Vendor sets sights on expanding PACS marketSeeking to turn around its recent lackluster financial performance, ADAC Laboratories is moving aggressively to focus on businesses that it believes have high profit potential, such as healthcare
Vendor sets sights on expanding PACS market
Seeking to turn around its recent lackluster financial performance, ADAC Laboratories is moving aggressively to focus on businesses that it believes have high profit potential, such as healthcare information systems. In a move designed to expand its opportunities in the PACS sector, ADAC has formed a strategic alliance with PACS and image-guided surgery firm Cedara Software (formerly ISG Technologies) to develop and market integrated PACS and radiology information systems. ADAC has already begun offering the Cedara viewing and reading archives and workstations as part of its Envoi image- and information-management package, and the two companies plan to demonstrate their combined capabilities at the upcoming RSNA meeting.
The announcement comes on the heels of ADACs purchase of PET partner UGM Medical (SCAN 9/29/99). In addition to its new PACS efforts, ADAC is focusing its resources on PET imaging and, its non-nuclear radiation therapy business.
With the Cedara alliance, the Milpitas, CA-based vendor is positioning itself to become a major PACS player by expanding its image and information management business and establishing key partnerships with well-established vendors in this marketplace.
Through its HealthCare Information Systems division in Houston, ADAC markets its popular QuadRIS radiology information system and Envoi, a modular image- and information-management package designed to make radiology images and information available throughout the healthcare delivery network. Envoi employs open architecture and such Web-enabled tools as CORBA, and runs on the same UNIX and Windows NT platforms as QuadRIS.
Envoi comprises several ADAC products, including QuadRIS; Physicians Desktop, an integrated voice recognition and digital dictation program; Intranet Image Server, which uses a browser-based front end to provide real-time access to images and reports from anywhere on the network; diagnostic and clinical review workstations supplied through an OEM relationship with Applicare Medical Imaging; and the integrated Workflow Manager, a workflow engine developed as part of the U.S. militarys Digital Imaging Network-Picture Archiving and Communications Systems (DIN-PACS) project.
ADAC believes the Workflow Manager in particular will set it apart from established competitors in the PACS market. Workflow Manager is a nonproprietary software program that combines the functionality of a PACS broker with HL7 conversions, modality worklist functions, prefetching and autorouting, and a multitiered inference engine for more extensive workflow and clinical-rules processing. ADAC developed the Workflow Manager program and has integrated it into QuadRIS, but also plans to make it available to other OEMs.
In fact, because the Workflow Manager is not tied to a single archive or workstation, all rules are customizable by the client and any DICOM-compliant device can be attached to it. This makes Workflow Manager attractive to a broader audience than most other PACS workflow products, according to Jay Deady, who was recently promoted to senior vice president and general manager of ADAC HealthCare Information Systems.
Until the relationship with Cedara was formed, however, Envoi did not support archiving capabilities. ADAC already has an OEM relationship with Applicare Medical Imaging that makes Applicares diagnostic and clinical review workstations available to ADAC customers. Applicare plans to introduce an NT-based archiving solution before the end of the year, but ADAC wants to be able to offer its customers a range of both archiving and workstation options.
The integration of Cedaras products with our RIS and workflow solutions will allow ADAC to provide a clearly differentiated full-scale PACS to our customers, Deady said. Through our relationship with Cedara, we will be able to offer alternatives to the workstations as well as a long-term archiving solution.
This relationship shuld also benefit Cedara. In addition to changing its name and stock symbol (SCAN 10/27/99), Cedara has embarked on a new campaign to promote its healthcare software products and services, which include the VR SoftView, VR SoftStore, and VR HardStore display and archiving software now being combined with ADACs QuadRIS and Envoi products. The Mississauga, Ontario-based company recently divided into three core businesses: software and service, image management, and image-guided therapy. Under the direction of Alyn Ford, Cedaras image-management business will be responsible for developing software products that display, analyze, and store medical images. Plans are under consideration by ADAC and Cedara to jointly develop some of this technology into future image- and information-management products.
As it moves to penetrate the PACS market, ADAC will also benefit from its hefty RIS installed base. ADAC claims an 85% market share in the U.S. for multifacility client/server RIS, with 96 QuadRIS installations scheduled to be up and running by December. The company has only nine image-management clients at present but expects to double that number in the next two quarters, according to Deady. Image management alone is expected to account for $15 million of ADACs revenues in the current fiscal year (end-September 2000); the company reported overall revenues of $282 million in 1998.
In particular, the company plans to leverage off its existing QuadRIS customer base with an integrated RIS/PACS that does not require additional hardware but still provides whatever degree of image and information management the customer desires.
Most of our QuadRIS clients have not yet made significant investment in image management, but 85% expect to do so in the next two years, Deady said. Given our market-share lead in RIS, this gives us a bigger place to plug in our image management technologies.
In addition to the new relationship with Cedara, ADAC is putting the final touches on a relationship with a very large company that has broad experience in both healthcare information technologies and PACS, according to Deady. This relationship, which will be announced during this months RSNA meeting, should enable ADAC to better support large-scale, multifacility, end-to-end PACS and less demanding image viewing and management needs outside the radiology department. ADAC expects that this deal will dramatically improve its position among PACS and integrated healthcare IT vendors.
We dont view the market anymore as being RIS, teleradiology, and PACS, Deady said. We see it as a single market that needs appropriate tools to solve various problems.