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Sterling finds Canadian showcase for digital expertise


Sterling finds Canadian showcase for digital expertiseContract with Atlantic Health covers Direct RadiographyIn one of its first full-scale PACS implementations, Sterling Diagnostic Imaging has landed a multimillion-dollar contract to

Sterling finds Canadian showcase for digital expertise

Contract with Atlantic Health covers Direct Radiography

In one of its first full-scale PACS implementations, Sterling Diagnostic Imaging has landed a multimillion-dollar contract to provide digital image management technology to a hospital network in New Brunswick, Canada. Sterling's agreement with Atlantic Health Sciences (AHSC) of Saint John covers the installation of a large-scale enterprise-wide PACS network, with provisions for including Sterling's Direct Radiography x-ray digitization technology when it becomes available next year.

Under the terms of the agreement, Sterling, of Glasgow, DE, will supply digital imaging technology to six AHSC facilities over the next seven years in a deal worth a total of $10 million (Canadian). AHSC provides healthcare to over 25% of New Brunswick's population and covers a 97-square-mile area, much of which is rural. AHSC chose to implement PACS technology as a means of improving productivity, reducing operating costs, and providing better healthcare to its patients, according to David Carlin, AHSC's president and CEO.

The AHSC deal is the largest PACS contract to date for Sterling and the first to include a digital archiving component, according to Gary Sadow, vice president of electronic imaging. The installation marks a major step in Sterling's evolution from a film-based company to an electronic imaging firm, he said.

Sterling has been slowly growing its position in electronic imaging since the release in 1989 of Linx, an electronic network for connecting modality imaging scanners to laser printers to allow users to print film in different locations in a hospital. Sterling has added features to Linx over the years, such as connections to soft-copy review stations and remote printing, and is planning a rollout by the end of this year of Linx II, a second-generation version of Linx that will move the product from 486 PCs to Pentium computers and the Windows NT operating system. There are about 2000 Linx networks globally, of which about 25 use soft-copy review. Until the AHSC deal, however, Sterling did not offer a digital archiving component with Linx.

Sterling has taken an interesting approach to PACS. The company could have chosen to develop image management software in-house, or buy it through corporate acquisition, as GE Medical Systems did last month with its purchase of Lockheed Martin Medical Imaging Systems (see story, page 1).

Instead, Sterling has decided to rely on OEM partners for some PACS components, like image review workstations, while it concentrates on developing technology that can differentiate the vendor from its competitors. Direct Radiography is one such technology, as is Sterling's networking expertise and extensive line of digital printing options, which include the Helios line of dry-process laser printers that Sterling acquired from Polaroid last year.

On the AHSC contract, for example, Sterling will deploy image review workstations developed by ISG Technologies of Mississauga, Ontario. Sterling also has an OEM agreement with Cemax-Icon of Fremont, CA, however, and plans to sign on additional partners to offer a broad range of workstations by the end of this year, including those from Canon, Olicon, and CompuRad, in addition to ISG and Cemax-Icon.

"Life is too short to try and be the best of all breeds by yourself," Sadow said. "You will find that in every component that goes into a PAC system, even in archiving, we will have two or three offerings."

Direct Radiography moves ahead

Sterling's development pace for Direct Radiography continues to move on schedule for a 1998 introduction, and the AHSC installation will serve as a springboard for the debut of DR, a technology that Sterling is developing for the direct digitization of x-ray data. DR employs a selenium-based detector material and will allow users to collect x-rays, convert them into digital data, and distribute the data over a DICOM 3.0-compliant network.

Sterling plans to implement DR in the third phase of the AHSC installation, once the network, archives, and image review workstations have been installed and are in operation. AHSC has reserved the rights to purchasing the DR component until the first two phases are complete, but Sterling executives are confident that AHSC will go through with the purchase.

The implementation of DR will come in two flavors, according to Sadow. Sterling will develop a DR retrofit module that can be added on to existing x-ray systems in place of an x-ray film cassette. The company will also work with x-ray OEMs to develop a complete DR room that can be sold as a new digital x-ray imaging system.

Sterling executives promise that the AHSC deal is only the first of four or five other large-scale PACS implementations that are in the works at the company and should be announced in the next few months. The PACS market is already becoming crowded with major vendors, but Sterling believes it will be a formidable foe. Not only is it developing a broad product line and unique technology, such as Direct Radiography, but it can play off its large installed base of x-ray film customers to drum up PACS sales.

And Sterling's installed base is growing rapidly. By the end of this year, it expects to be the number-one x-ray film vendor in the U.S., surpassing long-time market leader Eastman Kodak, according to Bill Ward, director of global marketing. Thanks to large preferred-supplier deals with healthcare giants Premier, Columbia, and other buying groups, Sterling expects its share of the U.S. x-ray film market to grow to 30% or 35% by the end of the year, compared with a share in the mid-20s a year ago.

"We have a large and loyal customer base worldwide. We find that those customers are typically looking for one-stop shopping," Ward said. "If they find somebody that can take them through to their future state, they want to work with them, because they have confidence in the relationship that's already been established."

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