‘We have to be much closer to our cus­tomers’

Modern Healthcare - - Q & A -

The move­ment from vol­ume to value is a global phe­nom­e­non, ac­cord­ing to Dr. Jan Kim­pen, chief med­i­cal of­fi­cer of Royal Philips in the Nether­lands. The for­mer chair­man of Univer­sity Med­i­cal Cen­ter Utrecht joined the com­pany shortly after it shed its light­ing di­vi­sion to be­come a pure healthcare tech­nol­ogy provider. Dur­ing the re­cent Ra­di­o­log­i­cal So­ci­ety of North America trade show in Chicago, he spoke with Mod­ern Healthcare re­porter Adam Ruben­fire about the changes un­der­way in healthcare and at his new em­ployer. The fol­low­ing is an edited tran­script.

Mod­ern Healthcare: What’s it like a year into the job?

Dr. Jan Kim­pen: I have been work­ing in healthcare for all my life, be­ing a pe­di­a­tri­cian for 25 years and an ex­ec­u­tive of a large univer­sity med­i­cal cen­ter. I have seen healthcare chang­ing from within and now, look­ing at it from the cor­po­rate world. I am very much aware that in­dus­try has to trans­form in or­der to meet the chal­lenges of this chang­ing land­scape.

My join­ing Philips was not an ac­ci­dent. I saw they were split­ting the com­pany in two to be­come a pure play health tech­nol­ogy com­pany, which cre­ates enor­mous pres­sure to be re­spon­sive to what doc­tors, pa­tients and cus­tomers want. I wanted to be part of that, to be the voice of the cus­tomer, to bring the out­side-in per­spec­tive, and to add cred­i­bil­ity to the com­pany as a health tech­nol­ogy com­pany.

MH: What does it mean for Philips to be a pure healthcare com­pany?

Kim­pen: It means that we have to be much closer to our cus­tomers, who are healthcare providers, hospi­tals, in­sti­tu­tions, doc­tors. But we also have to be much closer to pa­tients. We have to un­der­stand their needs. The world is chang­ing.

If we keep do­ing healthcare as we have been do­ing for decades, ba­si­cally on a vol­ume ba­sis, it will not be sus­tain­able. So we will have to trans­form the com­pany. We can’t just remain the box-sell­ing com­pany that we have al­ways been.

We will have to part­ner with providers and cus­tomers, and pa­tients and doc­tors, to un­der­stand real well their un­met needs and to come up with more in­te­grated solutions. That’s what they want. They don’t want to buy that CT scan­ner in a box with a ser­vice con­tract and hear, “See you after seven years.”

They want to talk with us about what they need, and they want a so­lu­tion con­sist­ing of smart de­vices, soft­ware and ser­vices all con­nected. That’s the new re­la­tion­ship that we will have to build with our cus­tomers, and that’s the main trans­for­ma­tion that Philips is go­ing through now.

MH: Philips has bol­stered its healthcare con­sult­ing of­fer­ings in the past cou­ple years with the launch of Ra­di­ol­ogy Solutions and the acquisition of the emer­gency depart­ment con­sult­ing firm. You’re not the only de­vice maker in­volved in con­sult­ing.

Kim­pen: No.

MH: What role do you see that busi­ness hav­ing in the fu­ture for Philips and in the broader de­vice-maker in­dus­try?

Kim­pen: I believe that it will be the same story for all the de­vice com­pa­nies. But for Philips it means that in or­der to un­der­stand the cus­tomer bet­ter, you need to have peo­ple at our side of the ta­ble that can speak the same lan­guage.

If you don’t un­der­stand what the other party is say­ing, it is much more dif­fi­cult to come to solutions that the cus­tomer needs. Some­times I meet with Csuite cus­tomers where doc­tors are lead­ing the or­ga­ni­za­tion. If you come in as a doc­tor, it is im­me­di­ately as if the ice is thaw­ing. You use the same lan­guage, you’re on the same page. You can much bet­ter un­der­stand the other side of the ta­ble.

We also have peo­ple in de­sign, spe­cial­ists in work­flow, in build­ing ar­chi­tec­ture, in emer­gency care. It helps us to make this con­nec­tion with the cus­tomer in or­der to come to these in­te­grated solutions. Con­sul­tancy will be part of the game.

