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Philips Healthcare

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PUBLICATION DATE: 22 Jan 2016
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...................................................Philips Healthcare TABLE OF CONTENTS TABLE OF CONTENTS Company Overview......................................................................3 Key Facts..................................................3 SWOT Analysis..................................................................................................4 Philips Healthcare © MarketLine Page 2 ......................................

Philips Healthcare Company Overview COMPANY OVERVIEW Philips Healthcare (or 'the company'). professional healthcare systems. The company recorded revenues of E9. a decrease of 65.com Revenue / turnover 9. imaging systems and clinical care systems. 2014.1% compared with FY2013.3% compared with FY2013.2 million) during the financial year ended December 2014 (FY2014).186 million (approximately $12.0 (EUR Mn) Financial Year End December Employees 37. It is headquartered in Andover.philips. The operating profit of the company was E456 million (approximately $606 million) in FY2014.186. treatment. Massachusetts. Philips Healthcare operates in more than 100 countries across the globe. The company's product and service portfolio consists of home healthcare solutions.healthcare.065 Philips Healthcare © MarketLine Page 3 . a decrease of 4.065 people as on December 31. a business sector of Koninklijke Philips (Philips). KEY FACTS Head Office Philips Healthcare 3000 Minuteman Road Andover Massachusetts 01810 1099 USA Phone 1 978 659 3000 Fax Web Address http://www. health management and monitoring. is one of the leading providers of medical systems for screening and diagnosis.208. and employed 37.

one of the leading companies in body temperature management. Philips Healthcare © MarketLine Page 4 . the 2009 acquisition of Canada-based Traxtal. and also bridged its care cycle strengths in diagnosis and management. Coupled with its strong position in medical imaging. has helped the company broaden its offerings in emergency care. a part of Koninklijke Philips.Philips Healthcare SWOT Analysis SWOT ANALYSIS Philips Healthcare (or 'the company'). a provider of minimally invasive instruments and software for image-guided intervention and therapy. is engaged in the manufacture and marketing of medical systems for screening and diagnosis. health management and monitoring. 'tuck-in' businesses supports its growth initiatives. the Traxtal acquisition has made Philips one of the leading solution providers for image-guided procedures. The company's acquisition of small and complementary businesses has enabled it to expand its healthcare business portfolio. For instance. Philips' strategy of acquiring small. Further. the acquisition of US-based InnerCool Therapies. cost containment measures in the US Health Care Reform Act could affect the demand for the company's healthcare products. However. has helped Philips extend its imaging business to image-guided intervention and therapy. Strengths Weaknesses Small 'tuck-in' acquisitions enabling Philips Healthcare to tap growth opportunities Strong presence in lucrative home healthcare market Simplified business portfolio Product recalls may affect the company's brand image Opportunities Threats Acquisition of Volcano may enhance the company’s customer base Launch of new products may strengthen the company’s product portfolio Partnership with Inspirata to advance digital pathology in the US Aging world population likely to spur demand for healthcare products and services Healthcare reform in the US may affect the company's business Stringent reimbursement rules and regulations Strengths Small 'tuck-in' acquisitions enabling Philips Healthcare to tap growth opportunities In the healthcare sector. treatment.

