GE Plans Broad Push In Healthcare
General Electric's announcement today that it will invest $6 billion in a worldwide "Healthymagination Initiative" raises familiar questions about the interplay of free enterprise and healthcare reform in the U.S. While some components of GE's plan could help lower costs, raise quality, and increase access, as CEO Jeff Immelt contended in a press conference, the overall program seems designed to expand GE's healthcare business and its profits. As Immelt put it candidly, "We don't run a charity at GE. We're in business to make money for our investors."
GE's planned investment in healthcare includes $3 billion to develop 100 new products and services, $2 billion to finance healthcare IT in rural and underserved areas, and $1 billion over the next five years for partnerships, media content and services related to the campaign. It has also set a goal of helping hospitals save $1 billion over the next five years through process redesign.
While the company plans to reduce growth in healthcare spending on its 6,000 U.S. employees and dependents to the rate of the CPI, Immelt has also set a target of increasing GE's healthcare business two to three times faster than the rise in the GDP. Some observers might see a contradiction between these goals. But Immelt doesn't, partly because the company aims to create new, lower-priced products.
One example is a handheld ultrasound machine that will cost 20 percent less than GE's current bedside ultrasound units. Another is a "low-dose" CT scanner that will cost 15 percent less than current products. Of course, such innovations--if they provide as much clinical value as their predecessors--will spur demand, increasing GE revenues. And greater access to these technologies, as numerous studies attest, will encourage providers to order more tests, driving up costs.
GE will develop some of the new products abroad for local markets. Immelt noted that its healthcare business is booming in China and India, and he said that some of the products designed in other countries might eventually find their way to the U.S. market. Meanwhile, he observed that "healthcare is a really good industry that creates a lot of jobs and exports" for the U.S., and is one of this country's competitive strengths. Again, this seems to be a contradiction, but not for GE.
Like other health IT vendors, GE is planning a strong thrust into this field that will help it capture an optimal share of government spending on EHRs. Next year, GE plans to release a new EHR that will include clinical decision support features that it developed in partnership with the Mayo Clinic and Intermountain Healthcare. According to Immelt, broad adoption of this EHR would allow patients to receive the best care 90 percent of the time and could reduce healthcare costs up to 30 percent.
The central feature of this new product is that it imbeds "best-practice" protocols into the physician workflow. According to Dr. Brent James, an official of Intermountain, a similar EHR has helped make the big Utah health system one of the most efficient, high-quality systems in the U.S. The key to its success, he said, is that every doctor and every nurse has to use the protocols and adapt them to the needs of individual patients. The problem is that not every physician wants to follow the same guidelines, and it's a lot easier to get Intermountain's employed docs to toe the line than to get every private practice doctor aboard. More importantly, it's unclear how many providers will want to use GE's EHR. The company's current hospital product, for example, is not among HIMSS Analytics' top 10 EHRs.
GE is also making a significant commitment to increasing consumer awareness of healthy lifestyles--which may have the biggest impact on improving health. GE subsidiaries NBC Universal and NBC News will do more than 5,000 televised reports per year on health and wellness, and MSNBC will launch a new, daily program to disseminate health information, beginning in June. The Cleveland Clinic is also partnering with GE to find new ways to influence consumer health behavior.
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