Table of Contents

Overview of Report Content & Structure

 1

US Monitoring Markets Included

 1

External Market Influences

 1

Economic Factors

 3

Vendor Names

 3

Y2K Impact

 3

Competitive Climate

 4

Data Sources

 5

Missing Data Elements – Corporate Profiles

 5

Accuracy of Projections

 5

Data Trends

 5

Saturated Markets – Units Replaced

 6

Adjustments for “Free” Monitors

 6

Growth Markets

 7

Mixed Markets

 8

Declining Number of US Hospitals

 8

Adjustment for OEM Devices

 9

Average Selling Price (ASP) Trends

 9

Compound Annual Growth Rate (CAGR)

 10

Age of Installed Base

 10

Report Part 2 – Corporate Profile Section

 12

Executive Summary

 13

Understanding Patient Monitoring Segments

 13

Size of the US Market

 13

Vendor US Market Shares

 14

Metamorphosis of the US Monitoring Market

 15

Period of Accelerated Replacement Ending?

 16

Types of Clinical Orders Negotiated

 16

External Market Influences

 19

Economic Issues

 19

The Balanced Budget Act of 1997

 19

ACC Launches New Initiative

 20

National Healthcare Expenditures

 20

Market Driven By Life Cycle Cost Effectiveness

 22

Medical Electronics Industry Re-engineering

 26

Medicare and Managed Care

 27

Managed Care Influences

 29

Provider Revenue Trends

 30

Medical Rate of Inflation

 33

Inflation Assumptions During Forecast Period

 33

Competition for Patients

 34

Medical Employment/Provider Trends

 34

Medical Labor Pool

 35

Population Aging

 38

Population Growth by State

 39

HealthCare Monitoring ‘customers’

 43

Who Are The Big Customers?

 43

Competitive Climate Factors

 45

Overview of Selected Participants

 45

Core Technologies

 52

Approximate Vendor Positions World Wide

 53

Changes in Industry Product Positioning

 53

“Flexible Monitoring”

 54

Ease-of-Use

 54

Breadth of Products Offered

 54

Connectivity

 56

Support of Decentralized Nursing

 56

Marketing Alliances

 57

Marketing Strategies

 58

Industry Consolidation Intensifies

 60

Contracts with Provider Groups

 61

Patent Issues

 62

FDA Regulatory Issues

 62

Technological Issues

 63

Microprocessor Developments

 63

Medical Devices Begin to Embrace Consumer Operating Systems

 63

What Commercial OS is Most Reliable/Popular?

 64

UNIX – Took A Hit, But Is Coming Back Strong

 64

Windows NT – a Large – Popular – Problem Prone OS

 65

MAC OS – A Distant Third and Fading

 65

OS Market Developments

 66

Networking

 68

Thin Client Server Technology

 68

I Dream of Jini – The “Magic”, Simple Networks for the Home/Office

 68

World Wide Webbing

 70

Web-Enabled Patient Monitoring Companies

 70

Web Limitations as Medical Information  Exchange Media

 71

Smart Cards – Has Their Time Come?

 73

Voice Recognition (VR) Technologies

 74

The Goal – Speaker Independent, Continuous Speech, Large Vocabulary Systems

 74

VR - “Some Assembly Required”

 75

Role of Medical “Context Models” in VR

 76

Some Current Issues with Medical VR

 77

Mobile VR Applications

 77

VR-Enabled OS Control Applications

 78

Handwriting Character Recognition Technologies

 78

3Com’s Palm Pilot – A Giant Step Backwards

 78

Digital Paper & Electronic Ink For Patient Charts

 80

Mobile and Body-Worn Computers

 80

Changes in Core Medical Technologies

 83

ECG - Cardiology Core Competencies

 83

ECG Gating and MRI Scanners

 83

Heart Rate Variability

 84

Medical Paging, PIMs and Communications

 84

SpO2 – Pulse Oximetry Core Competencies

 85

Cerebral Oximetry Moves Into The Frequency Domain

 89

Non-Invasive Blood Pressure Technology

 90

EEG/BIS Monitoring

 91

Invasive Pressures and Cardiac Outputs

 92

Pulmonary Artery Monitoring

 92

Pulse Contour Hemodynamics – Less Invasive

 94

Non/Less-Invasive, Continuous Cardiac Monitoring

 96

Esophageal Doppler Monitor (EDM) – Non Invasive

 96

EDM Application Areas

 97

Thermal Dilution Power Consumption Approaches

 99

Pulmonary Artery Catheters

 99

Abbott Introduces SvO2 – Displaces Baxter

 99

Baxter Develops Continuous Cardiac Output (CCO)

