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Analysis In Brief
 The prolonged cold snap across Europe and North America has led to a surge in fractures caused by slips and road accidents, boosting demand for orthopaedic trauma products used to fix broken bones.
The weather should provide a near-term sales boost for companies like Switzerland's Synthes and British-based Smith & Nephew, according to analyst Chris Donnellan of Evolution Securities.
But a spokesman for Smith & Nephew said the picture was complex and several offsetting factors meant the overall impact of the weather could be broadly neutral.
In particular, while trauma units have seen a surge in incidents, the Arctic weather meant other patients scheduled for elective procedures - such as hip and knee replacements -- had not been able to attend surgery as planned, he said.
And while a good winter skiing season is likely to see more ski-related fractures, the increase may not be material as the recession has hit demand for winter holidays.
The orthopaedics sector has proved vulnerable to the economic downturn in the past year, with many patients deferring elective operations that required out-of-pocket payments.
In the case of Smith & Nephew, that will translate into the loss of around $25 million of hip sales and $38 million of knee sales in 2009 compared to what might have been expected in a normal year, according to Evolution’s Donnellan.
The big question now is to what extent procedures deferred in 2009 will be completed in 2010.
Source: Reuters
In 2008, the ultrasound market in India was valued at $108m. It is forecast to grow at a Compound Annual Growth Rate (CAGR) of 13% over the next seven years to reach $250 million in 2015. During this period the market is expected to be driven by a rapidly developing healthcare infrastructure in rural India and the increasing use of portable ultrasound systems in new applications such as critical care and vascular surgery.
GE leads the ultrasound systems market in India with a 33% market share in terms of revenue. GE maintains its leadership largely due to its broad product pricing range. GE’s sales efforts are equally focused on both its high end systems and also the low end ones. The company keeps gaining market share in terms of units due to its large customer base that buys low end systems. Philips, Siemens and Toshiba Medical follow GE with a combined share of 39%. These companies rely on brand loyalty and extended service contracts for their customers. Other companies include Hitachi, Esaote, L&T, Sonosite and Mindray Medical.
Multiple Advantages Underline the Growing Importance of Integration Strategies in the European Healthcare IT Markets
There is significant potential for system integration markets across Western Europe. Several multinational companies have been venturing into integration solutions for the European healthcare market. Achieving multiple and concurrent access to the same data and the existence of heterogeneous systems remain some of the most significant challenges to integration.
New analysis from Frost & Sullivan, Integration Strategies in the Fragmented Healthcare IT Markets in Europe, finds that the expenditure on IT services by the healthcare service providers in Europe constitutes 20% on application management, 45% on infrastructure management and 35.0% on integration services.
“Integrated systems offer several advantages to the healthcare services arena such as better medical data management, cost-effective service delivery and, patient-centric healthcare,” notes Frost & Sullivan Industry Analyst S. Priyan. “Other benefits include enhanced security and confidentiality of medical data, improved quality of healthcare service and patient safety.”
Apart from the direct benefits of integrated systems, they also assist in the better management of healthcare resources. This has a direct impact on the quality of healthcare service delivered. Healthcare service providers are empowered to make more-informed decisions with lower fatal errors, reduce delays in diagnoses and referrals and avoid repetitive data entries and procedures.
Several authorised users, especially in a large hospital, may try to access or modify healthcare data in the system simultaneously. At the same time, several applications or departments could access the same data. Similarly, many healthcare information technology (HIT) systems vary by functionality and depth of operations or have hardware capabilities built on several technologies. This presents a challenge to effective healthcare IT integration.
“The enormous amount of unstructured, yet sensitive data and the need to maintain its security has been one of the biggest challenges to the healthcare IT market,” remarks Priyan.
The volume of medical data is enormous and still mounting. Such data includes personal patient information, medical history, insurance and financial information, radiology and PACS images and laboratory results. In structuring this mass of data, making it understandable and enabling it to interact with other systems, HIT vendors will have to strive to strike a balance between expense and margins.
“In general, processing and managing healthcare data and functions across integrated systems can help the healthcare sector handle challenges, such as increasing costs, shortage of skilled professional staff,” states Priyan. “It can also satisfy regulatory requirements while managing the increasing burden of chronic diseases and rising patient expectations, effectively.”
Source: Frost & Sullivan
UK Orthopaedic Equipment industry - What’s in Store for 2010?
Few would argue that 2009 was a difficult year for the UK Orthopaedic Equipment industry but early signs suggest that conditions in 2010 will be much brighter. According to new research by leading industry analysts Plimsoll, the market is slowly emerging from the malaise of the last two years.
David Pattison, senior analysts and author of the 2010 Plimsoll Analysis explains, “The recession tore through the market in 08 and most of 09 like a tornado and accelerated the rate of change in the market. Aggressive “growth at all cost” operators have been forced to abandon their reckless strategies and many have been caught out and are in real trouble. However, some amazing companies have come through the recession largely unaffected and look set to make 2010 their year. As the market continues to recover during the year the changes will continue to come thick and fast”.
When pressed on what likely changes he envisages in the market in 2010 he said, “More job losses and consolidations sadly. Even as the market improves there are a lot of companies, large and small, that survived by the skin of their teeth and they have to rebuild their profit margins and efficiencies.
“Our latest analysis projects that a further 1,000 jobs will have to be shed if companies are to get back to profit and remain competitive in 2010. Whether through natural wastage or compulsory lay offs, job losses are necessary. With the average sales per employee figure down to £142,000, employees need to “buy in” and contribute more to the recovery of their companies - if you still have a job expect to work much harder in 2010. £105 million worth of profit has been wiped from the market in the last year and employers have no choice but to cut their cloth accordingly and get more from their resources.”
As for mergers and acquisitions Pattison says, “In all we named 102 companies in our latest analysis that are ripe for takeover or merger with a larger parent. It’s a buyers’ market in 2010 with many companies still recovering from the recession. Our report has picked some great examples of companies that are currently undervalued because of the recession that would be very attractive to prospective owners. For many struggling companies, a buy out may be the quickest route to get the company back on an even keel – even if it means relinquishing their independence. Inevitably, this will further increase job losses as new owners would quickly look for efficiency gains and to synergise their new acquisition with existing operations.”
So, aside from a serious refocus of profitability and the inevitable job cutting and takeovers, does Pattison see any cheer in 2010? “There are some real good news stories out there. We rated 249 companies as “Strong” in our latest report. As expected this number is down compared to previous years but these companies will lead the market out of the downturn. They have managed to be commercially successful without jeopardising their financial stability.”
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