The acquisition of Respironics has put Philips Healthcare at the forefront of the fast-growing market for home healthcare solutions. Strong presence in lucrative home healthcare market Given the escalating healthcare costs in many markets and increased emphasis on both efficiency and patient comfort. widespread insurance coverage. Philips Healthcare © MarketLine Page 5 . remote cardiac services and remote patient management services. Simplified business portfolio Philips has fundamentally simplified its business portfolio across its sectors including Healthcare since 2000. The US is expected to remain the largest market globally based on its extensive network of home health care providers. improve clinical outcomes. At the home healthcare front. cardiology and women's health. It has directed its focus on six platforms including professional healthcare. In the professional domain. Respironics (now Philips Respironics) is one of the leading US-based global providers of innovative respiratory and sleep therapy solutions for both hospital and home use. the company has designed new Trilogy100 portable at-home lifesupport ventilator to be simple to use and live with. For example. Philips's healthy life platform addresses the need for healthy. caring relationships. Philips works together with its clinical provider customers to improve the quality of life for at-risk individuals in the home through better awareness. And the personal care platform focuses on consumers' need to be fit. Aerogen is a privately-owned respiratory drug delivery company headquartered in Ireland.Philips Healthcare SWOT Analysis The acquisition of Sectra's mammography equipment line has strengthened Philips Healthcare's women health portfolio. The home healthcare solutions business of Philips Healthcare offers sleep management and respiratory care. For instance. The company has further expanded its capabilities in imaging equipment services through the acquisition of All Parts Medical. treating and monitoring patients in their homes rather than in hospitals. Philips' wearable Activity Monitor records the person's daily movements and transfers the information to a webpage that keeps track of the person's progress against longer-term goals. treatment. diagnosis.The company further solidified its presence in home healthcare solutions with the acquisition of the aerosol therapy business of Medel in Italy. medical alert services. and reduce healthcare cost. monitoring and management of their conditions. a provider of imaging equipment parts. Philips further strengthened the innovation capabilities and product portfolio of Philips' respiratory drug delivery activities within its Home Healthcare Solutions business in 2014 by obtaining a technology license and acquiring select assets solely related to Aerogen's home-care business. Further. home healthcare. and shifting patient care strategies toward home settings. there is a gradual shift towards diagnosing. Philips is engaged in the development of solutions that help improve the way both patients and professionals experience healthcare. and healthy life/personal care. high health care spending intensity. the company expanded its position in the anesthesia market with the acquisition of Danish anesthesia firm Dameca. Philips focuses on the range of medical issues associated with oncology. The rising number of elderly people and the subsequent growth in the incidence of chronic diseases is also driving the demand for home healthcare.

navigation systems. if the system had been powered on for over 12 hours. the company issued a recall of all Gel-E Donut gel pillow and Squishon 2 gel cushion products due to potential mold contamination of the products. acquired Volcano Corporation (Volcano). Launch of new products may strengthen the company’s product portfolio Philips Healthcare © MarketLine Page 6 . Volcano acquisition is an important milestone in its strategy to become one of the leading systems integrator in the growing image-guided minimally invasive surgery market and accelerate the growth in that market. manufacturing and selling medical imaging devices for cardiovascular care and other specialties. The combination of Volcano’s portfolio of imaging and measurement catheters and Philips Healthcare’s interventional imaging solutions would allow the company to provide customers with an integrated solution to improve procedural outcomes at a decisive stage in the health continuum. However. For instance. even if mold was not visible. Royal Philips. Volcano offers physicians and their patients around the world with tools that aid diagnosis and guide and provide therapy. Such product recalls could affect the consumer confidence in the company's products and its brand image. it recalled Computed Tomography Systems after finding that a software defect exists in marketed product wherein the sign indication of the longitudinal position of some types of scan is inverted.Volcano’s acquisition also complements Philips Healthcare’s portfolio of interventional X-ray and ultrasound imaging equipment. the parent company of Philips Healthcare. the company recalled DigitalDiagnost System XRay designed to emit a beep upon termination of an exposure. This in turn would help Philips Healthcare in enhancing its customer base. Volcano is one of the leading companies in intravascular imaging for coronary and peripheral applications. Earlier in November 2014. software and services.Philips Healthcare SWOT Analysis Weaknesses Product recalls may affect the company's brand image The company has recalled several of its products in the recent past. and physiology. in April 2015. the system would no longer emit this signal. a US-based company engaged in developing. Opportunities Acquisition of Volcano may enhance the company’s customer base In February 2015. This acquisition would create new sources of recurring revenue streams for the company. In May 2015. As stated by the company. It also offers a suite of peripheral therapeutic devices. Customers were asked to discontinue use and dispose of all Gel-E Donut gel pillow and Squishon 2 gel cushion products in their facility.

