Olicon sees HIS relationships as key to future growth prospects

Olicon sees HIS relationships as key to future growth prospects

Vendor views itself as healthcare informatics firm

Olicon Imaging Systems has been an anomaly in the PACS and teleradiology markets, remaining independent in the face of widespread consolidation in the digital image management marketplace. Like some other smaller PACS players, Olicon believes its independence may be a key factor in its future success as the company strives to develop OEM relationships with PACS and HIS vendors.

Although it is a smaller player in the PACS market, Olicon has achieved a measure of success thanks in part to innovations such as its Teleradiology Archiving Program (TAP) and early adoption of the Windows NT platform. The company now has approximately 90 customers at 175 sites, with 1997 revenue growth on track for over a 100% improvement, according to company officials (PNN 10/97). The privately held firm does not release financial results.

While Olicon sells its PACS and teleradiology offerings directly, it also receives substantial revenue from OEM clients such as Picker International and Fuji Medical Systems USA. OEM channels contribute 30% of Olicon's sales, although this may increase slightly in the next year.

Olicon plans to expand its OEM stable beyond radiology, however. The firm is devoting more resources to meet the growing demand among hospitals for integrated image and information systems. The company has secured OEM as well as product development relationships with several HIS vendors.

"Although we're a medical device manufacturer and are radiology-centric in the benefits we offer, we really view ourselves as a healthcare informatics company," said Dick Paulsen, CEO.

Company officials cite the growing sophistication of potential PACS customers for this new focus. Until recently, customer decisions among vendors often hung on details such as workstation features. Now, prospective purchasers are more interested in the company's capability to integrate PACS with other healthcare information systems, said Edward Fredian, vice president of business development.

"There's a general expectation that (vendors) provide workstation functionality," he said. "Now the issues are, can you install it, can you make it work with my other information systems, and can you keep it working?"

Providing analog and digital storage

Founded initially in 1981 to provide microfilming services for radiological images, Olicon has traced an interesting trail in the PACS market. In 1985, the company began its search for a PACS equipment vendor to steer its customers toward digital film management solutions. In November 1985, Olicon was purchased by PACS pioneer Raytel, which allowed Olicon to offer its microfilm customers the option of archiving their film on optical disk systems with Raytel equipment.

Olicon in 1986 launched TAP, a program that allows users to store films, either microfilmed or in film jackets, off-site in an archive managed by Olicon. When physicians need them, the films are digitized with a film scanner and sent to the provider via teleradiology links. The offering of both analog and digital image management solutions differentiates the company from others in the marketplace. In 1990, Olicon separated from Raytel via a management-led buyout and became an independent and privately held company.

Olicon was one of the earliest PACS vendors to adopt the Windows NT platform, a decision the company believes continues to be a key factor in its success. The vendor ported its entire workstation line from DOS to NT by the 1996 Radiological Society of North America meeting.

The company's OEM relationships continue to generate revenue for the company. In fact, Olicon has teamed up with Picker and Fuji for several recent orders (PNN 10/97).

Although Fuji has announced plans to develop its own PACS product line (see story, page 2), Olicon officials anticipate that it will continue to contribute elements of its PACS technology to Fuji for the next several years. Olicon's agreement with long-standing partner Sterling Diagnostic Imaging has lapsed, although negotiations are under way for renewal of the relationship, Paulsen said.

In keeping with the enterprise-wide IS theme, Olicon is working to add technology elements to its PACS that will allow HIS products to easily access images and radiology reports. The vendor is developing interfaces to integrate with HIS offerings.

At this month's RSNA meeting, Olicon will be demonstrating an interface between an Olicon workstation and a RIS/HIS from Shared Medical Systems in that IS firm's booth. SMS calls the resulting product Radiology Command Center, which features Olicon and SMS workstations working in tandem. Radiology Command Center, which will also feature IBM MedSpeak speech recognition software, will allow radiologists to simultaneously access related clinical data along with a patient's image. In addition, SMS and Olicon are working on developing a mutual marketing relationship for Olicon's product lines.

In other partnership news, Olicon announced last month that it had entered into a joint marketing agreement with clinical and financial information systems vendor LanVision.

At last year's RSNA meeting, Olicon announced a joint development partnership with IDX Systems to integrate Olicon's PACS products with the IDXrad RIS. That project, however, is on hold pending involvement in the project by IDX's alpha sites, Fredian said.

PACS products

Olicon develops its own PACS software and offers a full range of multimodality workstations available in configurations from one to six monitors. For high-end diagnostic reading environments that include plain film, Olicon offers 02-2000 and 02-2500, which offer 1728 x 2304 and 2000 x 2500 lines, respectively. Another diagnostic workstation, 02-1600, provides 1200 x 1600 resolution, and is targeted primarily for MR and CT diagnostic environments.

Olicon also offers clinical review workstations, including 02-1000, a 1280 x 1024 resolution, high-brightness, monochrome workstation that is typically employed in the ICU/CCU environment. In addition, the company's 1K acquisition workstations can also function as clinical review workstations, according to the firm. All Olicon workstations qualify as DICOM storage class provider and user, query/retrieve user and provider, and DICOM print.

For on-call teleradiology applications, Olicon offers PACSView, a Windows 95-based software-only package for home computers and laptops. On the archiving side, Olicon will release a Windows NT-based archive server at this month's RSNA meeting. Olicon recommends a three-tier archiving structure, with local RAID arrays providing short-term storage. Magnetic tape provides medium-term storage, while DLT tape serves as the long-term archival media. The vendor will be demonstrating DICOM worklist capability on its archives at this month's RSNA meeting.

Olicon can add a DICOM gateway to its workstations to help handle compressed images as well as image routing functions, according to the company. The vendor also offers a gateway to Fuji's CR readers and will show a work-in-progress gateway, called PACSView WebGate, at this month's RSNA meeting. The gateway will enable physicians to use Web browsers to access archives, the company said.

Future prospects

While Olicon has performed well in the marketplace to date, current market dynamics make developing and sustaining profitable OEM relationships even more important for small, independent firms like Olicon. By working closely with several HIS vendors, Olicon is a step ahead of other PACS players that have not yet taken this approach towards preparing for the future of integrated image and information management.

OLICON IMAGING SYSTEMS
120 Columbia Ave., Suite 600
Aliso Viejo, CA 92656
714/360-1830
fax: 714/362-1522
www.olicon.com

Management
Dick Paulsen, CEO
Edward Fredian, vice president, business development
Leo Ferrini, vice president, sales
Rich Morgan, vice president, operations
David Wang, vice president, engineering
Bill Johnson, vice president, finance
John Braband, service manager
Steven Hendricks, software engineering manager

Product lines
PACS
Teleradiology Archiving Program (TAP)

Product distribution
Direct and OEM sales

Selected large-scale PACS customers
Vencor, a hospital network based in Louisville, KY; Egleston Children's Hospital in Atlanta; Norman Regional Hospital in Norman, OK; Talbert Medical Center in Huntington Beach, CA; Radiology Consultants Association in Fairmont, WV; Medical Center Radiologists in Norfolk, VA; and Samaritan Hospital in Troy, NY

OEM clients
Fuji Medical Systems USA, LanVision, and Picker International

Long-term strategy
While maintaining its focus on radiology and continuing to keep devoting resources to its TAP program, Olicon is seeking to increase the availability of images throughout the enterprise. The company plans to accomplish this by improving interfaces between PACS and other information systems. Olicon also continues to pursue partnerships with HIS vendors.