Related Items
Philips Working To Digest Its Buys
April 1, 2008
“We’ve gained considerable market share in our patient monitoring space,” says Brent Shafer, CEO at Philips Healthcare’s North American operations in Andover, Mass.
The name Philips Healthcare also is new, after parent Royal Philips Electronics reorganized in 2007. The company created three core sectors covering health care, lighting and consumer products.
Under the reorganization, Philips Medical Systems absorbed the Home Health Solutions division and was renamed Philips Healthcare, which sells medical imaging devices, defibrillators, patient monitoring systems and supporting information technology.
Now, Philips Healthcare is counting on its recent acquisitions to bring new sales opportunities among existing and potential patient monitor customers.
The company acquired Emergin Inc., a Boca Raton, Fla.-based vendor of a wireless application that integrates with patient monitors, nurse call systems, and other information and communications systems to send alarms of adverse patient events to clinicians via the communications device of their choice.
It also spent $427 million for Baltimore-based VISICU Inc., which sells telemedicine technology enabling specialists to remotely monitor intensive care units and consult with on-site clinicians.
A Decision To Expand Services
By integrating VISICU’s support for continuous oversight of ICU patients and Emergin’s capability to trigger alarms of adverse patient events into its patient monitors, the company expects to create cross-selling opportunities, Shafer says. That’s because Philips Healthcare is moving from simply offering views of vital signs data from patient monitors to offering clinical decision support based on that data.
That, in turn, extends the solutions that company can offer “around the bedside,” Shafer says. “These are building blocks to improve outcomes and cut costs.”
Philips Healthcare moved to support its patient monitor business because lower Medicare reimbursement for outpatient diagnostic medical imaging is affecting new sales opportunities for imaging equipment inside and outside the hospital, Shafer says.
He estimates the move by Medicare probably cut demand for imaging devices by $1.2 billion across the outpatient market in 2007, and the lower demand “has found its way into the hospital market as well.”
Still, Philips Healthcare last year acquired XIMIS Inc., an El Paso, Texas-based vendor of radiology information systems, a new addition to its product portfolio. Thus, integration with Philips’ iSite picture archiving and communication system will give the company its first RIS/PACS product. After the XIMIS deal, the company returned to its focus on the patient monitoring product suite with two more acquisitions. Philips Healthcare paid $110 million for Raytel Cardiac Services, Windsor, Conn. Raytel sells cardiac, blood, vital signs and pulmonary testing and monitoring devices for use in the home.
The company also at the end of 2007 agreed to acquire Respironics Inc., Murrysville, Pa., for $5.1 billion. The vendor of sleep apnea treatment products and respiration systems recently entered the home oxygen market. The acquisition was not made for its I.T. value, but Philips Healthcare intends eventually to use I.T. to remotely collect data and monitor patients in the home, Shafer says.
After a busy year of acquisitions in 2007, the company’s focus for 2008, Shafer says, is to integrate the new products into the company’s portfolio. Although the company might consider making some acquisitions to fill some niches, “we’re unlikely to see a big one in the short term,” he adds. Also on the agenda for this year is Philips Healthcare’s intent to sell its 70% stake in medical transcription/dictation software and services vendor MedQuist Inc., Mount Laurel, N.J.
Philips Healthcare never got the value it expected from the MedQuist investment. In early 2004, MedQuist discovered substantial irregularities in how clients were billed and spent the next three years revamping billing practices and the corporate culture, changing leadership, working to regain customer trust, restating financial results, and becoming compliant again with regulatory reporting requirements.
(c) 2008 Health Data Management and SourceMedia, Inc. All Rights Reserved." http://www.healthdatamanagement.com http://www.sourcemedia.com
More Corporate Strategy Articles
Medical Imaging Archive
Mobile Tech Archive
Vendor News Archive
Hospitals Archive
Marketplace
- About Us
- Advertising/Media Kit
- Reprints
- Editorial Calendar
- Contact Us
- Customer Service
- Privacy Statement
©2008 HealthDataManagement and SourceMedia, Inc. All rights reserved.
SourceMedia is an Investcorp company.
Use, duplication, or sale of this service, or data contained herein, is strictly prohibited.
