To Philips, the future means selling more than a better MRI machine

Philips building
Philips’ trek to becoming a service provider means selling someone not just a product, but a full diagnostic capability. (Philips)

As Philips transitions toward becoming an integrated service provider with a more holistic approach than a mere hardware manufacturer, it aims to use artificial intelligence (AI) and other technologies to help shepherd patients as they cross the gap from consumer health to professional care and back again.

By accompanying them each step of the way, the company hopes to boost its odds of improving outcomes over the long term, especially while more healthcare systems begin to trend toward value-based care programs, according to Philips’ chief innovation and strategy officer, Jeroen Tas.

That work includes incorporating methods from across clinical disciplines—tasks at which AI can excel by linking disparate data points and better organizing care delivery around both patient and population needs.

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Bringing together ultrasounds and CT scans with blood tests, genomics and medical history can help create new care pathways, while the addition of digital tech can provide remote monitoring and coordination that allow the system to operate more effectively, described Tas, who plans to speak at the MIXiii-BIOMED Conference next week in Tel Aviv—which, along with Haifa and other locations in Israel, serves as an innovation hub for a large portion of Philips’ informatics work.

“The whole theme around precision diagnosis is no longer about building the best MRI or CT scanner—it’s really about fusing the information you get from these modalities, and creating profiles or models of the disease that allows for a very precise selection of the right-fit therapy,” Tas told FierceMedTech. Those models themselves, once they become complex enough, could also allow for the development of completely new interventions.

“We've never been able to look at that data from so many perspectives, or been able to aggregate that information over so many patients,” he said. “We've never been able to extract patterns that may lead to completely new insights, and therefore completely new therapies. To be honest, we're only doing small steps right now, of what I believe is potentially possible.”

And in the next 20 years, the field of radiology itself could look completely different as well, he said. “We may become almost like the the data scientists—looking not just at images, but holistically at all the relevant information. Because somebody's got to do it.”

That doesn’t mean there isn’t room to also build a better scanner, however. Most of AI’s first applications have seen it embedded in devices, like in MRI machines with Philips’ Compressed SENSE algorithms, which have reduced scan times by 30% to 50%. Other computer vision technologies use a camera to detect a person’s breathing patterns and help the scanner adjust to the movement for a clearer image.

But if you were asked to list Philips’ health-focused consumer products, some of them might not be the first to leap to mind.

In sleep, for example, the company’s suite of air purifiers and smart-dimming light bulbs can be a start toward helping someone get a better night’s rest. “But if they find they can't, for clinical reasons, can we connect them to the right clinical resources?” Tas asked, noting Philips is a global provider in sleep apnea care.

In addition, there’s an opportunity to increase the diagnosis of conditions such as sleep apnea by relieving the behavioral and environmental factors and seeing whether bad sleep persists. “It's one of the most under-diagnosed conditions that can lead to other chronic diseases,” he said. “So the earlier we can help guide people to derive clinical care for sleep apnea the better.”

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In the marketplace, Philips’ trek to becoming a service provider means selling not just a product, but a capability.

That includes developing long-term relationships with health systems and hospitals and working with them to optimize that capability by rebuilding their patient flows and better integrating imaging and diagnostics with their overall care.

An MRI machine, for example, can be a 20-year investment or more. While you wouldn’t change out the magnet, other modules can be upgraded to increase throughput, image quality and the insights available.

“So you're increasingly looking at not just a one-time investment, you're looking at the value over the life of the machine that you want to maximize. That's not a product approach, that's a value-capability approach,” he said.

The evidence has been seen in Philips’ recent deals with health systems in Germany and Florida. Last July, the company signed a 15-year contract worth about €90 million ($100.7 million) with a hospital group in Cologne to upgrade and maintain its precision diagnosis and therapy systems—as well as a separate, eight-year consultancy agreement with a Munich hospital for €50 million. Meanwhile, in Miami, a creative 11-year deal with Jackson Health System will see Philips get paid per patient, instead of upfront, for providing monitoring services.

“It's a balancing act,” Tas said. “If you sell an MRI today, and you get a million for it, that’s money in the bank that you can book as sales. But if you say it’s becoming a service that can last 20 years—but I'm only going to make $100,000 this year—that's a trade off you’ve got to make.”

“Now, if you genuinely believe that you're in the business of addressing your customers’ emerging needs, and that you want to create a continuous engagement over time, that creates more value for your customer. You start looking at things differently.”

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