Merge Healthcare Announces a New Teleradiology Product and Service Offering

Merge responds to customer requests for ways to enhance quality and boost radiology group productivity


MILWAUKEE, Nov. 20 /PRNewswire-FirstCall/ — Merge Technologies Incorporated, d.b.a. Merge Healthcare, (NASDAQ:MRGE) (TSX: MRG.), a leading medical imaging software and services provider, today announced the introduction of a new teleradiology software application, Merge TeleRead(TM), and an innovative service offering, Consult PreReads(TM). A Consult PreRead is a consulting service that provides a preliminary report of a medical imaging study (prepared and revised by two different offshore radiologists) producing a detailed report that a U.S. radiologist may consult and utilize to prepare his or her official final diagnostic report. The report includes references to prior studies, relevant patient clinical information or data requested in the radiology order, and extensive measurements of relevant and incidental pathology and associated key images. The Company plans to begin offering the Merge TeleRead application and Consult PreRead service to its customers in the first quarter of 2008.


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The Consult PreRead is designed to provide another level of quality control and assuredness for the official final diagnostic report (which Merge’s radiology group customers’ licensed U.S. radiologists are responsible for preparing) while enhancing the productivity of the U.S. reading radiologist. In essence, upon completion of the official read by the U.S. radiologist, the medical imaging study has been triple-read before it goes back to the referring physician from the U.S. radiologist.


“In addition to this innovative new service, we believe that most teleradiology service companies do not have the technology to easily provide patient history and the relevant prior studies required to support the teleradiology final read business,” said Kenneth D. Rardin, President and CEO. “The teleradiology services industry has been struggling with the technology to support the complex final read business. Merge TeleRead, our new proprietary teleradiology solution is scheduled to be released for production in Q1 ’08, supports this complex environment by providing access to current studies, prior studies, prior reports and relevant current and historical patient information,” said Rardin. “I believe that Merge TeleRead provides the ‘secret sauce’ to allow Merge and our customers to successfully enter this multi-billion dollar industry.”


“I have been in radiology for over twenty years, and I believe that this is an industry-changing capability,” said Steven Mendelsohn, MD, a U.S. based radiologist who has been a clinical advisor in the Merge Teleradiology clinical beta tests. “I am impressed with the workflow and technology, and the medical acumen, technical accuracy and communication skills of the offshore radiologists. I am confident that this is the impetus for a new way of doing business and improving clinical efficacy in radiology.”


Merge will demonstrate its Consult PreRead service and its Merge TeleRead software at the Radiological Society of North America (RSNA) Annual Conference, November 25-30, 2007, in Chicago, Illinois. Merge will initially offer its teleradiology services to existing Merge Healthcare Fusion RIS(TM) and Fusion RIS/PACS(TM) customers, but intends to offer these services to users of non-Merge RIS and RIS/PACS customers in the near future. RIS refers to Radiology Information Systems and PACS refers to Picture Archiving and Communication Systems.


“Our ongoing evaluation of the medical image reading market and the teleradiology services that have been established to help augment U.S. radiological services indicates that there is a strong need and demand for innovative solutions to improve quality of patient care and help to increase radiology productivity. This is based on a decreasing supply of radiologists relative to demand, the increasing need for healthcare services in an aging population and the incredible growth of medical imaging technology and associated imaging services,” said Rardin. “Merge’s ability to combine our unique and innovative RIS/PACS technology with our new Merge TeleRead module and our quality control and customer operations centers located in Atlanta, Georgia and Pune, India, along with experienced offshore radiologists and transcriptionists, will give us a unique capability to provide our customers a complete solution offering, designed to help our customers improve both quality of patient care and the productivity of radiology operations.”


“Apart from demographic shifts and technological evolution, Consult PreReads are beneficial for purely practical reasons,” added Gary Bowers, President, Merge Healthcare North America. “There are many times when imaging centers are faced with study backlogs or they need to balance the workload when radiologists are on vacation,” he said. “Furthermore, radiology practices are seeing increasingly high volumes of complex studies, such as cancer cases and those requiring extensive measurements; studies that can be very time consuming. By accessing Consult PreReads, our customers should be able to improve quality and accelerate the turnaround time of the final reports performed by the U.S.-based radiologists and delivered to referring physicians. Also, because the Consult PreRead transcribed report is provided to the U.S. based radiologist, overall transcription costs should be reduced.”


