Decline in demand in private practices points to slow growth for diagnostic ECG devices

Medical technology firm Millennium Research Group (MRG) reported Jan. 26 that declining demand in private practices for diagnostic electrocardiography (ECG) devices will contribute to slow growth in the United States market, despite the growing number of older patients who require the use of these devices. MRG said reasons for declining private practice demand range from Medicare funding cuts to the impact of accountable care organizations (ACOs).

Medicare funding cuts have had a significant impact on independent cardiologists’ annual revenues, with the result that a significant number of private cardiologists in the United States have sold their practices and moved into hospital medical centers, MRG said.  These clinics were major purchasers of resting ECGs, stress ECG systems and Holter systems, which will see a sales decline as a result, the research firm noted. These effects are expected to continue through 2016.

At the same time, the increasing popularity of ACOs will have a negative effect on the U.S. sales of stress ECG systems. The mandates to lower overall healthcare costs and to designate procedures to the healthcare settings best suited to providing each medical test at the lowest cost will drive procedures to larger facilities and limit sales of stress systems, MRG said.

In addition, a movement to more open interfaces means that purchasers are no longer limited to the software solution provided by the ECG vendor. For example, companies such as Agfa Healthcare and Epiphany Cardiography Products have been successful in converting hospitals to their vendor-neutral ECG data management solutions, MRG reported. This trend will become increasingly significant in coming years as more ECG manufacturers enter the market with devices using the DICOM standard, providing care organizations with more options for data management solutions for their resting and stress ECG products, MRG added.

“On top of these existing market trends will come the effect of the American Recovery and Reinvestment Act,” said MRG Analyst Mickel Phung. “ARRA has introduced incentive funding for the adoption of electronic medical records. Adoption of ECG data management solutions has been spurred by EMR adoption, as care facilities purchase data management solutions to integrate with their EMR. This will further encourage the decoupling of software from devices, allowing for their purchase from separate vendors. The increased competition will limit selling prices.”

The overall market for diagnostic electrocardiography devices in the U.S. will reach a value of nearly $366 million by 2016, MRG reported.