Kaiser’s Imaging History | Solid Q2 | Siemens’ Robotics Move

“AI support won’t ensure scanner sales. Lack of AI support will ensure lack of scanner sales.”

A Twitter comment from machine learning researcher, Neil Tenenholtz, arguing that support for 3rd party algorithms will become table stakes for imaging systems, potentially driving greater standardization across imaging hardware brands.

Imaging Wire Sponsors

  • Carestream – Focused on delivering innovation that is life changing – for patients, customers, employees, communities and other stakeholders
  • Focused Ultrasound Foundation – Accelerating the development and adoption of focused ultrasound
  • Medmo – Helping underinsured Americans save on medical scans by connecting them to imaging providers with unfilled schedule time
  • Nuance – AI and cloud-powered technology solutions to help radiologists stay focused, move quickly, and work smarter
  • Pocus Systems – A new Point of Care Ultrasound startup, combining a team of POCUS veterans with next-generation genuine AI technology to disrupt the industry
  • Qure.ai – Making healthcare more accessible by applying deep learning to radiology imaging

The Imaging Wire

Kaiser’s Complete Imaging History

A multidisciplinary Kaiser Permanente team (including PCPs, radiologists, IT staff, and practice improvement pros) worked together to improve imaging order quality/completeness and give radiologists more details to support their diagnosis. Here’s how:

  • Define Complete – The team created a standardized definition of a “complete imaging history,” which is a pretty big change from their previous guideline: “a single free-text box to enter whatever history information they felt to be relevant.”
  • Guide Completeness – They then changed the imaging order entry process to guide physicians with four supportive prompts: what happened, when it happened; where it hurts; and what is the ordering provider’s concern.
  • Improve Completeness – Over an 18 month study, orders containing all four history components improved from only 16% (64/397) during the baseline comparison period to 52% (2,200/4,234) after implementation, while the mean character count in imaging histories increased from 45.4 to 75.4 characters.

Imaging Financials Pretty Solid in Q2

Medical imaging company financials from the April-June 2019 revealed pretty solid imaging division results from most major companies (particularly, Canon, Fujifilm, GE, Nuance, Philips, Siemens), but challenging overall quarters for a number of players (particularly, Canon, Konica Minolta, Shimadzu). Here are the highlights:

  • Canon posted its second straight disappointing quarter (revenue -10% to $8.25b, gross profit -14.4% to $3.7b, OP -56% to $392.7m, and net income -55.6% to $314.2m). However, Canon Medical Systems posted strong growth (revenue +11% to $993m; OP +102% to $32m) due in part to solid performance in the U.S. and the launch of new CT and X-ray systems.
  • Fujifilm’s fiscal Q1 brought a 5.2% revenue decline to $5 billion and a 48.2% drop in net income to $139 million, although its healthcare business stood out (revenue +2.3% to $984m, OP +660% to $50m) due in part to a strong performance from its medical solutions division.
  • GE beat expectations once again in Q2 (revenue -1% to $28.8 billion and +7% organically, net earnings -$0.2B), while GE Healthcare remained solid (revenue -1% to $4.9b and +4% organically, profit +3% to $1.0b and +9% organically).
  • Hitachi posted overall Q1 declines (revenue -6% to $19.2b, OP -16% to $1.17b), while its healthcare division saw revenue fall 9% to $311 million and posted a smaller operating loss (-$7.5m vs. -$14.1m).
  • Hologic’s fiscal Q3 brought a 3.4% revenue increase to $852.4 million, driven in part by 5.7% breast health revenue growth to $325 million, while returning to profitability with a $93.9 million net income (vs. -$272m in Q2 2019).
  • Konica Minolta had a difficult fiscal Q1 overall (revenue -5% to $2.4b, OP -96% to $145m), while its healthcare business had a relatively flat quarter (revenue flat at $176m, OP -1.6% to -$2.8m) despite a strong healthcare performance in Japan and from its global Healthcare IT business.
  • Nuance’s Q3 revenue increased 2% to $458.3 million and its GAAP net income rebounded to $12.2 million (vs. -$20.7m in Q3 2018), due in part to a strong performance from its Healthcare division (revenue +2% to $239.8m, OP +9.2% to $83.6m, radiology revenue +9% to $63m).
  • Philips reported 6% comparable revenue growth to €4.7 billion, while operating income grew 17.5% to €350 million, driven by strong performance from its Diagnosis & Treatment businesses and Image-Guided Therapy division.
  • Shimadzu struggled during its fiscal Q1 (revenue -5.7% to $764m, net income -21.6% to $32m), due in part to a poor performance from its Medical Systems business (revenue -5.9% to $125m, operating loss of $4.8m).
  • Siemens Healthineers’ strong imaging performance (+8% to €2.186b) drove 5.8% Q3 revenue growth to €3.569 billion and a 20% net income increase to €353 million. However, the quarterly announcement put a greater spotlight on Siemens’ struggling in-vitro diagnostics business, which posted lower-than-expected shipments and profit.
  • Varex’s fiscal Q3 results featured 3% increases in overall and medical revenue ($197m, $152m), while its operating earnings fell to $5 million (vs. $7m).

