Kodak seeks PACS resurgence following early market difficulties

Kodak seeks PACS resurgence following early market difficulties

Vendor will leverage installed base for success

Film and digital imaging giant Eastman Kodak is one of the oldest participants in the PACS market. Despite its early entry, however, the Rochester, NY-based company has failed to achieve the high profile of other PACS vendors such as Agfa and Siemens Medical Systems.

The company is working to change that, however. With a large-scale PACS in operation at the 1200-bed New York Hospital and numerous miniPACS and teleradiology networks in place, Kodak believes that it now has the experience to foster solid growth in its PACS business. Kodak has focused on the technology side of the business in recent years, but the company is now planning a focused marketing effort over the next 18 months, according to Sridhar Seshadri, global segment manager and vice president of Kodak's Dallas, TX-based Health Imaging division, which includes the company's PACS efforts.

Kodak wants to participate heavily in the large-scale PACS market, and believes that the experience at New York Hospital will prove a strong selling point. At the same time, however, Kodak also believes strongly in the health of the miniPACS sector.

"MiniPACS won't go away," Seshadri said. "The U.S. is driving the large-scale PACS market, but there will still be miniPACS in the U.S. as well as the rest of the world."

Kodak's efforts in PACS and teleradiology date back to 1987, when the vendor unveiled the Kodak Ektascan teleradiology system, a camera-on-a-stick offering that allowed radiologists to digitize and transmit radiographic images over standard telephone lines. In 1990, Kodak announced a strategic alliance with PACS provider Vortech Data to co-develop and co-market PACS technology under the Kodak Ektascan Imagelink system name. The company also released its first computed radiography system for critical-care applications in 1990.

In 1993, Kodak purchased Vortech Data and integrated the unit with Kodak's worldwide electronics business into a new subsidiary, called Kodak Health Imaging Systems, which was based in Dallas. The acquisition of Vortech Data was an important milestone for Kodak and led to the development of a full-scale PACS offering with Macintosh-based Personal Display Stations. It did not, however, bring the PACS market the dominance that many market watchers had expected following the deal. While Vortech Data was compliant with the ACR-NEMA 2.0 standard, Kodak was unable to carry that forward into a quick adoption of the DICOM 3.0 standard when it was ratified. This difficulty hindered Kodak's entry into the large-scale PACS arena.

In 1994, the company decided to bolster its ultrasound miniPACS capability and went into partnership with Nova Microsonics, the ultrasound miniPACS subsidiary of Advanced Technology Laboratories (now ATL Ultrasound), to jointly develop and market the Access digital ultrasound image management systems.

Kodak rebranded its digital imaging products in 1995 from Kodak Ektascan to Kodak Digital Science, and the company reorganized the Health Imaging Systems into its Kodak Health Sciences unit. About 200 jobs in Dallas and Rochester were eliminated in that move, in part to remedy the limited success the firm had experienced with the Vortech acquisition.

In early 1996, Kodak renamed its health sciences group Kodak Health Imaging division. The company finally completed its effort to bring DICOM 3.0-based image management software to market in 1996. It also completed conversion of the PACS workstations to a Unix-based operating system that year. Kodak has since ported the majority of its PACS offerings to the Windows NT platform. Following the DICOM 3.0 implementation, Kodak won an important victory in its efforts to land large-scale PACS deals. The company announced a multimillion- dollar sale to New York Hospital in January 1997, reportedly beating out industry heavyweights such as Agfa.

In February 1997, Kodak adopted a familiar storyline from its earlier Vortech acquisition and purchased partner Nova Microsonics. The company also announced that it would port its PACS line to the NT platform in October, a step that included an OEM relationship with Applicare Medical Imaging for its Radworks software. Like many PACS firms, Kodak has chosen to secure some PACS components from other companies rather than develop them in-house.

In general, the latter half of 1997 was a challenging time for Kodak, including the announcement of a company-wide layoff of 10,000. While the Health Imaging division was involved in the job cuts, the company said that only nonessential areas were affected. At the 1997 RSNA meeting, the company also fended off rumors that the Health Imaging division was about to be divested, with Johnson & Johnson the rumored suitor (PNN 1/98).

