Dr. Bernd Ohnesorge, 35, became Vice President in Siemens Medical Solutions Computed Tomography (CT) division in May of 2003 after serving three years as global segment manager for Advanced Clinical CT and two years as a development project and product manager. Dr. Ohnesorge is responsible for the global CT marketing and sales of Siemens CT. He is a member of the CT division’s global executive management board.
Dr. Bernd Ohnesorge
Bernd has been involved in CT innovation since 1994, when he launched his career at Siemens. He began by developing CT processing algorithms as part of an international team that launched the so-called multi-slice CT technology as a new standard in medical CT imaging, and coordinated related clinical trials for the establishment of new clinical CT applications.
Dr. Ohnesorge earned his Master’s degree in August 1994 at the University of Erlangen-Nuremberg, Germany, where he specialised in data communication and digital signal processing. He finished his Ph.D. thesis on methods for cardiac CT imaging in June 2002, as an affiliated research fellow at the Institute of Clinical Radiology of Ludwig-Maximilian-University in Munich, Germany.
The following interview with Dr. Ohnesorge was conducted by Frost & Sullivan’s Industry Analyst, Srividya Badrinarayanan.
Frost & Sullivan: What according to Siemens Medical Solutions is driving the European medical imaging industry?
Dr. Ohnesorge: Generally speaking, the medical industry is a growing field, driven particularly by the rising elderly population and the rising demand of people for state-of-science medicine. This holds true both for Europe and the world – but results in rising cost pressure for healthcare providers around the globe. The major challenge today is therefore to further improve the quality of care and at the same time to reduce its costs – with the patient always in focus. That challenge is also the opportunity for innovation and for companies to grow. So we believe this is a very healthy business, and this is true not just for Europe, but for the rest of world as well. Within this ambit, it is not just about supporting innovation on the equipment side but also on the IT side. If you look at imaging technology, one of the trends is to provide fast and ready access to new applications for a faster and more accurate diagnosis and effective treatment of diseases while at the same time, to improve workflow by powerful software systems – in particular, networking of data between traditional modalities such as CT, MRI and other potential modalities. The IT solutions also are to have data access anywhere and anytime, within the hospital as well as outside with referring physicians. I think these are key trends that we all acknowledge – that imaging modalities and the IT world are moving closer and closer together. It is our opinion at Siemens, therefore, that healthcare will always be an extremely important issue.
Frost & Sullivan: How are the healthcare systems across Europe contributing to these trends? For example, we have seen the National Health Service (NHS) in the United Kingdom start modernisation plans. Do you think any other country has started such initiatives, and will they impact the market in a positive way?
Dr. Ohnesorge: Absolutely. In Europe, in particular, healthcare systems show some differences. For instance, in countries like Germany and Italy, there is both a strong public component to the healthcare system and also a strong private part, whereas in other countries such as the United Kingdom, France and Scandinavia, the public part has a far bigger portion. But I think the basic decision to invest in different technologies is independent of the system. I think it is independent rules that drive clinical innovation and the improvement of quality of care, while reducing costs. We do see and appreciate the innovativeness and openness of government-driven organisations such as the NHS in the United Kingdom and others in looking at new, emerging opportunities and improving quality, reducing cost and investing in the right technologies. So the recent cancer plan in the United Kingdom has obviously contributed to improving the distribution of most advanced technology. It’s the new applications that drive this, and also the right people making the right investment decision.
Frost & Sullivan: You just mentioned the importance of IT innovation from the vendor side and the increase in applications. Do you think reimbursement of new applications and technologies is also driving the market?
Dr. Ohnesorge: Definitely. The long-term impact of any application can only be sustained by proper reimbursement or by a proper finance solution behind it. We do see though applications that are not yet reimbursed are still viable because they improve quality of care. Technological innovation is usually quicker than reimbursement to follow. On a long term basis, reimbursement is mandatory, but there is a transition phase wherein research studies will be done based on individual financing solutions, and applications can also spread for certain periods of time while reimbursement is still being considered.
Frost & Sullivan: Where are the opportunities for medical imaging vendors, for Siemens? The medical imaging market is per se dominated by three big players. How open are the public and private in adapting to these new applications which the industry is seeing very frequently?