MH: As a con­sul­tant, though, you’re look­ing at providers’ costs; yet you’re not nec­es­sar­ily bring­ing down the cost of your prod­uct. Is there any at­tempt to look at Philips’ own cost to cre­ate its prod­ucts and to make its prod­ucts cheaper?

Kim­pen: The cus­tomer is in­creas­ingly be­ing re­im­bursed on value. Val­ue­based healthcare is ba­si­cally bet­ter care at lower costs. And if we want to be part­ner­ing with our cus­tomers, we will have to

“If we keep do­ing healthcare as we have been do­ing for decades, ba­si­cally on a vol­ume ba­sis, it will not be sus­tain­able.”

keep that in mind.

We will be look­ing at the re­quest, the needs of the cus­tomer. We will have to come up with a so­lu­tion that serves him best in price and is a long-term so­lu­tion. For the provider, cheaper isn’t nec­es­sar­ily all these cap­i­tal de­vel­op­ments year after year, nor is that a so­lu­tion to de­liv­er­ing bet­ter care to his pa­tients. It’s not a prod­uct we are sell­ing any­more. We are tak­ing a long-term view of their prob­lem and hav­ing also a long-term, in­stall­ment-based re­im­burse­ment for that.

MH: You’ve formed part­ner­ships with providers and other man­u­fac­tur­ers on mar­ket­ing and de­vel­op­ment. How have these deals in­flu­enced the com­pany and the science be­hind your prod­ucts?

Kim­pen: The eas­i­est part is the science be­hind the prod­ucts. If you are build­ing a so­lu­tion for ra­di­a­tion on­col­ogy, for ex­am­ple, what you want and what the cus­tomer wants is an end-to-end so­lu­tion. They don’t want to fig­ure out for them­selves which com­po­nents they need to buy from you. So we are of­fer­ing a range of tech­nolo­gies, some we pro­vide and some we ob­tain from part­ners.

We can­not do this by our­selves, so we need other ven­dors, other part­ners, to col­lab­o­rate. And then, of course, there’s the busi­ness is­sue. How are you go­ing to di­vide the rev­enue? That’s some­thing we have to ne­go­ti­ate.

Another ex­am­ple is if we are do­ing a long-term, mul­ti­year, man­aged equip­ment ser­vice for a hos­pi­tal. It is our goal to de­liver the whole so­lu­tion. Now, we don’t have every­thing in that whole so­lu­tion, so once in a while—some­times it’s 10% or 20% of the whole so­lu­tion—there are prod­ucts, or ser­vices or soft­ware from other com­pa­nies. We fit them into our end-to-end so­lu­tion, and we make the deal to­gether with these com­pa­nies or to­gether with the provider, who pays part of it to us and to them. So it’s ab­so­lutely nec­es­sary not only to part­ner with the provider but also to part­ner with all the ven­dors sim­ply be­cause we can­not de­liver every­thing.

MH: What does the chang­ing po­lit­i­cal en­vi­ron­ment in the U.S. mean for your com­pany and your pa­tients?

Kim­pen: We don’t voice an opin­ion on demo­cratic elec­tions. We work with the gov­ern­ment that is in place.

On the other hand, we believe that the par­a­digm shift from vol­ume to value is not go­ing to be de­pen­dent on elec­tions. It’s there and it’s there to stay. The val­ue­based healthcare that is part of Oba­macare will remain. Some things will change, of course. But it’s not go­ing to dis­ap­pear com­pletely.

MH: Where is Philips headed in terms of in­no­va­tions?

Kim­pen: We will try to en­hance di­ag­nos­tics and to connect ra­di­ol­ogy to im­proved pa­tient ex­pe­ri­ence. For in­stance, we have de­vel­oped a sys­tem to au­to­mat­i­cally do TB screen­ing of the lungs. With data an­a­lyt­ics, we can screen large num­bers of peo­ple who come for TB checks. We can make it much eas­ier for doc­tors. It’s like an artist’s im­pres­sion that we’re us­ing now. Every doc­tor looks at an X-ray and says, “Oh, I think it’s TB” or not, based on their own past knowl­edge.

Now we can make this much sharper, data-driven and much more se­cure. That’s still a re­search pro­ject. Prob­a­bly you will see that in a com­mer­cial form some­where in the near fu­ture.

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