GE HealthCare is looking to stake its claim as radiology emerges as a key area poised to benefit from artificial intelligence.
The medical device company was spun off from parent GE in January 2023. In the year since, it has rolled out products, made multiple AI-focused acquisitions and invested in research and development to try and take the lead on AI-enabled radiology care.
In reporting its first year of earnings as an independent company Tuesday, GE HealthCare said annual net income fell almost 18%. However, revenue increased 5% for the fourth quarter and 7% for the year.
The company predicted 2024 organic revenue growth of 4%, saying conversations with customers pointed to improving provider margins and greater spending on the products and services GE HealthCare sells.
"We achieved or exceeded our financial and operational objectives we laid out at the beginning of the year," CEO Peter Arduini told analysts on the earnings call. "And we’re making significant progress on the innovation front, including digital and artificial intelligence launches.”
Wall Street liked what it heard. The stock closed at $81.96 per share Tuesday, up nearly 11% from Monday's close.
GE HealthCare said it invested $1.2 billion in research and development last year.
In September, it announced a partnership with Boston-based Mass General Brigham to co-develop an AI algorithm predicting late arrivals and other missed care. Also, the company is selling a deep learning software product to customers of its physical devices that can sharpen image quality for MRI, CT and PET images. GE HealthCare markets the software as a way for providers to extend the life of older devices.
On Tuesday's call, Arduini said the company was developing and selling a software subscription service that would help providers manage imaging software from different technology vendors.
Acquisitions also are playing a role in its growth. Last month, GE HealthCare announced plans to acquire medical imaging AI company MIM Software for an undisclosed amount. It plans to fold MIM’s imaging analytics and digital workflow capabilities into its precision medicine offerings.
And in February 2023, it acquired Caption Health, a software company focused on AI-assisted ultrasound scans. The company plans to use Caption Health’s AI to integrate real-time guidance into ultrasound systems for clinicians and non-expert users to capture better quality images of the heart.
“When it comes to AI, we are not separating an AI-specific research and development budget—you see AI in every single thing that we do,” Taha Kass-Hout, GE HealthCare's chief technology officer, said in an interview. “It is not like something we sprinkle on top, or something that is totally separate.”
A number of experts say AI could be a remedy to mounting challenges experienced by radiologists, such as staff shortages and the increasing number of images clinicians need to process.
Alex Lennox-Miller, lead analyst for healthcare information technology at research firm CB Insights, said GE HealthCare’s size gives it an advantage as imaging vendors try to integrate their products into one offering.
“They're going to have a big advantage just because they're going to have the pocketbook to jump into the pool with both feet if they really want to,” Lennox-Miller said.
Aaron Miri, chief digital and information officer at Jacksonville, Florida-based Baptist Health, has seen this approach from other large imaging companies.
“I do believe that it is a loyalty and it's a brand stickiness play,” Miri said. “That platform becomes a sticking factor. If I'm using their platform to derive answers, see patients and deliver patient care, I am a lot less likely to switch [vendors].”
It remains too early to tell which of the large imaging vendors—which also include Siemens and Phillips—will ultimately succeed in winning customers.
Lennox-Miller said it will likely come down to which company is embraced by providers. "If [companies] want to maintain their lead in the medical hardware category, they have to be integrating all of this new software and new technology,” he said. “It’s not enough to sell an MRI.”