 99

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

 100

Approximate Invasive Catheter Market Shares

 100

Non-Invasive CO – On the Horizon

 100

Fick CO Approaches

 101

Cardiac Vests

 101

Thoracic BioImpedance CO Devices

 101

Pulse Contour Cardiac Output

 102

Clinical relevance of extravascular lung water (EVLW)

 105

Accuracy Of Lung Water From The Chest X-Ray

 107

Thermal Dilution Cardiac Output (tdCO)

 108

“Continuous” Cardiac Output Introduction

 109

Other Invasive Blood Pressure Monitoring

 109

Tonometry

 112

Consolidated Inpatient Acute Care Parameter Summary

 112

Market Forecasts for Clinical Areas

 115

Intensive Care Units

 115

Implications on Monitors of Architectural Design Advanced

 115

Central Stations Become Distributed Alcove Observation Pods

 116

Units Designed to Support Increased Family Presence and Care

 116

Source of ICU Patients

 117

Changes In Acute Care Unit Length of Stay

 120

Hospitals Deny Care to Americans but Court Rich Foreigners

 121

Cost of  Complications in ICUs

 121

Composition of Adult and Pediatric ICUs in the US

 123

Surgical Intensive Care Units (SICUs)

 124

Neurosurgical ICUs

 125

Medical Intensive Care Units (MICUs)

 126

Vendor Consolidated Market Positions in US Hospital ICUs

 126

Coronary Care Units

 127

Respiratory Care Units

 129

Neonatal and Pediatric ICUs

 131

COMBINATION ICUs

 134

What’s Ahead – Evolving To The Hospital of 2010

 136

Sizes of ICUs

 137

ICU Market Forecasts and Summaries

 141

US Hospital Perioperative Monitoring Markets

 143

Vendor Rank in Cumulative Installed OR Units

 144

Trends in Number of Hospital ORs

 144

What Surgical Procedures Are Being Performed In Hospitals?

 147

Shift to Day Surgery

 151

Post Anesthesia Recovery Units (PACUs)

 151

Shortening of the Replacement Cycle in OR

 152

Growth Due to BIS Monitoring Technology Uptake

 152

Market Forecast for Perioperative Units

 154

The Telemetry/Step-Down Market Segment

 157

Size of Telemetry Systems

 157

Historic Telemetry Market Evolution

 158

Which Frequency Band - VHF or UHF?

 158

Current VHF Operation and Challenges

 159

Current UHF Operation and Challenges

 160

Expanded Use of Telemetry Systems

 162

FCC Rule Changes & Proposed Changes

 163

Medical Telemetry Market Growth

 165

Market Leaders & Comments

 165

HP/Agilent Technologies

 165

Protocol Systems

 165

Vitalcom

 165

Criticare Systems

 165

Spacelabs

 166

Siemens

 166

Marquette/GE

 166

Others

 166

Importance of Patient Locator Systems

 166

Components of Hospital Telemetry Market

 167

Patient-worn Transmitter Segment

 168

Patient Worn Market Saturation – Cumulative Units Sold

 177

Wireless (LAN), Portable Monitors

 178

Integrated Telemetry Central Station Capabilities

 189

Telemetry Segment Market Forecasts

 196

Patient-Worn Systems for Cardiac Patients

 200

Consolidated Patient-Worn Telemetry Market Forecast

 201

The Emergency Department Segment

 205

EDs – First Point of Contact

 205

ED Unit Size Distribution (Monitored Beds)

 207

ED Vendor Rankings

 208

Treating Non-Emergency Patients in EDs

 210

Emergency Department Expenses

 210

What Conditions Are Seen in ED?

