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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