Bowers also stated, “In situations where our customers are expanding into the teleradiology service business, Merge’s innovative TeleRead technology will allow our customers to leverage automation to streamline the distribution of images and relevant clinical data to provide a comprehensive interpretation of the current study while reducing the labor and minimizing the error prone process of traditional teleradiology services. Therefore, radiology practices can focus on delivering teleradiology services and not on the distractions associated with the administration and labor of the teleradiology service.”


The integration of expertise and technology


Merge Healthcare is well positioned to diversify its portfolio into the teleradiology Consult PreRead service by virtue of its extensive experience in the development of RIS, PACS and integrated workflow solutions. The Consult PreRead service itself is tightly integrated with Merge’s Fusion RIS and RIS/PACS technologies, which are built around a multi-site distributed workflow model that is designed to enable Merge to provide a seamless workflow for Fusion RIS and Fusion RIS/PACS customers. In contrast, typical teleradiology workflow usually requires many manual steps and significant data entry that can slow workflow and increase the likelihood of human error.


Integration of the Consult PreRead service with our new Merge TeleRead solution and our Fusion RIS and RIS/PACS products will create a seamless link through which Merge’s offshore radiologist consultants become a valuable resource within the U.S. customers’ workflow. All that should be required for a current Fusion RIS/PACS customer to benefit from Merge’s teleradiology service is a remote installation of the new Merge TeleRead module to connect their system to the Consult PreRead service.


Outgoing studies


Studies that radiology groups want to send out for Consult PreReads are simply placed in a special teleradiology worklist that is located within a customer’s Fusion RIS worklists. These studies can be routed automatically through workflow routing rules, or else radiologists or technologists can merely click on the cases they want to send out for review. The Merge TeleRead module seamlessly manages the transmission of these images and information to the U.S.-based Merge RIS/PACS Teleradiology data center for distribution to our remote reading centers. For example, when a radiologist signs off for the day, he or she can forward all received studies to Merge TeleRead until they next log on to the RIS. Or they can auto-route all studies over a specified period of time (for example, from 6 p.m. to 7 a.m.) to Merge TeleRead. These studies can go through an overnight Consult PreRead and be ready and waiting for the radiologist in the morning.


The Consult PreRead process


The Consult PreRead is an intensive activity, involving prescreening, reviewing historical patient information, reviewing prior studies, selection of key images, measurements, annotations, and generation of a detailed report. “Our Merge reading staff in Pune, India, includes highly qualified and experienced radiologist consultants,” said Mukul Mutatkar, M.D., Merge’s India-based Medical Director and Chief Consultant Radiologist. “Each diagnostic study is reviewed independently by two radiologists before transmission of the in-depth reading and marked key images that comprise the Consult PreRead report.”


“The process involves the review of relevant prior studies and patient information,” Dr. Mutatkar continued, “while the report is designed to include comprehensive analysis and measurements of all clinical findings, whether these findings are relevant or are purely incidental to the requested review.”


Official final read


The finished Consult PreRead report and key images appear in the designated U.S.-based radiologist’s worklist queue within minutes of the completion of the Consult PreRead in India. The U.S. licensed radiologist at the customer site then performs a complete official final read and issues a signed report to the referring physician.


Quality assurance


Merge’s teleradiology service has incorporated Teleradiology Practice Analysis(TM) functionality in the Fusion RIS. This unique capability allows Merge to perform real-time tracking of customer studies in the Merge system, to analyze radiologist deliverables, and to track and measure quality of performance indicators. Merge’s Medical Quality Improvement Board, which is chaired by a board certified and U.S. licensed radiologist, will use this information in monitoring the quality of the Company’s services.


Conference Call


On Wednesday, November 21, 2007, Merge Healthcare will hold a special Investor Conference Call beginning at 8:00 AM Central / 9:00 AM Eastern. Details to access the call via phone or web cast are listed below.


