GE commits US$6bn to healthcare innovation

11 May 2009

GE has announced a US$3 billion budget for the next six years for healthcare innovation aimed at delivering better care to more people at lower cost. In addition, the company will commit US$2 billion of financing and US$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 on the global commitments of reducing costs, improving quality and expanding access for millions of people.

GE says that under healthymagination, by 2015 it will:

  •  invest $3 billion in research and development to launch at least 100 innovations that lower cost, increase access and improve quality by 15%. GE will also apply its expertise in services and its suite of performance improvement tools for impact in these areas. These actions will strengthen GE Healthcare’s business model;
  •  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;
  •  increase the “value gap” between its health spend and GE Healthcare’s earnings to drive new value for GE shareholders.
  •  engage and report on its progress. GE will engage experts; and leaders on policy and programs and create a GE Health Advisory Board, which will include former US senators Bill Frist and Tom Daschle and other global healthcare leaders.

Healthymagination will draw on capabilities from across GE, including the UK-headquartered GE Healthcare, GE Capital, GE Water, NBC Universal, the GE Global Research Center as well as the GE Foundation, the philanthropic arm of GE.

“Healthcare is an important industry that is challenged by rising costs, inequality of access and persistent quality issues,” GE Chairman and CEO Jeff Immelt 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,” Immelt 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 health care. 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,” Immelt 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, labour and imagination on its success.”

GE Healthcare President and CEO John Dineen said, “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.”

Former US Senator Tom Daschle, who will serve on GE's healthymagination advisory board, said, “We can only find real solutions in healthcare 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.”

Investment in innovation

GE will more than double its research and development spending on healthymagination products, totalling $3 billion by 2015, meaning at least half of GE Healthcare’s spending will be on innovations that:

  •  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; and
  •  improve quality and efficiency by 15% for customers through simplifying and refining health care procedures and standards of care.

In addition to the US$3 billion spend by GE Healthcare, GE Capital will provide US$2 billion in financing for advancing healthcare IT and several GE businesses will spend US$1 billion over the next five years for partnerships, media content and services related to healthymagination.

Oxford Analytica, an independent, Oxford-based international 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.

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