Revenue Forecast

The revenue estimate for the base year 2023 is $2.12 billion, with a CAGR of 9.7% for the study period 2023–2028.

The Impact of the Top 3 Strategic Imperatives on MES Providers in North America and Europe

Innovative Business Models

Why:

• New business models, such as MES, operationalize capital and service costs, facilitate better total cost of ownership (TCO), and are more popular than traditional, capital-intensive purchasing and service models.
• Radiology providers seek customized approaches to cost-effective clinical asset management to develop strategic decision-making for effective cost predictability.

Frost Perspective:

• Limited capital funding, technology obsolescence at a large scale (and for the long term), and a strong appeal to access value-added services have accelerated radiology providers’ adoption of new purchasing and service models for imaging equipment.

Industry Convergence

Why:

• The availability of public-private partnerships (PPPs) and private finance initiatives (PFIs) for the purchase of capital equipment in radiology is driving the adoption of multi-vendor service (MVS) offerings by healthcare providers.

Frost Perspective:

• Service providers and original equipment manufacturers (OEMs) seek multi-vendor portfolio opportunities.
• Digital capabilities in radiology, such as prognostics, remote service capability, digital twin technology, and service capacity expansion, will see increasing adoption in 3 to 5 years.

Transformative Mega Trends

Why:

• In the coming years, strategic activities such as mergers and acquisitions (M&As) and joint ventures (JVs) will increase, leading OEMs to introduce more product offerings. Because of the rapid MVS adoption, radiology capacity will increase 2 times, causing established industries to rethink their competitive stance.

Frost Perspective:

• Market trends show the need for capital expenditure (CapEx) and operating expenditure (OpEx) or a shift from CapEx to OpEx.
• M&As and JVs among OEMs continue to consolidate the market, leaving about 5 contenders globally to offer robust and comprehensive servicing solutions for long-term customer partnerships and changing business models to balance positions.

Market Segmentation by End Customer

MES

Hospital Equipment Servicing

Hospital equipment servicing installs medical imaging equipment in various imaging departments at Tier I hospitals, research/university hospitals, and small-sized regional hospitals.

Diagnostic Imaging Center Equipment Servicing

Diagnostic imaging center equipment servicing includes imaging providers without a hospital association and that are independent of an attending/consulting physician’s office or hospital.

Ambulatory Surgical Center (ASC) Equipment Servicing

ASC equipment services provide services at care facilities and same-day surgical care alongside diagnostic and preventive imaging procedures.

These care centers are outside hospital settings.

Others

Others include equipment servicing at physician-office radiology practices, independent office-based labs (OBLs), retail health clinics, urgent care centers, and integrated delivery networks (IDNs).

Growth Drivers

Driver

• The need to replace aging fleets of medical imaging equipment across NA and Europe significantly contributes to the MES market. The average replacement cycle of medical imaging equipment is approximately 12 years, and significant costs associated with equipment servicing and maintenance during long periods will convince healthcare providers to opt for MES.
• Healthcare providers are considering owning or leasing capital equipment across diagnostic imaging modalities as the need for capital investments, upfront/part payment, and additional diagnostic equipment increases. Because organizations typically fix budgets for the long run, it becomes difficult for customers to upgrade or buy new equipment. Flexible, non-conventional business models allow a win-win situation for manufacturers when they work with hospitals and medical imaging centers (shifting from a CapEx to an OpEx model). As the medical equipment (e.g., CT and MR imaging [MRI]) life cycle lengthens, equipment will reach technology obsolescence faster, increasing equipment renewal.
• Healthcare providers are focusing on adopting preventive, corrective, and predictive maintenance of imaging equipment to decrease costly repairs and servicing, avoid catastrophic equipment failure during clinical procedures, and reduce equipment downtime.
• Purchasing equipment parts through eCommerce platforms will lower equipment downtime and reduce costs.