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    Top30

    3. GE Healthcare

    ...

    3. GE Healthcare
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    07.19.16
    $17.6 Billion ($117.4B total)

    KEY EXECUTIVES:
    Jeffrey R. Immelt, Chairman and CEO, General Electric
    Jeff Bornstein, Sr. VP and Chief Financial Officer
    John Flannery, President and CEO, GE Healthcare
    Monish Patolawala, VP and Chief Financial Officer, GE Healthcare
    Lee Cooper, President and CEO, U.S. and Canada
    Rachel Duan, President and CEO, GE Healthcare China
    Sean Burke, President and CEO, GE Healthcare Asia Pacific
    Milan Rao, President and CEO, South Asia
    Chuck Nugent, VP, Global Supply Chain
    Jean-Michel Malbrancq, President and CEO, GE Healthcare Europe
    Maher Abouzeid, President and CEO, GE Healthcare Eastern Growth Markets
    Daurio Speranzini Jr., President and CEO, GE Healthcare Latin America
    Kieran Murphy, President and CEO, Life Sciences
    Charles Koontz, President and CEO, Healthcare IT and Chief Digital Officer
    Karim Karti, President and CEO, Imaging
    Thierry Leclercq, President and CEO, Life Care Solutions
    Terry Bresenham, President and CEO, Sustainable Healthcare Solutions
    Jörg Debatin, VP and Chief Technology Officer
    Laurent Dubois, CEO, GE Healthcare Partners
    Thomas Mitchell, VP, Sourcing
    Sue Siegel, CEO, GE Ventures and healtymagination
    Thomas Westrick, VP and Chief Quality Officer

    NUMBER OF EMPLOYEES: 52,000 (333,000)

    GLOBAL HEADQUARTERS: Amersham, U.K.

    There is no mistaking the kismet.

    Nineteenth-century tinkerer Charles F. Brush is perhaps best known for illuminating Cleveland Public Square in 1879 with his arc lights and “dynamo” (electric generator). But his most groundbreaking invention took shape eight years later in his own backyard—a 60-foot wind turbine that powered his 17-room graystone mansion continuously for two decades.

    Easily his most conspicuous creation, the 40-ton windmill sat on a gudgeon that extended 8 feet into masonry. Its wheel measured 56 feet in diameter, had 144 cedar wood blades, and a sail surface of 1,800 square feet. A 20-foot shaft inside the structure’s tower turned pulleys and belts which, at its top speed, spun a dynamo 500 revolutions per minute. The dynamo itself connected to 408 batteries in Brush’s basement that illuminated 350 incandescent lamps ranging from 10-50 candlepower, and operated three electric motors and two arc lights. The entire contraption produced 12 kilowatts of electricity at its peak.

    Though it was hailed as a technical marvel, Brush’s windmill was not very practical. “The reader must not suppose that electric lighting by means of power supplied in this way is cheap because the wind costs nothing,” a Dec. 20, 1890, article in the Scientific American stated. “On the contrary, the cost of the plant is so great as to more than offset the cheapness of the motive power. However, there is a great satisfaction in making use of one of nature’s most unruly motive agents.”

    Thankfully, Brush didn’t need to profit from his green energy project. By the time he erected his windmill, the former child prodigy had already built his fortune through the arc light, dynamo, and more than 50 other patented inventions. He also ran a successful company (Brush Electric) for nearly a decade before selling it to Thomson-Houston in 1889, which then merged with several other firms to form General Electric in 1892.

    Now, nearly 130 years after first harnessing natural energy, Brush’s descendant firm is improving on his original turbine design with a digital wind farm project designed to improve efficiency and lower costs (cue the kismet).

