung, prostate, and breast cancers, as well as neurodegenerative diseases.
  • UK imaging manufacturer trade association, AXREM, reported that the overall UK radiology equipment market declined by a hefty 30% over the six months ending March 2018 (CT sales down 43% to 46 units, MRI down 30% to 40 units), exacerbating what AXREM believes is a dangerously-old UK installed base (April 2017: 55% of CTs and 58% of MRI systems over 5yrs old).
  • Chronos Imaging announced the shipment of its 100th CT tube, reaching the milestone less than three months after the company acquired Philips’ Dunlee manufacturing plant in Aurora, Illinois.
  • A recent study suggests that academic radiology practices are losing an estimated $1 million per year due to missed imaging appointments and no-shows, led by mammograms with a $350k impact, suggesting that no-shows have a greater revenue impact on radiology than other specialties due to the high cost of imaging procedures. Maybe radiologists should start taking more Mondays and Fridays off.
  • Analogic launched its new AN8150-01 20 kW RF amplifier for 1.5 Tesla MRI Systems, representing the first in the company’s latest family of RF amplifiers, which ranges from 0.7T to 1.5T and 2.5 kW to 20 kW, and offers improvements to thermal management and output power.
  • Sectra completed a nationwide telepathology solution in the Netherlands, allowing pathology labs across the country to automatically upload and share digital pathology images, while representing the world’s first solution of its kind.
  • Radiology Partners (RP) announced the addition of Duke University to the Radiology Partners Research Institute (also includes Baylor, U of Chicago, and Cincinnati Children’s), RP’s program with academic institutions focused on advancing the radiology specialty and medical imaging applications.
  • Washington University’s Barnes-Jewish Hospital began using ViewRay’s MRIdian Linac MR image-guided radiotherapy system, making it the first US cancer center to use both the MRIdian and MRIdian Linac.


The Resource Wire

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