Products come, go, and become obsolete in an increasingly shorter period of time. Technologies change quickly. In a 130-year-old company like Philips, these transformation cycles are constant. But they were never as challenging as they are now. The company founded in 1831, in Eindhoven, Holland, has followed this dynamic and quickly changed its business vision with a view to the future. When Frans van Houten took over the role of global CEO in April 2011, he determined that the company should focus fully on healthcare. The lines of televisions, lighting, small appliances and home accessories, which made the brand’s fame in recent decades, were sold, leaving only a few licensing contracts. Until 2016, Philips was dedicated to hardware, in resonance equipment, tomography, ultrasound and monitors aimed at the medical field. And in the last two years, it accelerated the process of changing the key, now from hardware to software. During this period, it made about 20 acquisitions of companies in this segment. And, in Brazil, a pillar of the global strategy, it intends to double the number of specialists – from 800 to 1,600 – by 2023, at the Software Development and Operations Center in Blumenau, which works as a hub for Latin America. “Era was once an industry and now it is a service. We are migrating to SaaS [Software as a Service] and have a long-term relationship with customers”, said Patricia Frossard, President of Philips in Brazil. “For that, I can’t sell more boxes. When we talk about putting software, it is the heart of the institution. It’s more than marriage, it’s a child. Because marriage can be divorced, the child is forever.”
The change in the main business line aims to change the source of revenue and thus make the company’s finances sustainable. While equipment sales guarantee large revenue in the short term, software contracts guarantee robust and recurring sales. In 2020, Philips had revenues of 19.5 billion euros, with a net profit of 1.195 billion euros. The segment with the largest share in sales is in the diagnostics and treatment division, with 8.175 billion euros, which corresponds to 41.8% of total revenue. Earnings with software are in this division and are around 20% of the overall billed. The expectation is that, with investments in the segment, revenue from software will exceed half of the revenue in five years.
Brazil has a great contribution in this process. This is where Philips’ flagship management software, Tasy, is developed and improved. The tool entered the company’s portfolio after the purchase of the company from Santa Catarina, Wheb Sistemas, in 2011. It undergoes constant improvement, with the inclusion of solutions and updates. Today it runs on 1,300 customers in the country and is being sold in countries like Germany, Japan and the Dominican Republic. “It is a global movement of the company and in the area of hospital management, Brazil is a protagonist”, said Patricia Frossard.
With the introduction of software dedicated to hospital administration, technology starts to act at the heart of healthcare units. The solution is more than an electronic medical record. In addition to being used by physicians in appointments and storing patient history, it organizes pharmacy supplies, billing and generates insights from data analysis for managers to make better decisions. “With better management, there is less waste and, consequently, less costs”, said the executive at Philips, stressing that the ease of use by the doctor is essential for the success of the program. “If not, he’s still using an Excel spreadsheet.”
AGILITY AND INTELLIGENCE
At the end of the process, patient care is improved. And the moment we spent with the Covid-19 pandemic made people’s vision for their health exponential, in a movement that plays in favor of Philips’ plan, according to Rafael Kenji, CEO of Feluma Ventures, a corporate venture builder that develops solutions innovative solutions aimed at the areas of health and education. “Value-based medicine, with the patient as the focus of care, proved to be advantageous not only for the patient, who has better quality follow-up, but also for hospitals and healthcare facilities, as it reduces costs and improves processes.” The specialist also mentions that, with the improvement of the patient experience, the increase in the quality of services and the reduction of costs, the so-called Triple Aim, an integrated healthcare model created by the Institute for Healthcare Improvement, of the
U.S. “With this evolution in equipment and technology, it is possible to have images that are increasingly real and detailed, as well as faster and safer data analysis.”
This is what Grupo H. Olhos, from São Paulo, sought after adopting the Philips Tasy solution, through Digisystem, for process management, electronic medical records and integration between the company’s areas. The tool allows the institution to centralize and connect all points of care with patients, speed up diagnoses, reduce – or even eliminate – human errors and improve its financial and administrative activities.
The use of software in hospitals has opened up an important field for Philips. Clients have entered a virtuous cycle with improved management, as they begin to have the ambition to carry out larger projects, which were often stuck due to lack of funds or lack of organization. It is in this environment that the use of artificial intelligence has advanced, especially in the field of intelligent diagnostics. The Dutch company’s recently launched solution is the Digital Pathology Suite, which increases diagnostic confidence and streamlines laboratory workflows. Slide scanners cross information from exam images and pinpoint the diagnosis with greater precision, which obviously has a medical professional’s last analysis.
Philips, through its foundation, was a partner in this year’s Sertões Rally, in which it put into practice its services, both in hardware – which will not leave the Dutch company’s portfolio, as well as audio, video and home appliance products – how much software. While cars, motorcycles, quadricycles and UTVs braved the inhospitable terrain of the interior cities of Goiás, Ceará and Maranhão, in August, medical teams carried out consultations and examinations in the needy communities of the localities. The company donated fetal and maternal monitors, cardiographs, vital signs monitors and portable ultrasounds. The institution also offered new software that made it possible to identify risks in prenatal care, receive remote diagnostic assistance and assess the progress of patients. The solution was connected to mobile ultrasound, which works in a backpack with a battery powered by sunlight, which ensured mobility for the healthcare professional and facilitated meeting with pregnant women in places of difficult access. There were also calls through a telemedicine platform.
ENLARGEMENT
PUBLIC With a paved road to accelerate towards potential customers of private health networks, the challenge for Philips is to advance in contracts with the public sector. “There are accessible technologies that improve patient care and bring efficiency and productivity gains for the government as well,” said Patricia Frossard. “There is political will, but we need double speed.”
One of the projects that Philips implemented with the government in Brazil has been in Bahia, since 2015, through a Public-Private Partnership (PPP) in which the companies Alliar and Fidi also participated. Twelve health diagnostic units in the state received equipment and software to perform and manage radiology, mammography, tomography and magnetic resonance imaging services. In the first year alone, 183,000 exams were performed, a 44% increase in capacity compared to the previous year. “We are in contact with authorities to replicate this project in other states,” said the president of Philips’ Brazilian operation.
These are projects and solutions for public and private networks that meet the results of the Future Health Index 2021 report, carried out by Philips on the digitalization scenario of the health sector in Brazil. According to the study, 84% of the main industry leaders invest in electronic records and 61% in telemedicine. Another important insight points out that 60% would like artificial intelligence to be implemented in their institutions for greater efficiency and diagnostics integration. Among the trends, an increase in home care is expected over the next three years. These are pillars that guide Philips in its new lighted path, now not by light bulbs, but by technology.
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