A year ago, General Electric declared it would spin off three of its divisions into public companies — one of them dedicated to healthcare. A year later, GE Healthcare is preparing for the spin, which is planned for the first week of January.
Heading into the spin, GE Healthcare reported steady finances in Q3. Its revenue during the quarter was $4.61 billion, which marks a 6% increase from last year, and profit was $712 million, up 1% from last year. Orders for imaging and ultrasound equipment are the primary drivers of GE Healthcare’s recent revenue growth, GE said in its earnings report.
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Health systems have spent billions on portals while investments in modernizing the voice channel — the dominant preference of healthcare consumers — have taken a backseat.
The company’s split will allow it to operate under a new board, as well as manage its own capital, according to Catherine Estrampes, GE Healthcare’s president and CEO for the U.S. and Canada. That capital will be primarily invested in acquisitions and research and development efforts, she said during a recent interview.
The independent company’s 10-person board features four healthcare veterans. Among these are the CEOs of two of the nation’s biggest health systems, Cleveland Clinic CEO Tomislav Mihaljevic and Providence CEO Rod Hochman. Risa Lavizzo-Mourey, former CEO of the Robert Wood Johnson Foundation, is on the board as well, along with Phoebe Yang, who recently left her role as general manager of Amazon Web Services’ healthcare division. Before that, she worked as chief strategy officer for population health at Ascension.
This new board will allow GE Healthcare to make smarter, more focused decisions about which research efforts to pursue and which acquisitions to make, according to Estrampes. Post-spin, she said GE Healthcare will allocate a good deal of its capital toward acquiring companies that can enhance its core business lines, which include imaging, precision medicine and AI analytics.
The acquisitions of Prismatic Sensors and BK Medical — which GE Healthcare bought in 2020 and 2021, respectively — are the kind of deals that the company will make more of once it spins out, according to Estrampes. The acquisition of Prismatic Sensors, a Swedish company focused on photon counting, was a move GE Healthcare made to enhance its CT technology for better diagnostic accuracy. The company purchased BK Medical so it could add real-time surgical visualization to its ultrasound business, taking it beyond diagnostics and into surgical intervention.
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Still, there are plenty of healthcare companies out there that make strategic acquisitions, and even more that promise to increase efficiency and reduce clinical burnout through technology and insights. Estrampes contends that GE Healthcare can differentiate itself from the crowd and stand out as a company that providers want to partner with and/or choose as a vendor.
“We have many years of experience helping our customers manage data, whether it is clinical or operational data,” she said.
To Estrampes, GE Healthcare is unique because it takes that data management expertise and shares it with startups to create innovative software. She pointed to GE Healthcare’s Edison developer program as a key way the company does this. The program gives startups tools and services to develop and speed the commercialization of clinical and operational AI software. Through the program, startups can access AI building tools to help them develop apps for providers on a faster timeline.
After its spinout, GE Healthcare will bring on more startups onto the non-proprietary platform. The Edison program is a key differentiator for the company’s AI strategy, according to Estrampes. In fact, the program has recently helped several software products make it onto the FDA’s list of AI-enabled medical devices. Examples include Revolution Ascend, a system designed to quicken the CT process, and Voluson 22, an ultrasound system.
Estrampes also argued that GE Healthcare is different from its competitors — such as Philips and Siemens — because it puts a greater emphasis on ensuring that software applications can be easily integrated into the providers’ workflows.
“I think that will differentiate things in the future, because if you think about it, the easy integration of new applications into the workflow is critical, given that there is a personnel shortage and personnel burnout,” she said. “So the more we integrate things, the better it’s going to be.”
Photo: Dina Mariani, MedCity News