The medical imaging industries in the Asia Pacific region are expected to grow at a very fast pace, while major global markets mature. Countries that are receptive to advanced medical imaging technologies such as digital radiography (DR) include Australia, China, Hong Kong, Indonesia, Japan, Malaysia, Singapore, South Korea and Taiwan, which is particularly regarded as a boom market for medical imaging.
An ageing population and the effort to develop new cost-effective systems and control spiralling healthcare costs are driving factors for these regional markets. The introduction of high-quality healthcare services and policies in Asia has influenced the adoption of DR and this has resulted in an overall increase in worldwide examinations.
Taiwan represents a high-end market, comparable with the fast-growing economies in the Asia Pacific and with those worldwide. Taiwan owns one of the most developed healthcare systems in the region. Its national healthcare insurance practice is also highly praised by other developed countries. Moreover, the administration cost of the country's national healthcare insurance implementation is on average less than 2% of the total medical expenditure, far below the US's figure of 10-20%.
Efforts are underway by the Taiwan government to boost the country's healthcare infrastructure and resources by adding to the number of healthcare facilities and providers, including physicians and nurses.
Currently, the healthcare infrastructure, which offers a total of 505 hospitals, can be segmented into three tiers: Tier I, Tier II, and Tier III hospitals (Table 1). Tier I hospitals are public and private medical centres, which include teaching hospitals, Tier II hospitals are regional hospitals, while Tier III hospitals are district hospitals.
There is a total of 23 medical centres in Taiwan, with 20 regional hospitals and 306 district hospitals. The remaining 156 include psychiatric hospitals, Chinese medicine hospitals and non-accredited hospitals in Taiwan.
The increase in demand for clinics and outpatient services in Taiwan has resulted in hospitals operating as clinics. This forms the basis for a considerable decline in the number of public and private hospitals (Figure 1), with an increase of 3.8% in the number of clinics, from 18,686 in 2004 to 19,395 in 2007.
Macro trends feed demand
Similar to Japan, US, Europe and the emerging economies of India and China, the macro trends that provide Taiwan's demand for medical imaging include an advanced and broad healthcare delivery system, an expanding ageing population, an accelerating population segment aged over 65 years, and changing patterns of disease.
In 2007, Taiwan had a total population of 23.2 million, with those aged 65 and above numbering 2.3 million (about 9.97%). According to the World Health Organization, a country is classified as having an ageing population when this aged segment has exceeded 7% of its total population. Taiwan's percentage of ageing population has risen noticeably due to the prolonging of the national life expectancy and the fall of birth rates. Frost & Sullivan estimates Taiwan's ageing population will reach 10.8% by 2012. It is also estimated that Taiwan will become an aged society by 2018 as its population is ageing at a rate of more than double the pace of developed countries. It is further projected that the population aged 65 or above will nearly double within the next 20 years to 16% of the total population.
Care for the aged population will increase and the burden of supporting them will become heavier. This population segment, which is at a high risk for old age-related diseases, also poses a burgeoning demand for diverse medical analysis and examination that involves medical imaging, specifically X-ray generators. Significant advances in digital imaging have considerably expedited diagnostic procedures and improved the level of patient care in Taiwan. Digital imaging has permeated to a wide spectrum of healthcare facilities, ranging from medical centres to smaller city and country hospitals.
In light of a mature medical industry, the booming trend in Taiwan's medical scene and surging demand for advanced medical equipment and services, the country's advanced imaging industry has witnessed a considerable evolution, particularly in the radiography segment. Computed radiography (CR) technology has reached a state of maturity, while DR and computer-aided diagnosis (CAD) markets are in the growth stage.
While the mature CR technology for Tier I and Tier II hospitals in Taiwan is moving towards saturation with impeded growth due to demand for higher quality imaging and shorter acquisition time, the smaller hospitals of Tier III offer huge potential, as trends indicate a clear gravitation towards total electronic medical records for healthcare.