Strategic focus

Kodak has converted its workstations and most of its Digital Science product family to Windows NT. It has no immediate plans, however, to convert its archive server from Unix to NT. The company believes that the Microsoft platform is not yet robust enough to handle everyday archiving needs.

Although Kodak has worked hard to shift to NT, the vendor is already planning for the future. The company has a Web browser and server offering in beta testing (PNN 1/98), and it foresees the day when its workstations will be based on Java applets.

Kodak believes that its image capture is a critical component of PACS networks, and it has worked to make this a key technology. For digital modalities, the company offers Medical Image Manager, and it offers x-ray film digitizers and CR readers to handle plain film. Kodak expects that demand for CR will be strong for the foreseeable future, even with the onset of digital radiography techniques. Kodak has succeeded in refining its initial CR product, which had limited success in its early years. Although the firm is proud of the CR 400's image-processing capabilities, Kodak continues to invest resources in improving the product.

In what will be a complementary product to its CR program, Kodak is developing its own digital radiography system, from which images were shown at the 1997 RSNA meeting. The system employs a gadolinium oxysulfide scintillation material and a thin film transistor photodiode array. Kodak is developing the product in conjunction with a leading U.S. university, Seshadri said.

Kodak believes that its experience in systems integration is a differentiating factor in the market. In 1997, the company launched a network products and services group that provides network management for miniPACS implementations. To help the company's efforts in large-scale PACS situations, Kodak recently formed a relationship with Perot Systems, which will provide networking and integration services in the U.S. (PNN 3/98).

Kodak also places a lot of emphasis on work-flow management tools, which have been integrated into every PACS component offered by the company, Seshadri said.

Future prospects

Although Kodak didn't achieve the instant success in PACS many had expected five years ago, a company like Kodak should never be counted out. Despite some early missteps in the PACS market, the company has one of the largest sales and service organizations in the medical imaging sector, and it has a huge worldwide installed base of dedicated film users to potentially leverage for digital imaging sales. With the resources and technical muscle Kodak can bring to bear on any project, any future discussions of prominent PACS vendors will need to include Kodak.

Eastman Kodak Company
Health Imaging Division
Medical Imaging Systems
18325 Waterview Parkway
Dallas, TX 75252

800/555-8223

webs.kodak.com/go/health

Product lines

• Kodak Digital Science medical imaging system (capture, storage, display, and workstation components)

• Kodak Digital Science CR 400

• Kodak Digital Science printers

Management

• Sridhar Seshadri, global segment manager and vice president

• Lori Martin, director, product management group

• Joseph Maune, director, business development

• Michael Moehring, product manager, CR

• Edward Weaver, product manager, archiving

• Lawrence White, product manager, workstations

• Michael Cullinan, product manager, interfaces

PACS alliances

• ISG Technologies and Applicare Medical Imaging (workstations)

• Perot Systems (large-scale systems integration)

• Storage Technologies (DLT archives)

• NSM Jukebox (CD-R jukeboxes)

• Lumisys (x-ray film digitizers)

• Mitra Imaging (HIS/RIS interface)

• Dome Imaging Systems (workstation display boards)

• DataRay (monitors)

Selected sites

• New York Hospital in New York City (large-scale PACS)

• St. John's Medical Center in New York City (large-scale PACS)

• Queen of Angels-Hollywood Presbyterian Medical Center in Los Angeles, CA (large-scale PACS)

• Brigham and Women's Hospital in Boston (digital modality clusters)

• University of Colorado in Denver (digital modality cluster)

• University of Ulm in Ulm, Germany (digital modality cluster)

• Trento Project in Trento, Italy (remote primary diagnosis)

• Unidade Radiologica Paulista (ICU/CCU PACS) in Sao Paulo, Brazil

• Wake Medical Center in Raleigh, NC (ICU/CCU PACS)

• Whiston Hospital in Merseyside, U.K. (ICU/CCU PACS)

• Ochsner Foundation in New Orleans (ultrasound miniPACS)

• University of Pennsylvania Medical Center in Philadelphia (ultrasound miniPACS)

• Peel Memorial Hospital in Brampton, Ontario (ultrasound miniPACS)

Long-term strategy

Kodak believes that its building block strategy of PACS implementation, as well as its emphasis on strong work flow and image capture solutions, will lead to success in the market.

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