Today on Healthcare PittStop I feel fortunate to have Cheryl Iodice from Philips Healthcare with me to talk about Philips’ evolving role in the healthcare ecosystem.
Welcome Cheryl. You’ve been with Philips for quite a long time. Could you tell folks what your role is there?
I’ve been in healthcare for well over 20 years and at Philips for about 18 or 19 of them. I am the senior vice-president for marketing for Philips North America.
Philips has made some major moves in the healthcare arena of late. They divested themselves of their lighting business and they’ve done some acquisitions. Can you speak at all about where Philips sees itself going moving forward?
Sure. About 3 years ago we adopted a really ambitious mission. We made a bold statement saying we want to improve the lives of 3 billion people by the year 2025. That has been driven by our need to reverse the increase of chronic diseases and—looking at a growing aging population—how we as a healthcare provider with deep consumer insights can help make the health and healthcare ecosystem a better environment, ultimately building a healthier society through being able to leverage our expertise.
Do you have specifics about how Philips wants to participate in that road map as we make this transition from volume to value-based care?
We’re looking at it from the standpoint of how we are helping healthcare systems take care of their patients. We’re looking at it from the standpoint of population health management, [starting from] our portfolio and areas of expertise. You just mentioned divesting the lighting business. That was where we were putting a stake in the ground, saying that we really wanted to invest heavily in the healthcare industry—the health technology industry really—and make connections [for] the consumer throughout this entire continuum from healthy living and prevention all the way through definitive diagnosis, therapy, and then in the home, knowing that we can intersect with people throughout that entire journey. So, we are looking at a roadmap of making these kinds of investments [in] our consumer businesses and our personal health businesses. We’re looking at how, from a prevention standpoint—from a healthy living standpoint really—we are able to intersect with folks in the early stage of life when it comes to childcare or healthy life style, then being able to provide the capabilities for people to [tackle health issues]—to have less cholesterol through our airfryers, for example—and then taking that and driving it through to where we have been predominant in healthcare. We have our imaging businesses, our therapeutic businesses—whether that be patient monitoring or our interventional guided therapy businesses and ultrasounds. We’re interested in being able to have a deep connection within the healthcare system and then back [home]—for post-acute care we have a whole hospital-to-home and home lifeline business for home monitoring—and being able to give people a better quality of life where they want to be. So we at Philips have a very unique place in this health technology industry, where we actually do have all of these various parts of somebody’s life journey and can intersect with them along the way. We’re trying to also see how to fill in the gap with things such as the acquisition of Wellcentive, where it’s helping us do better analytics as it relates to population health management and helping our customers with insightful and meaningful data they can use to take care of their patient populations.
In managing the continuum moving forward, do you see building all these solutions or are you going to try to find “best of breed”? I know smaller companies out there probably are looking at Philips as an exit strategy: Can we somehow help Philips execute on this big vision? How do you expect Philips to fill that roadmap out?
I think it’s going to be a combination thereof. I think there are going to be places where we actually have the deep knowledge that we can tap into and develop new innovations with our customers around challenges they need to address. Through these long-term partnerships that we’re trying to develop, we’ll be able to see what technologies we have potentially in our personal health businesses or in our healthcare businesses and how we [can] bring those things together. And then complimenting that through partnerships with others. We do that in many of our businesses already, where we have partnerships with other companies, say in our cath lab. We have many partnerships with other groups to fill out that entire workflow, where we can help with the ability to get the images into different locations quickly for consultations for people in different parts of the country or even different parts of the world. And that’s not necessarily a Philips solution; these are smaller businesses, medium-size businesses, larger businesses. And we see that in order for us to fulfill our ambition, we are going to have to work with multiple companies. And there will be inorganic growth as well, where we want to look at opportunities, where we can fill out our portfolio and have them part of the Philips family.
I’m well aware of your relationship with Banner Healthcare. Deb Dahl, VP of Patient Care Innovation, has been here to offer her advice to innovators. The Banner relationship is quite unique in that Philips first helped them with e-ICU and is now helping them with chronic care management for the elderly population. Can you speak to why that relationship was so successful?