Frost & Sullivan estimates Taiwan's CR market revenues will reach $976,400 in 2008, a growth of 11.6% from 2007's figure of $875,000. Although revenues from 2008 through to 2014 are expected to decrease at an approximate negative compound annual growth rate (CAGR) of 2.9%, potential revenues for 2012 are expected to reach $997,300.
Infusion of retrofit DR
The Taiwanese DR equipment market has been growing at a steady but fast pace since the introduction of DR in 2003. Facilities that had earlier adopted CR have taken to DR relatively quickly as part of the effort to increase patient throughput and workflow efficiencies. The installed base for DR in Taiwan for 2008 is estimated at 445, an obvious outnumber compared with the 147 installed base for CR in the same year. This has been strongly influenced by the introduction of retrofit DR from global OEMs such as Canon as well as local manufacturer New Medical Imaging.
The American College of Radiology had also successfully helped in initiating healthcare providers in digital imaging and overcoming resistance to digitisation. This has made adoption of DR easier and nurtured the preferences of radiographers and radiologists for retrofit DR systems as a cost-effective option for DR, offering higher image resolution with a wider range on contrast detectability.
Frost & Sullivan estimates the DR market value in Taiwan at $25m for 2008. From 2008 through to 2014, revenues are expected to grow at a CAGR of 16.7%. Potential revenues for 2012 are expected to reach $41.3m.
CAD – most sought-after technology
The Taiwanese CAD equipment market is in the infancy stage even within Tier I hospitals. The usage of CAD as an assistive diagnosis tool has increased over the years. CAD in Taiwan is mainly used to assist in early breast cancer detection. The acceptance of CAD is low due to radiologists' lack of familiarity with the system. However, it is expected to be the most sought-after technology in Taiwan, driving the market forward with the Food and Drug Administration's approval and the recent announcement by the Taiwan Ministry of Health to use CAD as the standard procedure for breast cancer screening.
As healthcare providers compete to offer the best service to patients, the most obvious advantage of CAD is its ability to help in detecting even microcalcification structure changes of the patient, used mostly to compare recent and previous images taken from the same patient.
Frost & Sullivan estimates the Taiwanese CAD market will yield revenues of up to $840,300 in 2008. From 2008 through to 2014, revenues are expected to grow at a CAGR of 23%. Potential revenues for 2012 are expected to reach $1,783,300.
Digital imaging technologies have found wide acceptance in the healthcare landscape of Taiwan. The apparent benefits of digital imaging have helped tremendously to overcome the initial resistance faced in the adoption of this technology. The need to cope with the medical needs of the growing ageing society has opened up a new outlook for market participants offering solutions in the imaging space.
At the onset, DR in Taiwan is now in the prime growth stage of its lifecycle. This is expected to continue for the next three years and, by the end of 2008, all Tier I hospitals will have at least eight to ten units of DR systems, and 50% of Tier II regional hospitals will have at least three units. This gives an avenue for DR manufacturers to tap into the intensive care units (ICUs) and operation theatre market space in Tier II hospitals.
Improved mobility design in portable DR systems will render it highly favourable and suited for high traffic areas of the hospital, such as ICUs, accident and emergency rooms, and operating rooms. Although CAD and CR technologies were introduced around the same time, the timelines of adoption have exhibited various levels of growth. The CR market in Taiwan is predicted to be phased out in stages over the next five to seven years. However, the CAD market offers huge potential and plenty of opportunities to market participants.
A more reliable CAD system providing better diagnosis is yet to be developed and accredited. With CAD's recent development as the standard diagnosis process to aid radiologists in Taiwan for mammogram readings, it is anticipated that by 2009, all medical centres across the country will have installed CAD.
Digital imaging technologies have found wide acceptance in the healthcare landscapes of Asia's medical community. The need to cope with the medical needs of a growing ageing society has opened up new vistas for market participants offering solutions in the imaging space. As the benefits of digital imaging become increasingly apparent, the initial resistance to this technology will eventually be overcome and obtaining digital X-ray images will be the expected norm in large metropolitan Asian hospitals through to 2013.