by John R. Fischer
, Senior Reporter | November 19, 2021
Following its spin off from General Electric, GE Healthcare is poised to be more nimble and able to adapt to changes in the markets it serves.
The company especially sees great potential in its fast-growing, diagnostic imaging equipment market with the growing influence of AI and more competition from startups and established players. Among the different demands it expects to be able to better address are the needs of aging populations, access to healthcare services in emerging economies, new technologies and the COVID-19 pandemic, according to The Wall Street Journal
“GE Healthcare will be more nimble because they are no longer hostage to the complexity of decision-making that comes with a company like GE,” Michael Abrams, managing partner of health consulting firm Numerof & Associates, told The Journal.
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GE announced earlier this month its intention to spin off its healthcare division
as a separate business. The decision was motivated by a desire to reduce debt, simplify the company’s business and improve its share price. GE Healthcare will be spun off in early 2023, with GE retaining a 19.9% stake in the new firm. GE’s renewable energy and power division will also be spun off in early 2024, with the main company singularly focusing on its aviation business.
Its confidence in its diagnostic imaging unit stems from higher demands for MR and X-ray systems to diagnose a growing number of age-related diseases and conditions brought on by sedentary lifestyles. Telemedicine has also bolstered the need for handheld imaging devices like ultrasound to monitor patients outside hospitals and the transmission of larger data sets over the internet.
As a stand-alone company, GE Healthcare will be able to move faster and have more capital to acquire companies and technologies. It accounted for about 23% of the whole company’s $79.6 billion in revenue last year, making it the most profitable division then, reports Modern Healthcare
Currently, GE is the world leader in the global market for medical imaging, which was worth around $22 billion in sales in 2020, according to Signify Research. It holds around a 26% share here, compared to Siemens’ 21% and Philips’ 17% stakes. And with more than four million installed units worldwide, it was able to rack up $18 billion in revenue last year.