GE Healthcare Technologies (GEHC 0.57%)spinoff from General Electricis due to report its first-quarter earnings on April 25. Shares are up more than 46% so far this year, and the company is using artificial intelligence (AI) to improve healthcare efficiency.
Nowadays, many companies are throwing around the AI buzzword as it seems to be good for attracting investor interest. However, there are healthcare companies that are applying machine learning to almost every part of their business, and GE HealthCare is one such example.
Seeks growth through mergers and acquisitions
In January, shortly after it was spun off from GE, GE HealthCare bought French company Impactis, which uses computed tomography (CT) interventional guidance to help surgeons. The process uses CT to guide needles in a wide range of procedures. In April, GE HealthCare said it was developing CT-navigation to provide clinicians with real-time 3D CT images to guide stereotactic needs for biopsies, drainage, therapy and other applications.
In February, the company bought Caption Health, a privately held company that uses AI to help conduct ultrasound scans, through various Caption AI applications. The idea is that the apps make ultrasound examinations easier and faster, allowing a wider group of professionals to take basic echocardiograms.
At the time of the purchase, Caption Health CEO Steve Cashman said the combination would allow clinicians to diagnose diseases earlier. “This will ultimately help us reduce costs and improve care,” Cashman said.
Separation from the competition
There is a lot of competition for GE HealthCare products, and other companies may be able to make their medical equipment for less. Where GE HealthCare shines, however, is through the development of integrated systems for these products.
Take her ultrasound machines for example. The use of ultrasound for diagnosis dates back to 1942, so the technology is hardly new.
However, GE’s latest ultrasound launch, ViewPoint 6, includes cybersecurity improvements, new tables and graphs, and better mapping reporting. Rising labor costs for hospitals are driving devices like the ViewPoint 6 to improve the workflow and documentation of ultrasound examinations in the emergency department.
GE HealthCare is also using AI to improve its MRI systems. In November, it introduced the Signa Experience, a platform of four connected technologies that enhance MRI scanning, led by the Signa One platform, which uses intelligent automation. The system includes AI applications to enhance MRI images and shorten scan times.
The company also recently launched a new asset management and network monitoring solution, ReadySee. It is designed to use data to better understand the devices and infrastructure that hospitals use, along with improving cybersecurity protocols to protect patient health information.
The intersection of integrated systems that can use data through machine learning to improve the functionality of medical equipment is what GE HealthCare sees as its strength.
GE HealthCare CEO Peter Arduini told medtech news website MedTech Dive last year:
I think about 97% of the data collected in a hospital today is really not being used. We look at it as a stacked gold mine that’s out there somewhere. And if we can help unlock that, even if I don’t own that data or even have direct access to it, but use it to make better decisions, that’s a win-win for patients. That’s a win for the institutions, and ultimately it’s going to be a win for our shareholder value creation.
On April 20, the company received FDA clearance for its Carescape Canvas patient monitoring platform. The standardized platform can be adapted to individual patient needs using smart parameter technology.
A strong start
GE HealthCare still has to adjust to being its own company, and at least for a while there will be costs associated with the new situation. For example, last year net income fell to $1.9 billion compared to $2.2 billion in 2021.
However, the company is off to a good start in growing revenue. The company’s first quarterly report since the spin-off said it had $18.3 billion in sales in 2022, up 4.3 percent.
The company operates in four segments: Imaging, Ultrasound, Patient Care Solutions and Pharmaceutical Diagnostics. The top three posted fourth-quarter revenue gains, led by 11% year-over-year growth in imaging, thanks to better sales of the company’s molecular imaging, computed tomography and magnetic resonance imaging systems.
GE HealthCare forecast organic revenue to grow between 5% and 7% this year, and that was before the acquisitions of Impactis and Caption Health. It also said it expects annual adjusted earnings per share (EPS) between $3.60 and $3.75, compared to adjusted EPS of $3.38 in 2022.
Development of long-term relationships with customers
Medical equipment can be expensive, but GE HealthCare’s use of artificial intelligence allows its machines to adapt, and the technology helps healthcare facilities reduce labor costs. The company’s integrated systems will promote customer loyalty because they extend the period before equipment becomes obsolete.
GE HealthCare is not a small company—it has about 50,000 employees—and it is executing on a growth strategy that its investors and customers can understand. Although it operates as a new company, it brings with it all the advantages and experience of being part of GE before.