Our relationship with Banner goes back a while, where you talk about e-ICU. [We also started a pilot] ambulatory care type of program a few years ago to help them look at how they can take care of their populations in a fashion that is not necessarily all within the acute care space. In putting together this telehealth program, we were able to focus on the most complex and highest-cost patients– their top 5 percent who accounted for 50 percent of their healthcare spend. What we’re trying to do there is to [identify] those cohorts of patients in which we can help reduce that spend for our customers. And Banner was a perfect partner in which to take this up and try to drive some change. I would say it continues to be successful. In the first couple of years we were able to look at reducing costs upwards of more than 25 percent, driven primarily by the reduction in hospitalization rates. In the partnership, everybody’s in it to try to figure out what that right formula is going to be to make it successful.
You can put technology in place, but if you don’t necessarily have change management around that technology, it may not necessarily produce the results that you’re looking for. And that’s where I think the value of the Banner and Philips relationship has really flourished. It’s because we’re all trying to make sure that we’re able to not just put technology in place but also adapt the workflows around it to make that as effective as it’s supposed to be. What we hope is to engage all of the various stakeholders that need to make that happen, and that’s where the value of this relationship has been able to deliver the results of these kinds of programs.
I can’t agree with you strongly enough. I think change management is absolutely the key far more than the technology piece. A lot of hospitals are really struggling with population management, kind of building their own stuff, and you wonder if they couldn’t get to where they want to go, which is a deliverable on care, with better partnership relationships.
Is there anything else you think that folks would like to hear from you? The future of healthcare or things that Philips is trying to pursue that might be of interest.
At Philips, we’re trying to look at it from both health and healthcare. [That means] instead of reactive care, being proactive. That’s really what we’re trying to put in place across our entire organization. Again, [we want to] improve people’s lives through meaningful innovation. We know this is a journey, something we are building out. But we have many pieces that we feel are able to come together fairly easily when we think about the whole post-acute care journey—what we offer for folks within different parts of our business—as well as within the acute-care space, and then even beforehand in prevention and wellness. Our mission—as I mentioned in the very beginning—is to improve the lives of 3 billion people, which is a lot of people a year, by the year 2025. This is a high aspiration but we are committed to it, and we really believe that through our relationships with our existing customers and hopefully with new customers that we will be able to achieve that aspiration. This is something that we take very seriously, and I think we are going to evolve from what people might know us as today into much more of a holistic organization that really is, again, looking at health and healthcare. We’re evolving. The market’s evolving. We’re looking forward to being a part of it.
Speaking of that, GE came out last year talking about at-risk selling—basically outcomes-based selling of solutions. Should folks expect to see that from Philips, where you align this kind of at-risk selling, where you release a solution if there are savings on the healthcare system’s side? Does Philips want to share in that success or are they not ready for that yet?
Actually, we’re already doing it. We have some great partnerships in this framework: Augusta University Health (which was formerly Georgia Regents Medical Center), Westchester Medical Center, Marin County General Hospital, McKinsey Health up in Canada. These are all multi-year, multi-million-dollar partnerships where we are not looking at that transactional relationship with the customer but at how we can impact them and their patients and communities by putting into place these longer-term relationships. We know that the change management piece takes time, but we are putting things at risk. In the case of Georgia Regents/Augusta University (they were Georgia Regents when we first signed up with them) we’re really rethinking how we do things together, and we have case studies that show tremendous savings on their behalf. But really, it’s about the collaboration. This is not where we’re just trying to sell a piece of equipment. We are working together with them to redesign care. We have people that are actually a part of their organization, sitting at the table with their executives and their administration, to really understand what their strategic initiatives are and the things that we can support them in, and then putting the key performance indicators on—how are we going to measure whether we’re successful or not? And at MacKenzie Health in Canada, we’re actually developing, from the ground up, the hospital of the future. We’re right there at the stage of their development [and can see what] that looks like and what they are trying to achieve. So these are the types of strategic partnerships that are going to be very important as we progress in our journey, and in our ambition to help the customer and these health systems deliver upon their promise to their communities and their patients. This is going to be more and more our norm, versus what has traditionally been the case where it’s been more transactional.
That’s key to the future, I think. Hospital systems are under a lot of duress and they’re really looking for partners who want to come along with them on the journey as opposed to transactional selling.
Cheryl I want to thank you very much for your time. It’s been very insightful and I appreciate your taking a little bit of time out to talk to me.