Philips Plans Health-Care Deals; Seeks Google, Microsoft Skills
Steve Rusckowski
Jock Fistick/Bloomberg
Within the health-care unit, Philips plans to expand the home care business from about 15 percent of the division’s sales to about 20 percent as care increasingly takes place at home, Rusckowski said.
Within the health-care unit, Philips plans to expand the home care business from about 15 percent of the division’s sales to about 20 percent as care increasingly takes place at home, Rusckowski said. Photographer: Jock Fistick/Bloomberg
Steve Rusckowski
Jock Fistick/Bloomberg
Philips has bought more than 20 health-care companies in the past three years, is targeting small and midsize deals, although it can’t rule out doing “something larger,” Steve Rusckowski, the health-care unit head said.
Philips has bought more than 20 health-care companies in the past three years, is targeting small and midsize deals, although it can’t rule out doing “something larger,” Steve Rusckowski, the health-care unit head said. Photographer: Jock Fistick/Bloomberg
Royal Philips Electronics NV is looking for acquisitions as it expands in cardiology, oncology and women’s health and plans to work with Google Inc. and Microsoft Corp. to improve home-care offerings.
Philips, which has bought more than 20 health-care companies in the past three years, is targeting small and midsize deals, although it can’t rule out doing “something larger,” Steve Rusckowski, the health-care unit head, said in an interview.
Philips predicts the global health-care market, including equipment, home health care and services, will expand by 4 percent to 5 percent annually from 2011 because of ageing populations and more chronic diseases. The company, the largest maker of patient-monitoring systems, spent more than $10 billion buying health-care assets since 2001.
Within the health-care unit, Philips plans to expand the home care business from about 15 percent of the division’s sales to about 20 percent as care increasingly takes place at home, Rusckowski said.
Home monitoring is a market where Philips sees gaps in its product range, he said. The global market for home health care, including sleep, respiratory care and home monitoring, is forecast to expand by a “high single digit” percentage, outpacing the overall market, he said.
Respiratory Disorders
Rusckowski, 52, who became head of Philips Medical Systems in 2006, oversaw the purchase of Respironics Inc., a maker of masks and ventilators to treat respiratory disorders, for 3.6 billion euros in December 2007. It was Philips’s largest acquisition ever.
This month, Philips added CDP Medical Ltd., an Israel-based provider of systems for digitizing imaging information, to its Patient Care and Clinical Informatics business. In July, it purchased Shanghai Apex Electronics Technology Co., a Chinese manufacturer of ultrasound transducers, which determine the image quality for ultrasound systems.
The company also wants to combine its medical technology experience with the information management skills of companies such as Google and Microsoft, addressing a gap in its health- care offerings, Rusckowski said.
Companies such as Intel Corp., Google and Microsoft are conducting research on how people individually manage personal health information, he said. “We are working hand in hand in understanding what these companies are doing and how Philips potentially could participate.”
Monitoring Patients
The company has been active in telemonitoring, or monitoring patients from a distance, for 15 years, giving it a headstart over competitors, Rusckowski said.
“It is not easy to understand how you can make technology to serve this market, but more importantly how the business models work and how the economics work in every country in the world,” he said.
Philips in May agreed to place remote monitoring devices in rural areas of New Mexico, in cooperation with Cisco Systems Inc. and health insurer UnitedHealth Group Inc., Rusckowski said. In the Netherlands, the company started a trial for home monitoring of patients with chronic heart failure in conjunction with health insurer Eureko BV’s Achmea unit as early as 2005.
General Electric Co. and Intel this month said they formed a venture to create products for patients with chronic diseases and for elderly people at home or in assisted accommodation.
Profitability
Chief Executive Officer Gerard Kleisterlee has reshaped Philips in the last nine years to focus on industries with high profit margins and stable earnings, shrinking the number of operating units to three from six. Kleisterlee steps down in 2011 and will be succeeded by Frans van Houten.
Rusckowski declined to comment on whether the company would buy Hologic Inc., a U.S.-based manufacturer of imaging equipment focused on women’s health, including breast cancer diagnosis and treatment and osteoporosis detection.
“There’s a lot of space in those three categories of cardiology, oncology and women’s health, not necessarily completely isolated to one company,” he said. “There are plenty of opportunities for us to explore and that will continue to give us good growth.”
To contact the reporter on this story: Maud van Gaal in Amsterdam at mvangaal@bloomberg.net
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