Commercial research and development in times of financial restraint

More than most other areas of medical practice, radiology depends on technology for the practice of its specialty, the effectiveness of its specialists, and the contribution it can make to medical care. Consequently, manufacturers of diagnostic imaging equipment and supplies have special importance to radiologists, and there has long been a productive interrelationship between those vendors and radiologists, resulting in rapid growth in the sophistication and effectiveness of diagnostic imaging products. Presumably because the market for imaging equipment and supplies is narrowing, in the past three years there has been some redirection of research expenditures away from pure research into applied research and product development, although absolute levels of research funding have not decreased. Understanding the theory of the firm provides an insight into how vendors might respond to changes in the size of the equipment market or the certainty of the market in the future. Because the research and development activities of these vendors are important to radiology practice, radiologists need to understand corporate behavior, just as managers of companies providing imaging equipment and supplies need to understand the requirements and concerns of their market. Finally, individuals and agencies that determine the ultimate reimbursement for diagnostic medicine should be mindful of the effect their decisions have on costs and efficiencies in this area, particularly the risk that the long-range effect on the cost and quality of medical care is quite different from that intended.