Philips' Healthcare Business Boosted By European Demand
By Jof Enriquez,
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The chief executive of Dutch conglomerate Royal Philips said recently that renewed demand in Europe has further reinforced the company’s commitment to re-focus on the growing healthcare informatics business, especially in the U.S. market.
“Europe interestingly is back on the growth curve for us, which is maybe a little bit counterintuitive to some,” Philips CEO Frans van Houten said in an interview with Bloomberg. The company earlier reported that third-quarter sales in Western Europe dipped by 2 percent, but more recent figures indicated an uptick in demand from hospitals in the region.
The upswing helps the company with its planned pivot into healthcare informatics, which is set to take place within the next 12 to 18 months as the company separates its healthcare and lighting businesses. Van Houten is particularly optimistic for the growth prospects of the newly formed HealthTech business entity in the U.S.
“The big investments in the U.S. health-care market are now in informatics,” he added in the Bloomberg interview. This despite informatics accounting for less than 10 percent of Philips’ total sales of 23.3 billion euros last year, the news outlet noted.
Modest figures notwithstanding, van Houten believes the company can tap into healthcare informatics as one of the next high growth areas in healthcare as more people become open to sharing health data through apps, wearables, and consumer devices.
“Philips is uniquely positioned to help reshape and optimize population health management by leveraging big data and delivering care across the health continuum, from healthy living and prevention to diagnosis, minimally invasive treatment, recovery and home care,” van Houten said in a statement issued in September announcing the major restructuring.
“The combination of our Healthcare and Consumer Lifestyle portfolios and the integration of the data from the connected products on Philips’ cloud-based digital health platform illustrate our opportunity to capture growth in an increasingly connected world, where societies are looking for more effective and lower cost health solutions,” he added in the statement.
Philips has been aggressive in moving into the $125 billion consumer healthcare market, as it recently announced agreements with other companies to connect its medical equipment used in hospitals and homes to the cloud.
In June, Philips unveiled an alliance with Salesforce.com to create a cloud-based platform to store clinical data from medical scanners, hospital IT systems, and remote monitoring apps, according to a Med Device Online article. The platform will help connect care providers and patients with chronic conditions to lower care costs and reduce the risk of hospital readmissions.