GE Healthcare said today it will spend $300 million to develop lower-cost technologies and healthcare delivery solutions across multiple care settings in emerging markets through a new business unit.
The new unit, Sustainable Healthcare Solutions (SHS), will work with governments, clinicians, private operators, and non-governmental organizations (NGOs) to improve access to quality and affordable health worldwide in a multi-phase effort, GE Healthcare said. SHS will combine GE Healthcare’s operations in India, South Asia, Africa, and Southeast Asia.
“Innovations that can create better patient outcomes in a sustainable way are urgently needed,” GE Healthcare President and CEO John Flannery said in a statement. “Many emerging economies are looking for experienced partners to help build skills, capacity and effective healthcare solutions for their patients.”
During a September 16 presentation to investors at the Morgan Stanley Laguna Conference, Flannery articulated the development of “Ecosystem solutions for emerging markets” as one of four “business priorities” for GE Healthcare, looking beyond products toward packaging and training. Flannery identified $1.2 trillion in unmet healthcare spending opportunity in emerging markets, in addition to $5.8 trillion in developed markets.
“There’s very strong growth around the world in healthcare. A lot of this is in emerging markets,” Flannery told investors. “There are huge megatrends at play here: There’s almost 6 billion people who still have limited access to healthcare, and big infrastructure build-out, so we have a double digit growth opportunity in the space.”
In emerging markets, he continued, “We’ve also learned that the product is not enough, there’s a lot of need in these countries for a turnkey package: financing, training, equipment, service, IT packages. We just won a $200M, seven-year order in Kenya. We think this is a business we can grow 20%-plus going forward.”
SHS will serve Bangladesh, Bhutan, Brunei, Cambodia, India, Indonesia, Laos, Malaysia, Maldives, Myanmar, Nepal, Philippines, Singapore, Sri Lanka, Thailand, and Vietnam—as well as all 54 African countries.
GE Healthcare foresees growth in the low-cost healthcare equipment sector, which it estimates is valued at more than $8 billion and growing significantly as developing countries seek effective, long-term healthcare solutions.
SHS will promote GE Healthcare products that include its hand-held ultrasound device Vscan Access and Lullaby infant warmer, both designed to improve healthcare outcomes in remote rural settings in maternal infant care.
“SHS will leverage GE’s FastWorks methodology to accelerate, test and rapidly commercialize relevant, affordable technologies,” added SHS President and CEO Terri Bresenham.
“FastWorks” is GE Healthcare parent GE’s framework for improving outcomes for customers and creating more value for the company by operating more quickly and at lower cost.
Based on the “Lean Startup” principles of entrepreneur-author Eric Ries, FastWorks’ five-step framework includes defining a customer problem and long-term vision, identifying assumptions needed to achieve that vision, building tests to validate assumptions, tracking progress via metrics, and adjusting strategy or “pivot” based on what has been learned.
“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,” Bresenham said. “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.”