Mammography market struggles against paradoxical forces

Forces driving the sale of mammography equipment are about as predictable as a low pressure system moving across the Rockies. They could cut either way, precipitating new unit sales or leading to a dry spell. Requirements imposed by the Mammography Quality Standards Act may be the only clearly recognizable impetus for new sales, as other factors that commonly forecast sales growth are contradictory.

Information obtained through a survey by market research firm IMV documented long waits at a majority of mammography sites, indicating an undersaturated market. Yet the number of mammograms performed in the U.S. rose just 6% from 1999 to 2000; hundreds of facilities have abandoned the procedure in the last 12 to 24 months; and technologists appear to be performing well below capacity, an apparent indication of low productivity and underutilization.

In its study, the Medical Information Division of IMV (formerly known as Technology Marketing Group) surveyed 1000 FDA-registered mammography facilities, including hospitals, freestanding imaging centers, and doctors’ offices. The patient backlog suggested a vibrant patient demand, as 8% of respondents had an average two-month patient backlog for screening exams and 28% have scheduling lead times from one week to a month. There appeared to be no cost constraints in capital equipment purchases, as only 5% of sales involved refurbished units. But staff time was unusually low, with technologists averaging only five exams per day and sites averaging only 17 per day, even though each site had an average of 1.5 units.

Further arguing against a provider base struggling to keep up was a modest annual growth in the number of procedures from 4.2 million in 1999 to 4.5 million in 2000. The most convincing datum that patient demand would not lead to increased demand for equipment was the number of facilities that got out of mammography. Of the more than 2000 facilities contacted during the survey (commonly, to get the required number of participants, twice that number of contacts is needed), about 6% reported to IMV that they have dropped mammography. Extrapolated to the base of more than 10,000 FDA-registered sites, about 600 facilities have stopped offering mammography sometime during the last year or so.

A unifying explanation for these findings is the common lament that mammography loses money. Consequently, facilities with financial constraints may be well able to resist any pressure to increase their level of services.

“That is what may be controlling demand,” said Lorna Young, senior director of marketing research at IMV, who led the survey of mammography sites.

But profit and loss, while important, are only part of the picture, Young said. Facilities offering mammography often provide other services, which add to the bottom line but gobble up staff resources. This could explain the relatively low number of mammography studies performed per technologist, as well as the low number of total mammography exams per site. IMV found that 48% of surveyed sites provided bone mineral densitometry; 31% offered outpatient surgical procedures, such as lumpectomy; 20% cholesterol screening; 17% MR breast imaging; and 12% cardiac screening for women.

When a facility offers ancillary services, mammography may be viewed as a marketing tool for a wider range of women’s health services. It may also be offered as part of a commitment on the part of the medical facility to the health of the surrounding community, Young said. Either way, just providing the service may be enough to satisfy the goals of the facility. If so, growing patient backlogs are not likely to be sufficient to justify the purchase of additional equipment.

Most systems sold to facilities are, in fact, replacements for existing units. IMV found that about 70% of unit sales are replacements for existing units. As to overall sales, IMV estimates that more than 2000 new units are sold annually in the U.S., an increase over the 1500 units routinely sold each year in the mid-1990s, according to Young.

“It’s not like the sky is falling or the market is drying up,” she said. “It is perking right along.”

The IMV estimate may be overly optimistic. Numbers gathered by the National Electrical Manufacturers Association indicate that 1399 systems were sold in the U.S. during calendar year 2000. Even so, these numbers underline the continued strength of the market, particularly in light of increased expectations for the coming months.

This generally upbeat picture may be limited to analog systems, particularly if alleviating patient backlog is not a major consideration. One of the primary advantages of digital mammography is increased productivity, Young said. If mammography is a loss leader, the facility has no incentive to increase the number of mammograms it performs, as this would mean losing more money. With full-field digital mammography systems costing three or four times what film-based products do, the accompanying capital expenditures would only accelerate losses.