Dr. Ohnesorge: Generally speaking, the opportunities are in the mentioned direction. There are possibilities to improve the application spectrum of individual modalities like computed tomography (CT), magnetic resonance imaging (MRI), angiography systems, and nuclear medicine (NM), and, at the same time, to show that the entire solution can be provided to the hospital with the right IT technology behind it. This combination of innovative technology and IT is the key to improve both quality of care and efficiency in the health sector. The difference between the public and private market is not so big. If we want to grow – which we do – and to increase our market share, then we have to address both segments. The dynamics might be different, but the general rules on where to invest and what equipment to choose are basically the same.
Frost & Sullivan: For example, let’s take the 64-slice CT scanner introduced by Siemens. How has it changed the face of the diagnostic imaging industry in the fields of cardiology and neurology?
Dr. Ohnesorge: When we designed the SOMATOM Sensation 64, we looked very carefully at what we needed to do in terms of technology to really push key growth areas of clinical applications. The cardiovascular applications were clearly one, if not the key area of focus. So we particularly concentrated on technology that improved the temporal and spatial resolution in way that such new, emerging applications could find their way into general clinical practice. The cardiac applications, in particular the imaging of the coronary arteries, are one of the key examples where the 64-slice scanner such as SOMATOM Sensation 64 has led the way. While cardiac CT is a very attractive proposition, from a general practice point of view, future applications would very much be driven by large hospitals in the research environment. Now this application needs to move into the general clinical practice. The published clinical trials show that the methods’ robustness is on a level that it can generally be applied for the right patient indications. Now all the data is under review worldwide for reimbursement policy. There are now serious considerations having this application reimbursed at a broad level to improve patient care. So coming back to the question of whether it has changed something? Yes, it has absolutely led the pathway to new applications, particularly in cardiac imaging and in the care of acute patients, especially in acute chest pain patients, where it has really changed paradigms in how to manage such patients in the hospitals.
Frost & Sullivan: So could we say something like that the 64-slice CT scanners would try to replace the cathlabs more from a diagnostic point of view but not from an interventional point of view?
Dr. Ohnesorge: It will certainly be a viable alternative for a select group of patients, and with the technology evolving, this group is becoming bigger. I think it would not be fair at this point to say that in diagnostics, it would replace cathlabs. We are not looking for replacements but are looking for viable alternatives for patients with a low likelihood of benefiting from invasive intervention. So replacement may not, at this point, be an option, but it will represent a growing alternative solution for the respective patient indications.
Frost & Sullivan: And it would be indirectly complementing the cathlab market also?
Dr. Ohnesorge: Yes, certainly... Looking at coronary artery disease, there’s a diagnosis chain in place regarding what you do when, with what sort of indication, for which patient. In case the patient has significant symptoms and it’s quite obvious he will have coronary artery disease, the choice will always will be to transfer to the cathlab. But for the large number of patients who have a low likelihood and unclear symptoms, CT can be a real viable possibility to avoid an invasive exam. More patients having access to a non invasive and comfortable exam means that there is potential for more patients to undergo a comprehensive diagnosis of their coronary arteries than would have otherwise undergone an invasive examination. So it’s opening the horizon for more patients to make sure whether they are ok or not.
Frost & Sullivan: And how open have the healthcare systems across Europe been to adopt diagnosis using a CT scanner, since diagnosis has generally been through Cathlabs?
Dr. Ohnesorge: Their openness is certainly growing. We see more and more hospitals investing in CT as a standard tool in their diagnostic workflow for the management of patients under suspicion of coronary artery disease or general cardiac disease. It’s a general spectrum that goes into other areas too. It goes into interventional plans for electrophysiology applications and even paediatric imaging to look at anomalies at an early stage. So it’s definitely growing, and it is so significant that about a third of our business in the 64-slice technology segment is in the cardiovascular market, which has dramatically changed from previous technologies, where it was about ten per cent.
Frost & Sullivan: If we compare Europe with North America or the rest of world (like Asia), how would you compare prospects for 64-slice CT?
Dr. Ohnesorge: In terms of the general application spectrum, we see a broad trend of very quick adoption of 64-slice CT as a top of line technology with very rapid worldwide distribution. In the meantime, we have installed more than 350 systems in the world. It is interesting though that in Asia, in particular, the interest in cardiac CT is now ramping up very quickly. So the dynamic in Southeast Asia and also Japan is that of real rapid growth in investment in 64-slice CT primarily for cardiac applications, whereas growth in Europe and the United States is of a more steady and continuous nature. We see almost an explosion in Asian countries, including India.
