Since its founding in 1892, General Electric has grown to one of the largest and most established companies in the United States: in 2014 alone, it took in more than $148 billion in revenue. Now, with more than a century behind it, the company is looking ahead to determine how to position itself for its next 100 years.
For GE Healthcare, that means facing the same issues as the rest of the healthcare industry, including declining reimbursements, increased patient volume, and an aging workforce. To weather these challenges, GE is pursuing a number of strategies. Chief among them is partnering with hospitals and clinical engineering departments to help health facilities improve utilization, asset management, and training opportunities. The company is also looking inward, implementing broad sustainability initiatives to reduce its carbon footprint and control costs—strategies it shares with its hospital customers. Deep partnerships, GE says, are the key to its future.
Partnering with Healthcare Facilities
Rob Reilly
Over the last 10 years, the C-suite has become influential in hospitals as decision makers, according to Rob Reilly, vice president and general manager of US and Canada services for GE Healthcare. Focused on this demographic, the company has expanded services beyond equipment to emphasize “capacity management, patient flow, and system-wide optimization” creating GE Healthcare Partners. “The context behind GE Healthcare Partners is to move the patient more seamlessly and create a good patient experience,” Reilly says.
To achieve this goal, GE leverages the lessons it’s learned from other GE businesses, specifically transportation and aviation. For example, by adapting optimization algorithms from aviation, GE has created “an air traffic control system for hospitals,” says Reilly, adding though that hospitals require much more sophisticated modeling. “You don’t know who your customer is, what conditions they’ll have, which care path they will follow.”
Reilly explains that projecting future patient demand, using basic hospital statistics, and evaluating operating room schedules can serve as a modeling tool for bed management and patient placement. “[Technology] has a big implication on service delivery and availability of assets,” he says. “We give clinicians tools to impact workflow.”
GE Healthcare’s Hospital of the Future, a cloud-based software application, provides simulation tools that help healthcare facilities optimize workflow and physical structure when designing new construction. “You have an advantage when you get in on the front end. We can rearrange things. You have total flexibility to move walls to facilitate clinician and patient travel time. This will be part of optimization and will make hospitals 10 to 20% more efficient,” Reilly says.
Partnering with Clinical Engineering Departments
In many instances, technology is already an integral part of the healthcare system, especially in clinical engineering departments. More than 50 hospitals are currently using GE’s AgileTrac system, which leverages RFID technology to help facilities understand and optimize demand patterns. Other devices, including infusion pumps and CT scanners, collect information that helps in the decision-making process surrounding patient care. For example, a pain pump can automatically trigger settings to meet a patient coming into the post-anesthesia care unit. GE’s approach can be summarized as “right patient, right setting, at the right time,” Reilly says. “This reduces the amount of equipment to service.”
Reilly sees the convergence of clinical engineering and information technology departments as a megatrend in the coming years. “At least 50% of [clinical engineering] departments are IT. Interoperability, connectivity, and cybersecurity are the coming things. You’ll never get away from PM and compliance issues, but developing integration becomes the future,” he asserts.
GE Healthcare currently partners with a number of clinical engineering departments as providers of “parts and smarts.” In addition to servicing more than 2 million devices, the company offers infrastructure analytics, RFID management software, and customized tools that augment existing skills and capacity within the hospital system. “There is no cookie cutter model. It’s a customized world and we play to the customer’s needs,” says Reilly.
In some cases, GE becomes an institutional part of asset management and capital planning. “We are the department, like we are hospital employees. We are accountable for outcomes and making sure financial deliverables are met,” he adds, noting that in other instances, GE serves as a background support system.
Future Concerns
One of the biggest concerns in clinical engineering departments across the country is the aging workforce, which GE is also working to address. Reilly points out that the average age of CEs is 50. “In the next 5 years there will be a massive amount of retirees, most of whom have 20-plus years of experience. How do you deal with that? How do you bring in a new generation and make them as productive as the veteran workers? This is the number one strategic challenge in the next 5 years: onboarding and training a new generation,” he says.
According to GE, training is the answer. The company has invested significant time and money to develop more effective training tools. The growing prevalence of technology and distance learning has prompted GE to pursue the creation of simulations. Reilly says, “We’ve invested millions in databases and better remote diagnostics. It’s all part of the equation. There will be a higher demand for different training. The new generation is more tech-savvy.”
