In a New York Minute

Ms. PACS: “Ford, GM: Bankruptcy Is Not an Option,” “Dow Falls Below 8000” and “Banks, Insurers Keep Falling” – all of these headlines appeared on today’s cover of the Wall Street Journal online. When it rains it pours – and this time not even the Morton’s Salt people will cash in on that slogan as their stock, or that of its parent company, Rohm and Haas Company (Public, NYSE:ROH), slid today too.

Sounds like we are on a slippery slope. But there is a light at the end of this – hopefully short – tunnel. Think about it – life without salt, in particular Morton’s Salt – the #1 consumer salt maker in the U.S., which sells industrial and consumer salts from under a big umbrella held by a little girl in a yellow dress – would be bland and slippery.

Like all necessary evils, things become commodities because they are a part of everyday life. So, does PACS fall under that umbrella too, and will all of this financial uncertainty lower the value of PACS? Maybe. I mean, who can afford to buy a PACS now? The PACS vendor might respond - you can’t afford not too – but you would only believe that line if you were expanding your business and a new PACS really kicked your productivity into high gear. Not so many places are in expansion mode right now, however.


Lets look back. Just a couple of years ago, when you thought radiology PACS was becoming a commodity, vendors discovered replacement PACS as the next great hope, despite the fact that these types of sales are typically costly and difficult. And PACS vendors started hitting up the rural hospital and imaging centers who were late to the digital game, but that has been a lot hassle for less money.

So, where to next? Industry “experts” have been saying that integrated cardiologywide or enterprisewide systems are reviving market growth for PACS and should drive sales in the next several years. However, we are reminded, these implementations are dependent on the replacement cycle of cath lab information systems.

So I pose the question to you – oh Nostradamus of PACS – will cardiology PACS in fact save PACS from depreciating in value, or is its fate similar to that of salt, where even though you’ve got to have it with every meal, it’s cheap and is quickly becoming a commodity. In the case of PACS, eventually morphing into a web-based service application?

The best scenario would be if you threw salt on your PACS – its something you’ve got to have, even though it gives you high-blood pressure, and after a heart attack it lands you in the ER, then on the table in the interventional suite and later you’re wheeled off to the ICU to recover. During all of this door-to-balloon-to-recovery time, you’ve taken at least one CT scan, possibly an MRA, and for sure an angiogram, and you can expect at least one follow-up CT down the line – creating a need for cardiology PACS, which is what we said would save the PACS market in the end…in the first place.

PACSman: I have to wonder sometimes if people actually read the newspaper or turn on the news. Call it what you will but we are either in a recession, depression, or just serious deepness. I seem to be getting a lot less for my dollar and a lot fewer dollars for my work. I feel like a radiologist except my income hasn’t quite hit those levels yet….plus the thought of doing a BE doesn’t thrill me either. I had enough of that changing diapers when the kids were much younger…

I’m also looking at the prices of stuff lately and shake my head….I love concerts but even I have to draw the line at some of the prices for these tickets. I grew up with The Eagles and would love to attend their concert in Orlando the end of January but…. $400 and up for a single ticket? I doubt I’d pay that for a personal audience for the Lord himself including a signed autographed photo of the two of us together. Although…. maybe….that just depends on my mood…or if He is willing to finance our “visit”….I’ve always said that before I get the thumbs up or thumbs down on which direction I’m going that God and I are going to sit down over a big ole plate of artery-clogging chicken wings and a pitcher of beer and talk about what had gone on in my life- why what happened happened and stuff like that. I know it’s all about His plan and such but I’m 95% sure God is a woman too- it’s always on His terms and everything happens in His time. If that’s not a woman for you than what is? OK, I digress.

Adding insult to injury I get an e-mail that I can eat at the arena before the concert- for $37.95 PER PERSON. I’m like- have they seen my last year’s tax return? Obviously not!! And that excludes liquor. Heck, I can eat for half as much at Hooters and get a pitcher of beer thrown in as well. So this is a $1,000 minimum night….and there is no one in my life these days whom I can justify spending that kinda money on. For that matter I don’t know if there has EVER been anyone in my life worth spending that on…although I did take a very good friend to see Neil Diamond a few weeks back and we literally had front row center tickets…for $99 each…which costs me less than the nosebleed tickets I had bought months earlier. Ticket discounters take what they can get for tickets that haven’t sold a few hours before the concert starts so….these were amazing…

It’s also another world in the front…I’m a cheap seats kinda guy and never imagined what its like to be ten feet away from the performer…and Neil also doesn’t look too bad for a guy who is 67 either….But the others around us…

I loved the doc behind us who made a rock look rhythmic and his wife who was pharmaceutically oblivious to everyone and everything around her; the new money kids to our left who must have thought they were at a country concert consuming everything alcoholic imaginable in threes and dancing in the aisle; and the four BBW’s who conveniently occupied the empty seats next to us and knew every lyric to ever song, almost poking my eye out with their arms flailing and causing a 30% hearing loss in my right ear with their deafening screams…Another world indeed…..

So what does this all have to do with PACS? I was looking at a table from Datamonitor that defined Global PACS Growth through 2011 and have to question that, if this is accurate, how the PACS market will sustain itself? Can it afford $400 concert tickets when software sales show flat to negative growth and hardware sales show at best 20% growth over all five years (and where most of the costs are either passed through or carry negligible margins). Growth is projected to grow in the US, Canadian, UK and Nordic markets from about $3.75M to $6M but the vast majority of that growth is in the services arena….and while people hate to eliminate services, the services sector is not immune from negotiation or cutbacks either. The days of companies tacking on a flat 30-70% of the sale price for “services” are gone, as are end users accepting a flat 15-20% of system list annually for service as the norm. End users are beginning to question “What am I getting for my buck?” just as I questioned what I would be getting for my $400, $800, or $1800 ticket (which is what front row tickets are going for now). If I didn’t have two teenaged sons around and knew where to score some herbal substances, I’d put on a CD (or one of my old albums- the scratches and pops never bothered me), kick back, and enjoy…imaging myself in the arena….with Don Henley, Glenn Frey, Joe Walsh, Timothy Schmit, Don Felder, Randy Meisner, and Bernie Leadon and bringing me back to my youth….as the clouds of smoke surround me..(laugh). But alas, it’s been 30 years or so since I was young and carefree and had friends who could hook me up so….I’ll just make due as best I can here…Many PACS purchasers may be doing the same….thinking about buying a system but instead just making do with what they have another year or two…

God help us if this economy doesn’t turn around, although surprisingly it has been a blessing for me… I’ve been hired more times that not recently to play Kevin Costner to the hospital’s Whitney Houston- ready to take the bullet if their decision isn’t done right- and thankfully most of my clients have listened to my advice…There is too much at stake career-wise not too…and too much to lose by spending money where it isn’t needed as well…

Life in the Fast Lane? Pretty Girls All in a Row? Tequila Sunrise? Ah the good old days….but I’m way beyond that…Any more though things are closer to A New York Minute….”….you better hang on tooth and nail. The wolf is always at the door. In a New York minute, everything can change. In a New York minute, things can get a little strange…”