    GE’s Digital Wind Farm is based on its new generation of Brilliant wind turbines, a 2 MW platform that uses a cloud-based computer modeling system to determine maximum power generation at peak efficiency for specific locations. Each turbine is connected to an advanced software network that allows for real-time contact and monitoring, permitting operators to make adjustments to boost efficiency. GE claims these digital farms could potentially increase energy production by up to 20 percent, and generate as much as $50 billion for the wind industry (based on all global wind farms using the company’s latest turbines and technology).

    “Every wind farm has a unique profile, like DNA or a fingerprint,” Keith Longtin, general manager for wind projects at GE Renewable Energy, told the Harvard Business Review. “We thought if we could capture data from the machines about how they interact with the landscape and the wind, we could build a digital twin for each wind farm inside a computer, use it to design the most efficient turbine for each pad on the farm, and then keep optimizing the whole thing.”

    GE’s cyber wind farms are part of a radical overhaul designed to transform the 124-year-old global conglomerate into a digital industrial leader of the IIoT (industrial internet of things). At the core of GE’s metamorphosis is a drive to use advances in sensors, communications, and data analytics to improve performance for both itself and customers. Pan-European medical service provider Affidea, for example, uses GE Healthcare’s DoseWatch software to analyze 65,000 computed tomography (CT) scans every month. Digital analysis enables clinicians to monitor radiation exposure and contrast media injection dose during CT procedures, effectually helping hospitals optimize and personalize dosage requirements for each individual, avoiding over-exposure. Similarly, Finnish engineers are developing wireless tools designed to stream heartbeat, blood pressure, respiration, and other physiological data into the cloud for future download and analysis by doctors and hospitals.

    “Our aspiration is to offer with every GE product a pathway to greater productivity through sensors, software, and big-data analytics,” GE Chairman and CEO Jeffrey R. Immelt told investors in the company’s 2015 annual report. “We have been investing in software and accumulating data for decades...the technology required to compete [as a digital industrial] is in our sweet spot. So, why not us?”

    GE’s success, however, may hinge more on strategy than motivation. In setting itself up as a software firm that can help businesses reap the benefits of the IIoT, GE will go head-to-head with more established players like Microsoft, Amazon, IBM, SAP, and Oracle. To boost its chances of survival among such reputable bellwethers, the company sold off GE Capital assets last year worth more than $100 billion, acquired energy businesses from French railway systems developer Alstom, created a Digital Division (integrating its Software Center, global IT/ commercial software teams, and cyber security arm, Wurldtech), and debuted its Predix cloud-based software platform for the industrial internet. Predix enables asset and operations optimization by providing a standard way to run industrial-scale analytics and connect machines,
    data, and people. Deployed on machines, on-premise, or in the cloud, Predix combines a stack of technologies for distributed computing and big data analytics, asset data management, machine-to-machine communication, and mobility.

    “We’re the only company that will have the machines, analytics and operating systems,” Immelt said in December 2015. “That’s how we’ll play the Industrial Internet.”

    GE’s IIoT game plan involves building $1 billion-plus digital franchises in each of its eight industrial businesses. Such an undertaking is already well underway in the company’s Transportation segment, which recently rolled out its newest locomotive, the Tier 4. Considered a “brilliant rolling data center” by industry bigwigs, the Tier 4 is equipped with more than 200 sensors that collect gigabytes of information about engine performance, exhaust, fuel mix, and rail conditions. The locomotive uses software to analyze collected data and determine ways to run smarter and more efficiently.

    Healthcare’s digital future will almost certainly rely on the Predix-powered GE Health Cloud unveiled late last year at the Radiological Society of North America 2015 annual meeting. Intended, essentially, as an ecosystem connecting software, hardware, and medical devices, the Cloud is GE’s modern-day solution to the more conventional methods used to store, share, and analyze imaging data from hospital equipment.

    The Cloud, though, is not designed to be an extension of GE imaging devices; rather, it aims to expand hospital radiology departments’ computing capabilities, accepting DICOM (Digital Imaging and Communications in Medicine) files from any instrument, regardless of manufacturer. Featuring an open software development kit for third-party programs, the GE Health Cloud will more or less resemble a large, agnostic cloud computing platform such as Amazon Web Services or the Google Cloud Platform, but with a menu of built-in apps for medical imaging.