more sophisticated means of delivering those services increases. dual-limb system. Launch of such new products is likely to strengthen the company’s product portfolio. Inspirata’s managed service model would supply the necessary IT infrastructure. a provider of a cancer diagnostics solution that digitizes and automates the entire pathology workflow using a unique. partnership with Inspirata may help the company in advancing its digital pathology business in the US. In May 2015. the creation of improved insights and algorithms would help pathologists in better informed decision making. Between 2005 and 2050. “solution as a service” delivery model. In June 2015. the population aged 60 or over is expected to nearly double from 245 million in 2005 to 406 million in 2050. Partnership with Inspirata may help the company advance digital pathology in the US In March 2015. Philips Healthcare and Inspirata. services and resources for a digital program and eliminate capital expenditures related to the transition. being a global leader in the areas of home healthcare. the company is using automatic quantification and intelligence and an image quality to bring more diagnostic confidence to cardiac procedures and to create more reproducible results. the Philips Respironics V680 Ventilator is the first ventilator to combine the Philips gold standard single-limb noninvasive ventilation (NIV) solution with a fully featured. half of the increase in the world population will be accounted for by a rise in the population aged 60 years or over. Furthermore. in April 2015. Focusing initially on the needs of US cancer centers. By reviewing data from CareSage’s analytics and the wearable medical alert devices. Health systems are looking for solutions to provide an effective way to an accurate diagnosis. For instance . As the global population ages. health systems can predict when their at-home patients are likely to be hospitalized and intervene in advance. Philips launched HeartModel. cardiac ultrasound. Built on the foundation of Philips’ innovation and experience in clinical informatics. a new predictive analytics engine that enables health systems to monitor and care for elderly patients by combining insights with wearable devices and monitoring. offering both invasive and noninvasive ventilation. Philips Canada launched Philips Respironics V680 Ventilator for hospital respiratory care. Philips Lifeline introduced CareSage.Philips Healthcare SWOT Analysis The company has launched several new products in the recent past. in the more developed regions. entered into a joint development agreement to advance digital pathology through the development of advanced image analytics and automated workflows available as a solution-as-a-service delivery model. cardivasculor Philips Healthcare © MarketLine Page 7 . the demand for healthcare services and more importantly. a new anatomically intelligent ultrasound (AIUS) tool that brings advanced quantification. automated 3D views and reproducibility to cardiac ultrasound imaging. Philips Healthcare. As reported by the company. the demand for innovative. By combining AIUS with the power of HeartModel. Hence. Aging world population likely to spur demand for healthcare products and services The populations across the globe are aging rapidly as a result of declining fertility and increasing longevity.

known as the Stark law. Foreign governments also impose regulations in connection with their healthcare reimbursement programs and the delivery of healthcare goods and services. Phillips Healthcare's failure to adapt to these changes can have a negative impact on its business. which started in 2013. known as the anti-kickback laws. including the Centers for Medicare & Medicaid Services (CMS) as well as comparable state and foreign agencies responsible for reimbursement and regulation of healthcare goods and services. In 2010.Philips Healthcare SWOT Analysis X-ray and patients monitoring markets among several others. various industry participants including medical equipment companies are asked to contribute fee to the Act. Stringent reimbursement rules and regulations Phillips Healthcare's devices are subject to regulation regarding quality and cost by the US Department of Health and Human Services (HHS). Threats Healthcare reform in the US may affect the company's business Government oversight of and attention to the healthcare industry in the US is significant and increasing. such as Medicare or Medicaid.3% excise tax on sales of most medical devices. The non-compliance of laws and regulations by the company and its officers and employees could subject it to severe criminal and civil penalties. a new healthcare delivery model. which in turn could adversely affect its brand image and business operations. is well positioned to gain from the increasing demand for healthcare services. and those that prohibit healthcare service providers seeking reimbursement for providing certain services to a patient who was referred by a physician that has certain types of direct or indirect financial relationships with the service provider. The legislation also permits the establishment of accountable care organizations. the US federal legislation was enacted to reform healthcare. Further. which will be responsible annually to submit proposals aimed at reducing Medicare cost growth while preserving quality. the legislation established the Independent Payment Advisory Board. For the implementation of healthcare reform measures. those that prohibit unlawful inducements for the referral of business reimbursable under federally-funded healthcare programs. In addition. The Congressional Budget Office estimates that the total cost to the medical devices industry could exceed $20 billion over 10 years. The principal US federal laws implicated include those that prohibit the filing of false or improper claims for federal payment. Philips Healthcare © MarketLine Page 8 . The US federal government healthcare laws apply when the company submits a claim on behalf of a US federal healthcare program beneficiary. This tax may put increased pressure on medical device manufacturers and purchasers. and may lead Philips Healthcare's customers to reduce their orders for products or they may request to reduce the prices in order to offset the tax. known as false claims law. or when a customer submits a claim for an item or service that is reimbursed under a US federal government funded healthcare program. one of the components of the new law was a 2.

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