Philips Healthcare.
1. Why has Philips launched HealthSuite?
Growing health care spending, aging population, legislation changes and increase in IT investments by the hospitals are the major factors that determined Philips’ interest in launching an innovative healthcare platform.
Health care spending in US is expected to increase 50 percent between 2014 and 2020. In 2009, people aged 60 and over comprised 11 percent of the population of the United States. This number is expected to go up to 22 percent by 2050. The 2010 Affordable Care Act has changed the fee-for-service approach used by most of the U.S. hospitals to fee-for-value model. This shift has put pressure on hospitals to cut costs while improving the quality of the service. Overall, healthcare system is in need of qualitative change, otherwise, it will fail to support the growing costs and number of patients in need of care.
2. Does Philips need partners to succeed? What are the challenges in the Philips/Salesfoce relationship?
Success of the HealthSuite Digital Platform (HSDP) is directly connected with forming effective partnership relations with several companies. HSDP was built as an open-end platform to encourage third-party developers to design and implement consumer-facing apps. Salesforce, the world largest CRM and cloud service provider was involved in HSDP launch as a partner offering customized solutions to hospitals and other healthcare organizations. Such partnership has saved Philips substantial amount of resources in customizing HSDP. The challenge in this relationship is to synchronize the efforts of two world leading companies and to make sure the efforts are not duplicated.
Philips also used services of Amazon Web Services and Pivotal as cloud infrastructure providers. The amount of data that is expected to be stored for HSDP is the main reason why such providers were needed. Their infrastructure and raw data storage capabilities allowed Philips to control its cost for the project.
3. Can Philips lead in integrating patient data from multiple sources? Why and why not?
Philips has designed and built HSDP to be an open-end system that can collect and store data from multiple sources. The whole idea behind the platform is that by collecting, sorting and delivering necessary information to various users in the health care chain, it can save costs to the hospitals on one hand, and dramatically improve the quality of the service to the patients on the other hand. This goal should be achieved by constantly monitoring the condition of the patients with chronic conditions and prevent crisis situations and readmissions by predicting them as far as one week ahead of the crisis. Various new apps designed to improve healthcare conditions in the future should be easily integrated in the HSDP because it’s a platform that is open for third-party developers. Such flexibility is one of the major advantages of the system. At the same time, the closed IT systems that some hospitals purchased from Philips’ competitors such as GE and Siemens may have interface problems with HSDP.
4. Which other players might challenge for this role?
There are several competitors that challenge Philips in the healthcare market. GE has approximately 30 percent of the market. EMR providers such as Epic and Cerner can also pose a threat to Philips’ ambitions in the healthcare IT market. GE has developed the Industrial Internet platform that collects data from all of the GE products worldwide. However, the platform is not designed for the consumer-facing products and therefore has a disadvantage compared to HSDP. EMR providers have stored a lot of data that is used by many hospitals, but it is not as user-friendly and open-ended as Philips’ product.
Overall, Philips has a competitive advantage over completion in deep understanding of the hospitals needs and major hospital business processes. It also offers a much more advanced, modern and adaptable platform that is connected with various types of medical equipment produced and sold by Philips.