Siemens’ Vascular Robotics Move

Siemens Healthineers finally put its post-IPO funding/flexibility to use, acquiring Corindus Vascular Robotics for $1.1 billion or $4.28 per share. Here’s the big takeaways:

  • Corindus – Corindus develops robotic systems for minimally invasive vascular therapy procedures, which would combine with Siemens’ imaging and AI tech to create a precision robotics platform for cardiovascular disease treatment.
  • Strategic Move – This is a hefty 77% premium over Corindus’ closing stock price and about a 100x multiple of its annual revenue, so it’s safe to say this is a strategic acquisition. Siemens positions Corindus as a core part of its Advanced Therapies growth strategy, helping build the company’s image and robot-guided therapies and tap into key interventional growth areas.
  • Adjacent Move – Siemens Healthineers has positioned “tapping into adjacent growth markets” (e.g. AI, precision medicine, new therapies) as the core of its mid-term strategy for quite some time, and this acquisition represents a major move towards executing this strategy.

The Wire

  • Here’s one wrinkle to the healthcare cost transparency overhaul that’s about to take place. A 1,000-patient survey from revenue-cycle management software company, Waystar, found that only 12% of patients who had a pre-planned hospital visit during the last year shopped around beforehand and only 28% discussed costs with hospital personal or received an out-of-pocket estimate. Of the folks who didn’t shop around, 38% weren’t aware that costs could vary, 24% didn’t think they could understand their options, and 23% didn’t know how to compare providers.
  • A team of Belgian researchers found that chest CT exams read using an “all-in-one” window (allows radiologists to view multiple CT windows simultaneously) is “non-inferior” to conventional window settings for lesion detection. The study had a pair of 3-radiologist teams view 50 chest CTs with 417 lesions, revealing that there were a similar number of missed lesions with the AIO window and conventional window among senior radiologists (12.9% vs. 10.8%) and junior rads (13.2% vs. 10.3%).
  • CB Insights reported that healthcare AI startups raised a record $864 million during Q2 2019 on 75 deals, driven in part by major rounds by Tempus and PathAI ($200m, $60m) and a higher number of late-stage rounds (only 32% of deals were seed/angel stage vs. ~50%). However, Q2 2019 might be more accurately viewed as a rebound for healthcare AI funding, as quarterly funding remained below $600m since the previous $764m high was achieved in Q2 2018.
  • Shimadzu announced the Japan launch of the SONIALVISION G4 LX RF system, adding a new option that uses AI to measure bone density in X-ray images with less labor and training compared to the standard DXA method. The SONIALVISION G4 LX also features Shimadzu’s new dosage-reducing “SCORE PRO Advance” image processing technology and can now support chest radiography due to an expanded 180cm distance between the X-ray tube and detector.
  • Shimadzu also had a busy week in the U.S., announcing the launch and FDA clearance of its FLUOROspeed X1 RF conventional table system, intended for bariatric and routine fluoroscopic and radiographic exams. First seen by many at AHRA, the FLUOROspeed X1 RF is highlighted by its weight support (665 lb. static, 500 lb. motion), improved operability, support for patients in wheelchairs, ability to add a second X-ray tube, and its cost competitiveness.
  • Norwegian researchers revealed that patient comfort may be the latest addition to DBT’s list of benefits over DM, finding that although DBT requires longer scan times and more radiation exposure, it can be performed with less breast compression. The study looked at data from a Norwegian DBT trial (n=21,729 women), finding that women who underwent DBT experienced less compression force and pressure in both craniocaudal (force: 102.5 vs. 107.3 N; pressure: 12.7 vs. 13.4 kPa) and mediolateral oblique (force: 119.9 vs. 121 N; pressure: 9.5 vs. 9.57 kPa) views.
  • Fujitsu Australia announced a new research collaboration with GE Healthcare, Macquarie University, and Macquarie Medical Imaging intended to develop an AI algorithm to detect and monitor brain aneurysms in CT scans (it highlights blood vessels within the circle of Willis). The AU$2.1 million project will leverage Fujitsu’s AI and digital technologies, GE’s imaging systems, and Macquarie’s clinical expertise to develop the solution that Fujitsu intends to commercialize globally.

The Resource Wire

  • Did you know that imaging patients are most likely to no-show for their procedures on Mondays and Saturdays? By partnering with Medmo, imaging centers can keep their schedules full, despite the inevitable Monday no-shows.
  • Ready for RSNA 2019? So is Carestream, which just shared plans to highlight its 3D extremity imaging systems, DRX room portfolio, DRX Plus Detectors, and DR software at RSNA booth #7513.
  • This Nuance case study details why the Hospital for Special Surgery chose to #ditchthedisk and how they benefited from moving to the Nuance PowerShare Network.

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