International Medical Markets 1

U.S. Medical Market 1

Inflation and Price Indices 2

Declining Number of US Hospitals 3

Cardiac Output Market Directions 3

Cath Lab CO Market Trends 4

Invasive PA/CO Trends 4

Abbott Introduces SvO2 – Displaces Baxter 4

Baxter Develops Continuous Cardiac Output (CCO) 5

Baxter Combines CCO and SvO2 In Vigilance – Regains Invasive Market Position 5

Approximate Invasive PA Catheter Market Shares 5

Differences in International Market Product Requirements 5

US Embraces More Sophisticated PA Catheters 6

Non-Invasive CO Technology 7

BioImpedance Non-Invasive CO Approaches 7

NEW Non-Invasive Modified FICK Cardiac Output Devices 8

Pulse Contour Hemodynamics – Less Invasive 9

Non-Invasive Esophageal Doppler Monitor (EDM) 10

EDM Application Areas 10

How EDM Works 12

Cost of ICU Complications – Associated with PA/CO Monitoring 15

Non-Invasive Displace/Compliment Invasive Technologies 15

Non-Invasive CO Associated With Reduced Costs 16

Balance of CO Technologies in ICU and Perioperative Settings 16

Non-Invasive CO Technology Has Potential Home Care Applications 17

Non-invasive Home Care Reduces Hospitalizations 17

Forecast of CO market from 1998 Through 2002 19

Factors Affecting US Non-Invasive CO Market 19

Consolidation of non-invasive Vendors With Traditional Monitoring Vendors 20

Forecast of Invasive CO Units in Hospital ICUs 21

Market Shares of Traditional Monitoring Vendors 22

Invasive and Non-Invasive Operating Room CO Forecast 23

Other Hospital Markets for Non-Invasive CO Monitors 25

1997 Perioperative Invasive CO Hospital Demographics 27

Trends in US Surgical Procedures 27

15 Year Trend in US Procedures 27

Thermal Dilution CO Integrated Modules in Vital Signs Monitors 28

Accelerating Replacement Cycle in OR 29

No Up Front Cost CCO Marketing Strategy 29

Barriers to New Technologies 29

Overview of Surgical Procedures Performed 29

OR Procedures Likely to Require CO Measurement 30

Shift to Day Surgery 31

Combination Technologies Poised to Enter Market 32

1997 ICU Catheter/CO Market Size in US Hospitals 33

Overall ICU Market for Cardiac Output 33

CO Technology Dispersion in ICUs 34

Finer Analysis of ICU Units 35

Emergency Department CO Markets 37

Emergency Department (ED) Utilization Trends 37

Non-Invasive Technologies in ED 40

ED Candidates for Non-Invasive Hemodynamic Monitoring 40

Correlation of TBI to Patient Survival 40

Non-Invasive Hemodynamic Monitoring in CHF Management 41

Invasive Modalities Required for Pacing and Shock Patients 41

Fick May Have Limited Role in ED Assessment 41

Appendix 1 - Background on PA Catheter Hemodynamic & CO Monitoring 43

PA Wedge Measurements 43

Potential for Pulmonary Infarction 44

Catheter Tip Placement In Lung A Key to Measurement Accuracy 44

Common Calculated Hemodynamic Parameters 44

Normal Cardiovascular Pressures : 45

Normal Hemodynamic Parameters : 45

Cardiac Intensive Care Medicine : 45

Noncardiac Intensive Care Medicine : 45

October Article By Dr. Conner Stirs Controversy 46

Who Gets Invasive CO PACs Now? 47

VASCULAR COMPLICATIONS 47

COMPLICATIONS of PA CATHETERS 47

Cost of Invasive Hemodynamic and CO Monitoring 47

Appendix 2 - Evolution of Pulmonary Artery Catheters Measurements 49

Overview of PA Catheters 49

Newer PA Catheter Models 49

Right Ventricular Ejection Fraction PA Catheter 50

Continuous Cardiac Output PA Catheters 51

Cardiac-monitoring catheters. 51

Appendix 3 - Background on Invasive Cardiac Output Monitoring 53

Traditional 4/5 Lumen tdCO Measurements/Catheters 53

Cost and Labor Intensity of tdCO 53

Dye Dilution Unsuitable for Serial ICU Use 54

Traditional tdCO Measurements Are Infrequent 54

Continuous (Frequent Serial) Measurement of CO Sought 54

One Successful Non-Invasive Technology 54