    “We are fundamentally transforming life both for the radiologist and for the chief information officer,” Justin Steinman, chief marketing officer for GE Healthcare IT, said at the Cloud’s launch. “Since it’s built on a single platform, the cloud will enable CIOs of healthcare systems to quickly scale up or scale down their IT systems and roll out the latest tools. It will also make it easier for radiologists to collaborate with their peers within their hospital and with outside experts.”

    The Health Cloud’s Predix software—an industrial-grade version of smartphone platforms—allows developers to quickly create apps when they spot a new market opportunity. One app available at the Cloud’s launch was Centricity MDT Virtual Meetings, which allows clinicians to share screens and conduct live imaging analyses with entire care teams using their own devices. Another, Centricity Case Exchange, shares images with doctors outside of the user’s hospital, including physicians who don’t use the GE Health Cloud themselves.

    “With Centricity Case Exchange, I can publish an image in the cloud, send an email to a clinician in New York City, and ask him to do a remote consult,” Steinman explained.

    GE is developing its own apps, too; it is currently fine-tuning a program to work with longitudinal records of patient data, called Centricity Image Access Portal. The DICOM standard has already laid the groundwork for tying together a single patient’s imaging history, but in the high-performance computing environment of the cloud, that record can more easily be tapped for unexpected insights. The data-rich field of medical imaging is especially fertile ground for machine learning, finding patterns impenetrable to radiologists looking at a handful of scans at a time.

    “The industry is moving from healthcare that’s driven by volume to a system built on value,” noted Jan De Witte, president and CEO of GE Healthcare IT. “The Health Cloud will help us get there.”

    It might also help GE Healthcare rediscover prosperity. The segment was one of four that lost value in 2015 (year ended Dec. 31), falling victim to inflation, a stronger U.S. dollar, and lower prices of diagnostic imaging and clinical systems. Healthcare revenue fell 3.82 percent to $17.6 billion and profit stagnated, slipping $100 million to $2.9 billion, according to GE’s 2015 annual report. Total order value slid 3.6 percent to $18.6 billion and backlog rose 4.2 percent to $17.2 billion, with most of the reserve devoted to services ($11.6 billion).

    U.S. sales comprised nearly half of Healthcare’s 2015 revenue (48 percent). The segment garnered approximately 22 percent of its revenue from Asia, nearly 20 percent from Europe, 8 percent from the Americas, and 4 percent from the Middle East/Africa.

    Healthcare’s losses, however, paled in comparison to GE’s Oil & Gas segment, which experienced a 13.8 percent decrease in 2015 revenue ($16.4 billion) and a 12 percent dropoff in profit ($2.4 billion). Other segments with shrinking sales included Renewable Energy, where proceeds tumbled 1.9 percent to $6.2 billion, and Energy Management, which posted a 3.8 percent decline in revenue to $7.6 billion.

    The waning profits in Healthcare, Oil & Gas, and other business segments were partially offset by gains in GE’s other four units, stabilizing the company’s overall net sales last year. Power revenue rose 4.4 percent to $21.5 billion, while Transportation proceeds jumped 5 percent to $5.9 billion, Appliances & Lighting climbed 4.1 percent to $8.7 billion, and Aviation sales increased 2.8 percent to $24.6 billion. Total company sales rose a tepid $202 million to $117.38 billion but industrial earnings per share soared 19 percent. Moreover, segment margins expanded by 80 basis points.

    “We delivered good results. GE’s total stock return was 28 percent above the performance of the S&P 500, which grew by 1 percent, and the industrial index, which declined by 4 percent. GE ended the year as the eighth most valuable company in the world,” Immelt said in his letter to shareholders. “We are just beginning our transformation as the Digital Industrial company. Our success as a Digital Industrial depends on partnering with our customers. Our strategic opportunities are vast. Our products, and more importantly, our customer relationships, last for decades. At GE, we are builders.”

