Summary
GE sees a huge global market for advanced healthcare delivery systems as increasing demand for improved healthcare exceeds today's delivery systems. Asia will be on the leading edge of this trend since they have growing populations and inadequate delivery systems. GE wants to be ahead of competitors such Phillips Medical and Siemens, who are cautiously looking at this area. However, in a down economy, it is often the company that acts boldly that captures the market.
Analysis
Healthcare delivery continues to be a major issue in the global economy. Nowhere is this felt more strongly then is Asia where populations continue to rise and current medical delivery systems have been unable to keep pace. With pressure in more stable markets like North America and Europe to reduce healthcare costs, companies such as GE, Siemens, Phillips Medical and others are looking at third world countries, especially in Asia for growth.
Remote healthcare delivery systems are believed to be one of the answers to this problem. With the number of healthcare practitioners at all levels not expected to catch up or keep up, a new approach is needed. Activity in this area has been increasing. However, the recent world economic downturn is likely to delay early deployments. The Continua Alliance has been working on standards in this area for many years and the its members is a list of the major players in this area.
GE understands that Asia will be the leading market. Some European governments have been doing pilots in this area. North America, with its well developed healthcare infrastructure has been lagging. Asian countries, with stronger economies such as China, Singapore and India, are looking seriously at new technologies to improve healthcare and remote healthcare delivery systems, is at the top of the list. Why? Because when a patient comes to a medical facility, it is one healthcare worker with one patient. Using remote healthcare monitoring and delivery, one healthcare worker using advanced technologies can monitor several patients. GE’s recent investment of $250 million with Intel to create platforms for these systems was an initial step in this direction.
Monitoring of remote patients is the first step in this new delivery trend. The improvements in telecommunications infrastructure, particularly wireless technologies are making remote monitoring possible and economical to wider geographic areas. Companies such as GE see a model where they can sell systems to governments that provide the patient monitoring devices, data transport over wired and wireless infrastructure and the monitoring and analytical systems on the backend. The potential for revenues on a per patient basis in countries such as India and Chine are enormous. Monitoring is the first step. As technologies and methods advance, remote delivery of healthcare will be a growth business in the medical industry. Remote diabetes management is may be the first disease to be managed in this way.
GE understands that first mover advantage is critical in these markets. Any company that can get in and establish its systems and products as defacto standards will be difficult to unseat. While this market, slowed down, by the global economic downturn, will probably not start to grow rapidly until 2011 or later, GE wants to be ready and be first and their investment of $6 billion and their alliance with Intel part of their plan to capture this market.
This author consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
