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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.......................................................................................4 Philips Healthcare © MarketLine Page 2 ...................................................................................................................................................................3 Key Facts.........................................3 SWOT Analysis.........

208. a decrease of 65.065 people as on December 31. is one of the leading providers of medical systems for screening and diagnosis. a decrease of 4. a business sector of Koninklijke Philips (Philips).186.Philips Healthcare Company Overview COMPANY OVERVIEW Philips Healthcare (or 'the company'). The operating profit of the company was E456 million (approximately $606 million) in FY2014.com Revenue / turnover 9. professional healthcare systems. and employed 37. Massachusetts. imaging systems and clinical care systems. It is headquartered in Andover.2 million) during the financial year ended December 2014 (FY2014). treatment.065 Philips Healthcare © MarketLine Page 3 . KEY FACTS Head Office Philips Healthcare 3000 Minuteman Road Andover Massachusetts 01810 1099 USA Phone 1 978 659 3000 Fax Web Address http://www.1% compared with FY2013.3% compared with FY2013. 2014.0 (EUR Mn) Financial Year End December Employees 37.healthcare. The company recorded revenues of E9.philips. Philips Healthcare operates in more than 100 countries across the globe. health management and monitoring.186 million (approximately $12. The company's product and service portfolio consists of home healthcare solutions.

Philips Healthcare SWOT Analysis SWOT ANALYSIS Philips Healthcare (or 'the company'). 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. Further. Philips Healthcare © MarketLine Page 4 . Philips' strategy of acquiring small. the 2009 acquisition of Canada-based Traxtal. and also bridged its care cycle strengths in diagnosis and management. has helped Philips extend its imaging business to image-guided intervention and therapy. is engaged in the manufacture and marketing of medical systems for screening and diagnosis. However. Coupled with its strong position in medical imaging. a part of Koninklijke Philips. For instance. a provider of minimally invasive instruments and software for image-guided intervention and therapy. health management and monitoring. cost containment measures in the US Health Care Reform Act could affect the demand for the company's healthcare products. the Traxtal acquisition has made Philips one of the leading solution providers for image-guided procedures. the acquisition of US-based InnerCool Therapies. one of the leading companies in body temperature management. treatment. 'tuck-in' businesses supports its growth initiatives. The company's acquisition of small and complementary businesses has enabled it to expand its healthcare business portfolio. has helped the company broaden its offerings in emergency care.

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

Earlier in November 2014. acquired Volcano Corporation (Volcano). and physiology. navigation systems. in April 2015. Volcano is one of the leading companies in intravascular imaging for coronary and peripheral applications. For instance. Opportunities Acquisition of Volcano may enhance the company’s customer base In February 2015. a US-based company engaged in developing. if the system had been powered on for over 12 hours. As stated by the company. Customers were asked to discontinue use and dispose of all Gel-E Donut gel pillow and Squishon 2 gel cushion products in their facility. This acquisition would create new sources of recurring revenue streams for the company. 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. the parent company of Philips Healthcare. Launch of new products may strengthen the company’s product portfolio Philips Healthcare © MarketLine Page 6 . 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. the system would no longer emit this signal. even if mold was not visible. It also offers a suite of peripheral therapeutic devices. However. 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. 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. Royal Philips. manufacturing and selling medical imaging devices for cardiovascular care and other specialties. the company recalled DigitalDiagnost System XRay designed to emit a beep upon termination of an exposure. 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.Volcano’s acquisition also complements Philips Healthcare’s portfolio of interventional X-ray and ultrasound imaging equipment. Such product recalls could affect the consumer confidence in the company's products and its brand image. In May 2015. This in turn would help Philips Healthcare in enhancing its customer base. Volcano offers physicians and their patients around the world with tools that aid diagnosis and guide and provide therapy.

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

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

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