Variations In Performance of Non-Invasive Technologies 54

Advice to Would-Be Non-invasive Newcomers 54

Continuous INVASIVE Cardiac Output 55

Catheterization and Clinical Outcome 56

PACs Justified Only When Therapeutic Course or Outcome Changed 56

Overview of PAC/CO Clinical Controversy 56

Appendix 4 – Evolution of Non-Invasive Cardiac Monitoring 59

External Ultrasonic Approaches 59

Transesophageal Echo ("TEE") 60

Doppler Technologies Accuracy Issues 60

Evolution of Thoracic Bioimpedance 61

Parameters Derived From BioImpedance 61

Original Bomed Product Failed in Market – Tainted TBI Approach 65

Renaissance Technologies and Sorba Introduced Improved Units 65

Non-Invasive Technology Companies Find Mixed Success in Market 66

CO Business Undergoes Consolidation and Unit Expansion Simultaneously 66

Appendix 5 - Suppliers of Invasive Cardiac Output Devices 67

Appendix 6 – Issues with PA Catheter Use 69

Safety and Efficacy of Invasive PA & CO Monitoring 70

The Pulmonary Artery Catheter: Accuracy and Safety 70

Introduction 70

Set up 71

Waveform identification 71

Waveform interpretation 71

Derived indices 71

Safety of the PA catheter 71

Complications 72

References 73

Part II – Corporate Profiles 82

Corporate & Product Information 53

Applied Biometrics, Inc. 54

Baxter 59

Biosensors International Pte Ltd 60

Cardiodynamics, Inc. 61

Columbus Instruments 65

Deltex Medical, Inc. 69

Ferguson Medical, Inc. 72

HEMO SAPIENS, Inc. 74

Marquette Medical 77

Renaissance Technologies 81

Sorba Medical 82

Table of Figures

Table 1 - US CO Revenue Projections - 1997 Through 2001 8

Table 2 – 1997 Non-Invasive CO Market in US Hospital ICU 10

Table 3 – 1997 Invasive CO Forecast for ICUs 10

Table 4 – Vital Signs Monitoring Company 1996 US Market Shares for High Acuity ICUs 11

Table 5 – 1997 Invasive Operating Room CO Market 12

Table 6 – 1997 Non-Invasive Operating Room CO Market 12

Table 7 – 1997 Non-Invasive CO - Other Hospital Markets 13

Table 8 – Data on US Surgical Operations Performed 14

Figure 9 – 15 Year Trend in Surgical Procedures 14

Table 10 - 10 Most Expensive Surgical Procedures & 10 With Longest Recovery 16

Table 11 - Typical Length of Stay and ICU Utilization for Various ICD-9 Codes 17

Table 12 - Potential for Shift in Surgical Procedures to Day Surgery 18

Table 13 – Gross Breakdown of ICUs in US Hospitals (Unpublished AHA data) 19

Figure 14 – Finer Analysis of US Hospital ICU Types 20

Table 15 - Frequency of Medical Procedures in ICUs 21

Table 16 – Technology Application in US ICUs 21

Table 17 – Overview of US Hospitals with Emergency Departments 22

Figure 18 – Parameter Changes Characteristic of Shock States 27

Figure 19 – Typical Traditional Swan/Ganz PA Catheter 33

Figure 20 – Comparison of Response to Step Change in CO for Abbott and Baxter CCO Devices 35

Figure 21 – Cardiac Output Manufacturers and Their Products 46

Figure 22 – PA Catheter US List and Average Selling Prices 47

Table 23 - Situations where mean PAOP may misrepresent LVEDP 52

Figure 24 – Baxter Corporation Recent Financial Performance By Product Line 59

Figure 25 – Baxter Revenue Trends by Geography 59

Table 26 - Areas of Company Product Focus 62

Table 27 - Selected Product Lines Available From this Company 65

Figure 28 – Cardiomax II CO Computer 66

Figure 29 – Cardiotherm 500 CO Computer 67

Table 30 - Areas of Company Product Focus 72

Figure 31 – TEBCO OEM Board for BioImpedance Non-Invasive CO 74

Figure 32 – Kontron CCO, SvO2, Thermal CO Device 76

Table 33 - Selected Areas of Company Product Focus 77

Table 34 - Marquette Medical Recent Financial Results 77

TABLE 35- MARQUETTE History of Innovation 78

TABLE 36 - Modules Compatible with Unity 79

Table 37 - Areas of Company Product Focus 81

Table 38 - Areas of Company Product Focus 82