HIT Executive Editor
Industrial giant GE (Fairfield, Connecticut) has unveiled plans to undertake a massive new initiative that will see the faltering company spend $3 billion over the next six years on healthcare innovation that it said will help deliver better care to more people at lower cost.
The company will commit $2 billion of financing and $1 billion in related GE technology and content to drive healthcare information technology and health in rural and underserved areas. These investments are the foundation of GE's "healthymagination" initiative, which is built, GE said, on the global commitments of reducing costs, improving quality and expanding access for millions of people.
"Healthcare is an important industry that is challenged by rising costs, inequality of access and persistent quality issues," GE Chairman/CEO Jeff Immelt, a former head of the GE Healthcare business, said. "Healthcare needs new solutions. We must innovate with smarter processes and technologies that help doctors and hospitals deliver better healthcare to more people at a lower cost."
"Healthymagination is our business strategy that seeks to help people live healthier lives, support customer success and help GE grow," he said. "We will invest in innovations that measurably improve cost, access and quality. That means lower-cost technology for more customers, products matched to specific local needs and process expertise to help customers win."
"This reflects the new opportunities we see in healthcare," Immelt said. "Our newest innovations – low-cost digital X-ray machines, portable ultrasounds, more affordable cardiac equipment – will save costs for doctors, hospitals, the government, families and businesses. This will help level the playing field in healthcare. With our technology, rural and urban areas and developing countries can have access to the best technology, affordably."
"We saw the same type of tipping point four years ago when we launched our successful environmental initiative, ecomagination," he said. "We learned that technical innovation can drive solutions and value for customers, investors, employees and the public. We will bring the same integrated approach to healthcare, focusing all of our expertise, labor and imagination on its success."
GE Healthcare President/CEO John Dineen added: "This is the right time to reposition our healthcare business, given the changes and challenges in the industry. Our customers are looking for productivity and solutions. We will focus on the products, the process excellence and the partnerships that broaden access to healthcare and reduce its cost."
Under the healthymagination initiative, GE intends by 2015 to:
– Invest $3 billion in research and development to launch at least 100 innovations that lower cost, increase access and improve quality by 15%. The company said it also will apply its "expertise in services and its suite of performance improvement tools for impact in these areas."
– Work with partners to focus innovations on four critical needs to start: accelerating healthcare information technology; target high-tech products to more affordable price points; broaden access to the underserved; and support consumer-driven health.
– Expand its employee health efforts by creating new wellness and healthy worksite programs while keeping cost increases below the rate of inflation.
– Drive new value for GE shareholders by increase the "value gap" between its health spending and earnings.
– Engage and report on its progress. GE said it will engage experts and leaders on policy and programs and create a GE Health Advisory Board, which will include former U.S. Sens. Tom Daschle and Bill Frist and other global healthcare leaders.
Daschle, who will serve on GE's healthymagination advisory board, said, "We can only find real solutions in health care when business, government and their partners work together. The commitments GE made today on access, cost, and quality are a great start toward demonstrating their leadership in this debate. I look forward to working with them."
Healthymagination will draw on capabilities from across GE, including GE Healthcare, GE Capital, GE Water, NBC Universal and the GE Global Research Center as well as the GE Foundation, the philanthropic arm of GE.
The initiative might well be called the "15 Mantra." In addition to committing to more than dubling its R&D spending on healthymagination products, totaling $3 billion by 2015, a 15% target is mentioned frequently:
– Reduce by 15% the cost of procedures and processes with GE technologies and services.
– Increase by 15% people's access to services and technologies essential for health, reaching 100 million more people every year.
– Improve quality and efficiency by 15% for customers through simplifying and refining health care procedures and standards of care.
In addition to the $3 billion spend by GE Healthcare, GE Capital will provide $2 billion in financing for advancing healthcare IT and several GE businesses will spend $1 billion over the next five years for partnerships, media content and services related to healthymagination.
Oxford Analytica (Oxford, UK), an independent research and consultancy firm, is reviewing GE commitments in products and services innovations to determine if they meet healthymagination standards. To date, Oxford Analytica has qualified seven GE products that yield 15% improvement in cost, access and quality, with 20 more in the pipeline. GE's goal is to qualify 100 healthymagination innovations by 2015.
GE said it will work with partners to address four critical healthcare needs to start:
1) Target technology toward lower-cost outcomes – to reduce the impact of technology on costs, GE is broadening the way it develops new products.
The company will launch 50 low-cost products that offer powerful technology capabilities with simple operation and application targeted to achieve 15% lower cost, on average. These "only what is needed" products will be tailored to areas where access to healthcare technology is limited.
GE's Performance Solutions service business has set a target of $1 billion in reduced cost for customers over the next five years to help hospitals become more efficient through process redesign.
2) Make health IT faster and more productive. GE will seek to increase the use and capability of electronic medical record (EMR) technology and other information technology that speed communications, limit variation and control costs.
Two new initiatives include:
• GE, Intermountain Healthcare (Denver) and the Mayo Clinic (Rochester, Minnesota) have developed physician decision support through IT in the form of evidence-based care and today said they will launch it commercially in 2010. This system provides access to the highest standards of care, anywhere.
• GE Capital will provide $2 billion in financing to help health providers in rural and underserved areas get access to more innovation that improves health and reduces the cost of care. GE will focus financing to assist in the adoption of EMRs and health information exchanges (HIEs).
The company said about half of those practicing medicine in the U.S. do not have access to these technologies. GE's financing will help healthcare systems adopt EMR and HIE before 2011 in time to qualify for federal financial incentives. By accelerating EMR and HIE adoption, GE expects to help remove $28 billion in cost from the health system while improving access to better and more affordable care.