GE Healthcare creates an emerging markets unit with $300M commitment
|Lullaby Warmer--Courtesy of GE Healthcare|
GE Healthcare ($GE) has staked a major claim in a field that's not well tended--the development of affordable medical technologies to improve health outcomes in the emerging markets. It's creating a devoted business called Sustainable Healthcare Solutions out of a combination of its operations in India, South Asia, Africa and Southeast Asia dedicated to serving 70 markets--and investing $300 million to back the effort.
Industrial conglomerate GE has been looking for a way to boost its healthcare business. Last year, it brought in former business development head John Flannery to lead the group. Earlier this month, he offered an overview of the changes needed at GE Healthcare to generate sales growth and expand profit margins in this $18 billion group that's been treading water for years. GE Healthcare accounts for roughly 16% of parent company revenues.
In a speech last week, Flannery emphasized the role of the emerging markets in boosting GE Healthcare. He noted that it's invested heavily in India and China and that he expects growth on the order of 20%+ in this segment, driven largely by first-time GE customers who need complete solutions.
Now GE Healthcare is putting its money where its mouth is and aiming to work with governments, healthcare providers, payers and non-governmental organizations via this new Sustainable Healthcare Solutions (SHS) business. The intention is to increase access to the roughly 5.8 billion people who don't get basic healthcare. It's also explicitly in support of the new 2030 Sustainable Development Goals being ratified at the UN General Assembly 2015 this week in New York.
"Much of the world's population is without adequate healthcare, and innovations that can create better patient outcomes in a sustainable way are urgently needed," said Flannery in a statement. "Many emerging economies are looking for experienced partners to help build skills, capacity and effective healthcare solutions for their patients."
|Vscan Access--Courtesy of GE Healthcare|
The company pointed to examples such as the handheld ultrasound device Vscan Access+ and Lullaby+ infant warmer as examples of products that it's already developed to address emerging markets. It noted that maternal and infant care is a particular focus and estimated the "low-cost healthcare equipment sector" as worth $8 billion annually, a figure that's only growing as developing countries increasingly invest in healthcare.
"SHS will leverage GE's Fastworks methodology to accelerate, test and rapidly commercialize relevant, affordable technologies. By taking this 'start-up' model approach we can rapidly test new ideas, products and services to maximize effectiveness for customers before we scale up," said Terri Bresenham, President and CEO of GE Healthcare's SHS unit. "From basic primary care delivery through to more complex, structural healthcare challenges, SHS will aim to combine GE Healthcare's capabilities and scale with the local know-how and expertise of our partners across Africa, Southeast Asia, India and South Asia."
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