Market Insight

Three global trends changing the landscape of the medical imaging equipment market

September 20, 2017

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Global revenues for the medical imaging equipment market, which includes x-ray, ultrasound, MRI, and CT equipment, totaled $21.2 billion in 2016. These revenues, shown in the following figure, are forecast to reach $24.0 billion in 2020.

Growth for each imaging modality will be driven by a variety of unique factors, but several trends will affect future revenues for the entire medical imaging equipment market. Three of these trends—the aging global population, the changing US healthcare culture, and the emergence of healthcare markets in developing nations—are highlighted below and followed by IHS Markit’s advice for capitalizing on these trends.

Trend 1 - The aging global population is stretching healthcare resources and changing purchasing strategies for medical imaging equipment

According to the World Health Organization (WHO), the proportion of the global population over 60 years will rise from 12% to 22% from 2015 to 2050. The figure below shows that this aging trend will affect all regions of the world. Population aging has led to increased global rates of chronic diseases, including cancers, heart disease, and diabetes, and this increase is straining healthcare systems. The effective use of medical imaging equipment will be required to provide high-quality patient care for aging populations, but, in many countries, equipment funds are being siphoned away from medical imaging budgets and toward telehealth systems, pharmaceuticals, and services for growing inpatient and outpatient volumes. Healthcare industry consolidation in response to continued pressure to eliminate overhead and duplication of services will continue to negatively affect medical imaging budgets.

Procuring ‘work-horse’ imaging equipment (equipment that can be used quickly and for a variety of procedures) will be the focus for many healthcare providers. This type of medical imaging equipment increases efficiency and maximizes the return-on-investment. For example, a handheld ultrasound system may offer a better return-on-investment for healthcare providers who need to conduct examinations on patients in multiple hospital departments than a stationary system. In the x-ray equipment market, healthcare providers’ focus on efficiency is leading to the decline of fluoroscopy-dedicated x-ray systems because hospitals are consolidating multiple dedicated fluoroscopy rooms into singular rooms that are more cost-effective and have a higher utilization rate.

Trend 2 - Several changes to the US healthcare system are lowering medical imaging utilization rates, lengthening replacement rates, and encouraging providers to purchase less imaging equipment.

The US market for medical imaging equipment was the largest of all countries in 2016, accounting for 25% of global revenues, and recent modifications to medical imaging legislation and the changing US healthcare culture will majorly affect the global imaging equipment market. The major factors affecting the US medical imaging equipment market are shown in the figure below:

US healthcare system and medical imaging

Trend 3 - Healthcare spending is growing in developing countries and increasing the uptake of basic medical imaging equipment. Latin America, the Middle East, and Asia Pacific are the regions where this trend will drive the most growth for the imaging market through 2020.

Latin America

  • Within Latin America, Brazil was the largest market for medical imaging equipment in 2016 and its healthcare expenditure grew 7.8%.
  • Distributor networks in Colombia and Peru are rapidly expanding and increasing access to medical imaging equipment in emerging markets.
  • Health spending in Mexico is forecast to grow 5.5% in 2017 and another 5.4% in 2018. The Mexican government is heavily investing in healthcare infrastructure.

Middle East

  • The Turkish medical imaging market is emerging and rapidly growing due to government investment in infrastructure projects. Healthcare spending is forecast to grow over 11% in 2017 and 2018.
  • Substantial improvements to the Iranian healthcare system will drive growth for medical imaging equipment in the country through 2020.
  • Saudi Arabia will continue to be the largest market in the Middle East for medical imaging equipment, but political instability poses a threat to Saudi Arabian market growth and growth for the entire sub-region.

Asia Pacific

  • China had the second-largest market for medical imaging equipment of all countries in 2016, and Healthy China initiatives will continue driving investment in medical imaging equipment through 2020.
  • Malaysia is a growing, major emerging market and its government identified the healthcare industry as a key focus for investments through 2020.
  • Despite the poor healthcare infrastructure in India, the government has pledged to upgrade its healthcare system and healthcare spend is forecast to grow by double-digits the next two years.

Key Takeaways

  1. In order to meet the needs of strained healthcare systems, manufacturers need to develop a portfolio of ‘work-horse’ products and solutions that increase efficiency and maximize the return-on-investment.
  2. Replacement rates for imaging equipment are lengthening and US providers are purchasing less equipment. As a result, suppliers of medical imaging equipment must be more creative in their strategy and more flexible in their approach to be considered for deals and remain competitive in the US market.
  3. Healthcare spending is growing in developing countries and increasing the uptake of basic medical imaging equipment. Manufacturers need to establish a strong sales presence in Latin America, the Middle East, and Asia Pacific, where this trend will drive the most growth for the imaging market through 2020, in order to maintain and grow market share.

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