    Quite prolific builders, actually. The company’s Healthcare segment assembled more than a half-dozen partnerships last year, framing its future around medical image sharing, radiology services, cardiovascular medicine, big data research, clinical trials, and the hybrid operating room.

    In the year’s most high-profile collaboration, GE and the National Basketball Association (NBA) formed a research alliance aimed at preventing, diagnosing, and treating common sports injuries. The partnership is spearheaded by a 20-person strategic advisory board comprising team physicians and clinical researchers from various fields, including orthopedics, sports medicine, radiology, and epidemiology. It is chaired by Dr. John DiFiori, the NBA’s director of sports medicine and a former president of the American Medical Society for Sports Medicine.

    “It’s a partnership that makes a lot of sense from a research standpoint,” DiFiori told ESPN.com. “Our particular interest in research is that we’re focused on musculoskeletal issues, such as hamstring pulls, torn ligaments, herniated disks. The overuse injuries—soft-tissue injuries in particular—are probably not getting the attention that they need to. They can evolve into significant impact on the players’ careers. We want to make sure that is a big part of our advisory board and promote that as an area of active research.”

    GE Healthcare’s other partnerships included:
    • A collaboration with German hospital/operating room equipment provider Maquet to develop a new flexible angiography system for hybrid ORs. The system will combine GE’s Discovery IGS 730 with Maquet’s Magnus operating table system. The fusion of both products will open up operating rooms to multidisciplinary surgical interventions. Since the Magnus system has a universal tabletop, the hybrid OR can also be used for standard procedures.
    • An agreement with OneMedNet Corporation to promote data and peer-to-peer image sharing in the United States. Enabled by OneMedNet’s BEAM Network, providers can quickly and securely transfer images using a patented peer-to-peer web-based service.  
    • A seven-year pact with Temple University Health System to provide high-quality, efficient imaging services at a lower cost. The pair is aiming to save $39 million by targeting changes in Temple’s “operational, clinical, and financial outcomes.” GE is upgrading the radiology departments at Temple University Hospital’s main, episcopal, and northeastern campuses, Jeanes Hospital, and the Fox Chase Cancer Center, installing its most up-to-date technologies and providing consultation services.
    • A global supply agreement for Sartorius Stedim Biotech’s membrane adsorber purification technology, Sartobind. The deal calls for Sartorius Stedim to manufacture its adsorber technologies for GE Healthcare’s life sciences division, which will market the product as part of its ReadyToProcess portfolio.
    • A memorandum of understanding (MOU) with Oregon Health & Science University (OHSU) to develop collaborative research programs in cardiovascular medicine, imaging, and big data research. GE Healthcare engineers will team with OHSU physician-scientists to investigate the use of ultrasound for value-based healthcare in rural and underserved communities; and adapt and test magnetic resonance pulse sequences to enhance neurovascular studies. Under the MOU, GE Healthcare will provide mentorship and support to OHSU through the MedTech Alliance, Biomedical Innovation Program, and the OHSU Startup Conference.
    • A collaboration with Emerson Process Management, a global business of Emerson, to increase productivity and improve efficiency in biopharmaceutical production. The two companies are working together to integrate Emerson’s DeltaV distributed control system with GE Healthcare’s enterprise offerings and start-to-finish technologies for the global biomanufacturing industry. The first DeltaV-driven GE Healthcare installation, FlexFactory, is an integrated manufacturing platform based on single-use technologies.  
    • A union with NeoGenomics, a biotech company specializing in genomic cancer diagnostics. The Fort Myers, Fla.-based firm purchased GE Healthcare’s Clarient unit last fall for $275 million to diversity its portfolio, and is teaming with the larger merchant on bioinformatics to explore the potential for new products that combine genomic and imaging data.
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