Management will be presenting a PowerPoint presentation during this call. To view the presentation, log onto the web site using the link and information listed below. Please allow for additional time to log in and access the web portion of this event.

  Call Details

Title: Merge Healthcare — Special Conference Call Date and time:
Nov-21-2007 / 09:00 AM Eastern Time

Show number: 339341
Participant Password: Merge2007

US/Canada Participant Dial In: 800.639.2197
International Participant Dial In: 706.634.2159
Conference code: 25375302
Audio connection options:

1. To listen via the Internet, select the streaming audio option when you
join the show. Please note that your computer must be equipped with
speakers and the appropriate software to use this option.

2. To listen via the phone, call the audio conference Dial-In Number
listed above.

Show Registration/Joining a Show


It is recommended that you register for this show in advance to ensure that you will be able to connect quickly and successfully at show time. While you can register up until 15 minutes prior to the show’s scheduled start time, registering now will save you time and facilitate quick entry at the start of the show.


Click on the link below to register and/or join the show at the designated show time: http://invite.mshow.com/findshow.aspx?usertype=0&cobrand=100&shownumber=339341


For additional details please call 414.977.4000 or visit our website at: http://www.merge.com/CORP/investorrelations/confcalllist.asp


Merge Healthcare is a leading medical imaging software and services company. Our innovative software solutions use leading-edge imaging software technologies that accelerate market delivery for our OEM customers, while our end-user solutions improve our customers’ productivity and enhance the quality of patient care they provide. For additional information, visit our website at http://www.mergehealthcare.com/.


All trademarks appearing in this release are the property of Merge Healthcare.


Cautionary Note Regarding Forward-Looking Statements


This announcement includes forward-looking statements within the meaning and subject to the protections of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. When used in this announcement, the words “will,” “believes,” “intends,” “anticipates,” “expects” and similar expressions of the future are intended to assist you in identifying such forward-looking statements. Such forward-looking statements may include, among others, statements regarding plans for the Company’s Merge TeleRead product and Consult PreRead service offering. Although the Company presently believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, the Company does not give, and cannot give, any assurance that those expectations will be achieved.


Any number of factors could cause the actual results to differ from the results contemplated by such forward-looking statements, including, but not limited to: market acceptance and performance of the Company’s new products and services, including the Company’s teleradiology product and services; delay in the offering of the Company’s teleradiology product and services; the Company’s ability to attract and retain qualified radiologist consultants; risks and effects of the past and current restatement of financial statements of the Company and other actions that may be taken or required as a result of such restatement; the longer than expected delay in the completion of the restatement process; the Company’s ability to generate sufficient cash from operations to meet future operating, financing and capital requirements; the Company’s inability to timely file reports with the Securities and Exchange Commission; risks associated with the Company’s inability to meet the requirements of The NASDAQ Stock Market for continued listing, including possible delisting; costs, risks and effects of legal proceedings and investigations, including the formal investigation being conducted by the Securities and Exchange Commission and class action, derivative, and other lawsuits; the uncertainty created by and the adverse impact on relationships with customers, potential customers, suppliers and investors potentially resulting from, and other risks associated with, the changes in the Company’s senior management; the impact of competitive products and pricing; continued negative effects of the DRA (Deficit Reduction Act of 2005); risks related to regulatory and other legal compliance with applicable health care laws, regulations, government agency pronouncements and judicial and quasi-judicial rulings; limited acceptance of digital modalities and RIS-PACS and workflow technologies; the Company’s ability to integrate acquisitions; changing economic conditions; credit and payment risks associated with end-user sales; the Company’s dependence on major customers; the Company’s dependence on key personnel; and other risk factors detailed in the Company’s filings with the Securities and Exchange Commission.

  IR Contact:
Melanie Gretzon
Director, Corporate Services
414.977.4000
[email protected]

Media Contact:
Beth Frost-Johnson
Senior Vice President, Marketing
Merge Healthcare
414.977.4254
[email protected]


First Call Analyst:
FCMN Contact: [email protected]

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Source: Merge Healthcare