Frost & Sullivan: Do you expect more of such trends in Southeast Asia and Japan?
Dr. Ohnesorge: We see the trend continuing along similar lines. The 64-slice scanners have been in the market for just about twelve months, and this trend has started and will continue.
Frost & Sullivan: The 64-slice CT has been one of breakthroughs in the CT segment. What do you think are the other major developments expected in the CT arena after a year or so? Is it going towards 256-slice CT scanner, or what are the future trends that you see in this segment?
Dr. Ohnesorge: It would be interesting if we look at the past. The evolution from 4 to 16 to 64-slice was a pretty straightforward development because we did more of the same – improved temporal and spatial resolution and faster scan periods. Now with 64-slice scanners, we can cover every organ in highest resolution without breaking any natural physiological limits. That’s how, within a single breath-hold, we can scan the heart in ten seconds or less. This really makes it a challenge for technology providers to make a right decision on how to move forward from a technology perspective.
So, it’s a good thing to start from clinical applications. We believe that there are two major trends that need to be considered when making the right decision about how to move in the future. One is further substantial growth in the direction of cardiovascular imaging and cardiac imaging, in particular, where there is still a lot of room for improving the temporal resolution. On the other hand, we see significantly more trends being driven by healthcare economics – CT is being used progressively earlier in the diagnostic process in order to achieve general reduction in healthcare costs. The earlier you get a comprehensive diagnosis in the chain, the shorter the time the patient will spend in the hospital. This helps both the patient and the healthcare budget. So these are the two trends we are taking very seriously from our technology standpoint.
Simply adding more slices is not necessarily the answer to those two questions. In particular, we believe that further improvements in temporal resolution are the key. At the same time, we will continue to look at possibilities of improving the contrast resolution to reduce general dosage levels in terms of both radiation and contrast agents. This is where we see key priorities for our technology in the future, and we don’t believe that increasing the number of slices will be the right answer to those questions. Definitely, increasing the amount of data will continue, but it will not necessarily be as simple as the evolution of technology steps from 4 to 16 and to 64. So, we don’t see the best answer in 128 or 256 slices.
Frost & Sullivan: There are some companies that have started R&D on 256 slices. Do you think this might be a trend that could be seen in the future?
Dr. Ohnesorge: In general, I believe every company, including us, is looking at the potential of larger area detectors in CT, with all companies doing major research activities in that area. For example, we have a 768-slice scanner in research environment at MGH in Boston, where we explore the system concept and application potential of a technology which can cover ten to even 18 centimetres simultaneously to image entire organs. And this is something that one has to look at from a basic technology perspective. But there is a lot of work to do to explore the real clinical views for this and we don’t see it as the next best possible technology.
Frost & Sullivan: With an increase in applications and technology innovations coming up, where do you think the opportunities are for small vendors in the European imaging industry?
Dr. Ohnesorge: In the bigger imaging modalities, certainly we saw and do see some strong consolidation where the large vendors dominate the market. We do see though innovation potential in the direction of software and IT solutions. We see innovative third party workplace companies providing great contributions to improving workflow and speed of examinations. But there are obviously also the big vendors who are investing to make sure that they are able to provide a comprehensive solution to the customer which includes equipment as well as workflow and workplace products. This is interesting because it turns the focus of the market, as competitors are also growing in some areas where focus wasn’t so big in the past. So major scanner manufacturers will have to make sure that they invest in the right direction to be competitive, also in IT and in workplace technology, and to take other third party workstation companies like Vital Images or TerraRecon into their competitive map rather than only GE, Philips and Siemens.
Frost & Sullivan: With Siemens being one of the largest companies, you might have faced some challenges in the medical imaging industry. What were the major challenges you faced, and what strategies did you adopt to emerge successful in this market?
Dr. Ohnesorge: Within CT, there are two major new challenges that are also true in other modalities. It is to get from being a technology provider to becoming a solution provider, to think more clinical versus being technology oriented, and to exactly understand the customers and their needs to develop the right product. The solution to this is that we include or invite our key customers very early in our product development, develop innovations with them, have them as advisors to know what the healthcare trends are and consequently, develop the right products at the right time. As part of this, it became obvious that an expanded portfolio that includes a focus on IT solutions (especially workflow and software solutions), is becoming vital. This is an area where we have invested significantly over the last one to two years, and now Siemens as a company has become very competitive in providing advanced workflow and workplace solutions.