On the service side, Reilly predicts a broader range of offerings from suppliers. “Supply chain was, and is, about purchasing and pricing. But now it will be as much about utilization and optimization, with a focus on the right patient in the right care setting. You need to move assets around to leverage across a system, to optimize a footprint across a system, and get improved utilization,” Reilly says. GE’s goal is to increase utilization with its partner hospitals from an average of 50% up to 75% or more. “You’ll never see 100%, but the cost savings could be hundreds of millions of dollars.”
Internal Initiatives
In addition to leveraging technology and hospitals’ existing assets to make them more efficient, GE wanted to help health facilities streamline their dependence on natural resources. But before engaging with external partners, GE Healthcare had to examine its internal practices.
“We wanted to address customer sustainability needs. But first we needed credibility,” says Hugh Zettel, the GE Healthcare leader of the Ecomagination Initiative, GE’s internal strategic plan to help customers and the company attain sustainability. “On an annual basis, we do a 3-year look across all businesses, their operating mechanisms, and identify common themes,” he says. Each entity had related sustainability needs, which GE placed under one umbrella from a product and supplier perspective to save energy, water, CO2, and waste. GE has invested $15 billion in sustainability-themed research and development across all its companies.
To identify viable ways to reduce energy consumption and greenhouse gas emissions internally, GE employees embark on a “treasure hunt,” according to Paul Holdredge, manager, Resource Strategies, who heads up the strategic planning and implementation of sustainability goals for the company. “Teams go to a lean factory and search for opportunities to further reduce energy use. By making a small change, you can substantially save energy. We have seen $350 million in total savings through this process.”
According to Holdredge, GE has realized a 31% reduction across the company in greenhouse gas emissions since 2005. Since 2006, the company has seen a 42% reduction in water use.
Additionally, GE has invested in solar as part of its renewable portfolio. Its plant in Waukesha, Wis, has one of the biggest solar installations in the state. “We display solar at a number of facilities and are looking at displaying more around the country,” says Holdredge.
Ecomagination
The Ecomagination Initiative also strives to create products that help facilities operate more efficiently by offering both “an environmental and economic benefit,” according to Zettel. “The product has to have demonstrated savings and a reduced environmental impact.” One such product is the +PlusPak, which replaces glass bottles for contrast media with polymer plastic, significantly reducing weight and potential for sharps injuries.
Zettel notes that often “hospitals were not judicious about medical waste,” tossing out potentially recyclable materials with other waste products, contributing significantly to a facility’s operating cost.
GE reports that hospitals generate approximately 7,000 tons of waste daily, for a $10 billion price tag in annual waste disposal costs. Between 2005 and 2013, the company sold 1.6 billion +PlusPak polymer bottles with a cumulative waste savings to hospitals of 150,000 tons and $39 million in disposal cost savings.
In the future, GE Healthcare anticipates forging more and stronger partnerships with healthcare facilities in general and clinical engineering departments in particular. “Deeper partnerships and collaborations are the most common ways to develop solutions that can be used across the industry,” Holdredge asserts.
Phyllis Hanlon is a contributing writer for 24×7. For more information, contact editorial director John Bethune at [email protected].
This article was updated on July 1, 2015, to reflect corrections to Hugh Zettel and Paul Holdredge’s job titles and details about GE’s Waukesha plant and emissions goals.
The C-suite’s responsibility to optimize the delivery of care and to differentiate their brand is driven by many factors. Some considerations are demographics served, competing health care providers, exploiting strengths, and regulatory requirements.
Once the modalities to be offered are selected, equipment functionality is specified and equipment selection can begin.
GE Healthcare is one of the largest providers of clinical equipment in the world. As a C-suite partner, would GE objectively evaluate and recommend equipment from competing vendors, if that equipment happened to meet the need more effectively than GE’s equipment? Do I smell a conflict of interest here?
Regarding training, will GE Healthcare train solely on GE equipment, or will they include the equipment of competing vendors?
Regarding parts supply, consolidation among healthcare delivery organizations is creating economies of scale that purchasing departments are taking advantage of, without paying for the services of a third party.