 211

Baseline Segment Size

 212

New ED Market Technology Drivers

 213

Emergency Department Component Markets

 214

Handling ED Cardiac Patients

 217

The Emergence of ED - Chest Pain Clinics

 219

Emergency Department Forecast

 221

List of Figures

Table 1 - Scope of Markets Segments Covered in this Report

 1

Table 2 - External Factors Influencing the US Patient Monitoring Markets

 2

Table 3 – Internal Factors Driving the US Patient Monitoring Market

 2

Table 4 – Other Factors Affecting US Monitoring Markets

 4

Table 5 – Penetration of US ORs by Aspect Medical from 1997 until Q1 1999

 7

Table 6 - Assumed Penetration of Masimo SET Technology

 8

NEW Table 7 – Trend in US Hospital Closings – 1985 Thru 1997

 8

NEW Table 8 – Projected Number of US Hospitals During Forecast Period

 8

© Figure 9 – Aging of Installed US Monitoring Base

 11

Table 10 – Overall US Hospital Patient Monitoring Market Forecast

 13

Figure 11 – Approximate US Patient Monitoring Vendor Market Shares

 14

Table 12 - Overview of US Healthcare Providers Who Utilize Patient Monitors

 15

Figure 13 – Approx Distribution by Clinical Unit of US Monitoring Orders Placed in 1998

 16

Figure 14 – Share of Cumulative Installed Base of Monitors in US Hospitals as of 1998

 17

Table 15 – Estimates of GDP (US$ Billions) & Population During Forecast Period

 20

Table 16 - Population, GDP & HC Expenditure Trends for Decade of 1990’s

 21

Figure 17 - Trends in Physician & Other Healthcare Expenditures

 21

Figure 18 - Trends of Individual Components Normalized by Year

 22

Figure 19 - Billed Charges for Medical Conditions in the US in 1987

 24

Figure 20 - © Trends in Cost of Inpatient Care From 1980 Through 1994 ($'s)

 25

Figure 21 - Indicators of Growth in Medical Industry 1991 Through 1994

 26

Table 22 - Selected Medicare In-Patient Principle Diagnosis in 1997

 27

Table 23 - Distribution of 1997 Medicare Funds in SS Hospitals by Service

 28

Table 24 - Projected Number of Beds Per 250,000 Population Under Managed Care Scenario

 29

Table 25 - Actions Taken By Hospitals to Re-engineer

 29

Table 26 - Growth of Medicare HMOs by State

 30

Table 27 – Cumulative Reductions in Federal Reimbursement to Hospitals Under BBA

 31

Figure 28 - 5 Yearly Trend in Annual Receipts/Revenue for the Health Service Industries ($ Mio

 32

Figure 29  Historical Consumer Versus Medical Price Index

 33

Figure 30  - 15 Year Employment Projections by DOL

 35

Figure 31 - Selected Non-Federal Healthcare Workers Trends by State, 1988 To 1994

 35

Figure 32 - Projected Growth in Non-Federal Healthcare Employment 1994 Through 2005

 37

Figure 33 - No of Physicians, by Selected Activity - 1970 Through 1994

 37

Figure 34 - Population Growth in the US 1990 vs 2010

 38

Table 35 - Nursing Home Population by Age Group

 39

Figure 36 - Age Distribution for Elderly from 1970 Through 2000

 39

Figure 37 - Population Growth Projections by State & Geographic Area

 40

Table 38 – Selected Not-for-Profit Hospital Buying Groups

 43

Table 39 – Selected For-Profits Group Purchasing Organizations

 44

Table 40 – Selected Government-Controlled Healthcare Provider Groups

 44

Table 41 – Core Competencies of Major US Monitoring Companies

 52

NEW Table 42 – Recent Trends and Market Share Positions of Selected Monitoring Suppliers

 53

Table 43 – Product Concepts of Major US Monitoring Companies

 55

Table 44 – Evolution of Vendor Product Lines and Market Directions

 59

Table 45 – Selected Monitoring Companies Expanding Their Product Lines by Acquisition

 60

Table 46 – Breadth of POC CPR Offerings of Selected Companies

 61

NEW © Figure 47 – Worldwide OS Market Shares Comparison of NT and UNIX – Mid Year 1998

 66