Another very important development, especially if you look at CT, is the extremely fast product innovation cycle. Here, companies have to re-think strategies about selling new equipment after a couple of years when the system is old, and move towards real partnerships with the customer to jointly develop the right workflow at the hospital site, to share information, and to consult in terms of the portfolio. So it’s really the movement from sales and customer or vendor-customer relationship into true partnerships where innovation is included as part of a common strategy. So, one of the key movements right now is how to cope with extremely rapid innovation.
Last but not least, our success is also the result of our optimal operational excellence. Our internal concept is called P3, which stands for "people, processes and products". It means, in short, that a stimulating atmosphere is necessary, in which highly motivated and creative employees (people) are able to work enthusiastically on trendsetting innovations (products) – supported by an efficient process structure from the first idea to the final product. As a result we are today able to say that we register three patents per working day and that three quarters of our products are younger than three years.
Frost & Sullivan: And what would you suggest be the other strategies which the technology or solution providers adopt in future to maintain their position or grow in this market?
Dr. Ohnesorge: From a very general perspective today, there is a key movement wherein medical equipment companies are turning from pure equipment providers into solution providers in terms of having a comprehensive portfolio of modalities and underlying IT solutions. Coming trends are clearly to expand the scope into totally new ways of doing diagnosis like genetics and molecular imaging, where totally new diagnostic possibilities come into sight. For this, we have made a strategic investment by acquiring CTI – a company that’s particularly active in the field of molecular imaging and is strongly positioned. This also demonstrates our long-term view that the imaging company of today has to expand its scope in the molecular market, molecular biology, and in the genetic market and genetic diagnosis in molecular imaging.
Frost & Sullivan: Siemens had launched 64-slice CT scanners, and so did other companies. How have you tried to overcome this challenge?
Dr. Ohnesorge: First of all, we are proud we were leading in that game; in time to market. We were the first to introduce the 64-slice CT, and also to deliver it to the market. That’s why we have significant leadership now in terms of installed base. Obviously, the time advantage helped in order to develop the right protocols for the right applications; to have the technology at such a level of maturity that it is very reliable in the general market – versus other companies who are just starting to learn to deal with the technology and to optimise protocols in clinical practice. So the time advantage continues.
There are two key elements due to which we believe that, even with other companies starting to deliver this technology, we will keep our competitive advantage. First in the way we designed the system. Frost & Sullivan decided to award us because of the design that particularly focuses on improving image quality and temporal and spatial resolution, which counts for the clinical applications, while other companies have chosen a very technology-oriented approach by simply adding a number of detectors rows. This does not have obvious clinical benefit.
Also, what is more important is that Siemens has the best partnerships with leading academic institutions across the world, in particular in Europe and the United States. In the United States, eleven of the top 15 and respectively the top five hospitals utilise our technology and work with us on optimising it for clinical practice. That’s a competitive clinical advantage in know-how which is crucial for long standing success. And we will continue to push along those lines and develop technology not for the sake of technology, but to answer the clinical questions. We believe that the simple evolution of adding a few more slices is not the right path.
Frost & Sullivan: We could say that the success of Siemens’ 64-slice CT is its focus on highlighting the clinical aspects of CT scanner applications.
Dr. Ohnesorge: Exactly. It’s the primary goal of our development efforts to meet clinical needs and to answer clinical questions. This way we were able to introduce our system more than nine months earlier than the competition, with the very strong support we have from opinion leaders that have helped us actively develop the technology and the clinical applications.
Frost & Sullivan: You mentioned that Siemens has more than 350 64-slice scanners installed worldwide. So if you look one year down the line, how much would you expect the market for these types of scanners to be?
Dr. Ohnesorge: We are probably looking at a total market of about 800 to 1,000 scanners per year. That’s what we believe is the volume in a mature market when all vendors are able to provide the technology, and the obviously related growth in installed base.
Frost & Sullivan: Any other opinion or perspective that you would like to give us on the medical imaging industry.
Dr. Ohnesorge: To add key strategies from our side, we are a company which really focuses on clinical applications and which wants to and is turning itself from a technology provider – and as we confidently say, from technology leader – to a clinical trendsetter, and we want to work with our customers to provide better patient care. In order to do that, we have to invest in R&D. We invest around eight to ten per cent of revenue in R&D, which is a strong contribution in order to improve our position of being a trendsetter in the market, and also to improve healthcare.
Dr. Ohnesorge, thank you very much for your time and answers.
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