Feature | May 21, 2006

Hologic Hones in on Bone Strength

Speaking Out with Brad Herrington

Brad Herrington joined Hologic as vice president, business line manager, Skeletal Health, in August

What’s so intriguing about extremity imaging that Hologic is delving into it with such intensity and passion?
If you know Hologic, you know we are a company filled with associates that act with intensity and with passion. Hologic associates share a common goal – the desire to extend the lives of women through the development of technologically superior diagnostic imaging systems.
Each year, more than one million women are diagnosed with breast cancer, while hundreds of thousands of them fall victim to this dreaded disease. In addition, osteoporosis affects more than 200 million women worldwide. The rising number of osteoporotic fractures and their associated morbidity place an increasingly heavy burden on future healthcare resources.
A few months ago, we announced that we had signed an exclusive agreement with Esaote, the world leader in extremity MRI imaging. Our agreement gives us exclusive distribution and service rights for leading Esaote product lines including their C-scan and E-scan systems. E-scan is a dedicated in-office system that offers outstanding image quality and a full range of musculoskeletal applications, including shoulder, knee, hip, elbow, wrist, hand, ankle and foot imaging. The open design of the E-scan system accommodates patients of all sizes, from the smallest child to the largest athlete, providing a comfortable scanning experience. C-scan is a dedicated extremity MRI scanner designed specifically for imaging arms and legs. The small size and dedicated extremity design is very popular with physicians and patients alike.
With our recent move into extremity MRI imaging, we are expanding our offerings to capitalize our strong distribution and service networks in the U.S. Already, our growth in sales in this new business has beat our forecast and it appears 2006 will be an outstanding year for us in extremity MRI sales.
All this said, you should remember that we are primarily a women’s imaging company selling technologically superior products in markets across the world.

Extremity imaging represents roughly one quarter of the total number of MRIs performed, so why pursue it, particularly if the revenue potential is more limited or difficult to achieve?
Extremity MRI systems are the fastest growing segment of the MRI market. We are targeting our efforts to sell and service these systems in the orthopedic and rheumatology centers.
Faced with intense competition from insurance conglomerates and HMOs, in addition to onerous Medicare regulations and declining reimbursement rates, orthopedic and rheumatology groups are fighting back using proven strategies gleaned from big business and successful practitioners in other specialties. They are providing a combination of cost-effective, superior-quality services and patient-friendly, convenient care.
The rapid advance in MRI technology followed by the reduction in acquisition and installation costs now makes it possible for orthopedic and rheumatology groups to offer “same-day, one-stop” diagnostic services to patients — a distinct competitive edge. The clinical acceptability of the latest generation of low-field-strength extremity MRI scanners can provide practitioners with a veritable second opinion for ankle, knee, elbow and wrist complaints, according to experts.
Because orthopedists and some rheumatologists read their own radiographs, the addition of magnetic resonance images to their diagnostic repertoire is no surprise. The big news is that rather than referring patients elsewhere, orthopedist and rheumatologist practices can have their existing technologists trained and certified to take MR scans while utilizing off-site radiologists to over-read and interpret the musculoskeletal images within 24 hours or less — making MRI an ancillary service.

What makes bone imaging and treatment so attractive to primary care offices to the extent that these organizations are willing to invest in 3-D technology and extremity MRI systems?
I see this as two questions. Why do we see a profitable market for emerging technologies like 3-D imaging in osteoporosis assessment? And why do we see a growing opportunity for extremity MRI systems in the primary care market?
Although some may think that the bone density market is somewhat static, the market for osteoporosis assessment products is highly competitive and characterized by continual change and improvement in technology. If you research our product introductions in this area, you’ll see a significant new launch almost every 12 months.
At RSNA 2005, we previewed 3-D imaging, our newest area of bone density assessment research – a collaborative effort with The Johns Hopkins University Center for Computer-Integrated Surgical Systems and Technology.
While 2-D bone mineral density is currently recognized as one of the best predictors of fracture risk, we believe the accurate assessment of complex femur structure requires a 3-D volumetric density model. Our patented rotating C-arm capability on the Discovery bone density systems allows us to acquire multiple low dose views of the femur to construct a 3-D volumetric model of the femur.
We believe that a low-dose tomographic assessment of bone density and geometry may provide the ultimate clinical tool to discern bone structure and strength
Now for your second question — why do we see a growing opportunity outside of hospitals for sophisticated technologies like extremity MRI systems?
As you know there is a growing trend for primary care doctors to provide more services in their office. Physicians are moving their practices away from managed care and toward market approaches that will increase their compensation and decrease their hassle factor. Most doctors are now specialists. Physicians now have more opportunities to generate income by providing services that used to be only found in hospitals. Ambulatory surgery centers, walk-in clinics, out-of-hospital diagnostic laboratories and radiologic centers, and all types of home care have been expanding rapidly, particularly under the entrepreneurship of investor-owned businesses.
Seeking to protect their income in an increasingly competitive environment, more and more physicians have been participating in these ventures, either as proprietors, partners or investors. Physicians have also been adding more technical equipment to their office to enable them to conduct many tests and diagnostic procedures that might formerly have been done in the hospital.
Our new line of extremity MRI systems allow physicians to provide imaging at the time of the first office visit, speeding up diagnosis and treatment, while offering greater patient convenience. This capability allows patients to ‘get back in the game’ in a shorter period of time, eventually reducing overall healthcare costs. And these systems offer a significant revenue opportunity for the imaging practice. Our analysis shows that a practice can break even with just one extremity MRI exam a day using our C-scan system.

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