Read the Conversation
EF: What word would you use to describe 2024, and what are your priorities for this year?
PF: I would use the word “productivity”. 2024 has been a challenging year for the healthcare sector. The market is still dealing with issues that originated from COVID, such as high demand and cost increases due to many different facts. Everyone is seeking productivity, making the market quite competitive. The healthcare sector needs to change, though we know this will take time. We're seeing a lot of consolidation in the market. Last year, there was little activity in mergers and acquisitions because there was not so much interest in them. This year, on the other hand, we are already seeing movements that reflect the drive for productivity. This combination of challenges and the need for productivity creates opportunities and M&A activity. Everyone now understands that sustainability is not achievable alone in this market; we need to combine efforts, both in the private and public sectors.
EF: How would you describe Philips's role in the transforming ecosystem?
PF: Philips is a company that focuses on innovation to positively impact people's lives, while providing systems and equipment to help our clients increase productivity, ensuring a better experience for healthcare professionals. To do this, we must understand the market and prepare our products accordingly. As they seek productivity and agility in the workflow, we must offer software solutions that enable interoperability among the hospitals and that alleviate the routine pressure of the clinical team, as we have seen an increase in cases of burnout, especially in radiology, which is among the areas that suffer most from this syndrome, according to a 2023 Medscape survey. Health leaders are still on alert with the increase in waiting times and delays caused by the shortage of the workforce in the treatment of patients. Therefore, extracting valuable insights from vast amounts of data could have the potential to revolutionize healthcare systems; with consolidation, large groups are integrating many hospitals and clinics, and to increase productivity, they need systems to manage these facilities effectively, and our role is to deliver systems that assist in this integration. If our products can help them connect and extract consolidated, organized data, they can better understand their issues and create policies to improve productivity and enable more efficient use of resources, transforming complex information into easily understandable data. For instance, we have new software for our magnetic resonance equipment that speeds up exams, without losing high image quality, helping clients achieve their timeline goals, in addition to supporting professionals in medical diagnosis with confidence. This is one way we are working to support our clients, patients and staff needs.
Looking at the Brazilian market, if we want to reach the entire population, we need to consider those in remote areas. Selling the most advanced systems in big cities like São Paulo is not enough; we are developing products that can reach remote areas as well and address the lack of access to healthcare in these parts of the country. For example, our mobile ultrasound can assist mothers and pregnant women in these remote regions. We need portable products that can help, not just high-tech solutions for big cities.
Additionally, we are considering the impact of natural disasters. These are ongoing challenges, and we must develop products like telehealth and telemedicine to support these situations. In summary, our focus is on advanced technology for major urban centers and practical, portable and mobile solutions for remote areas.
EF: How would you rate the acceptance by hospitals of these new technologies and solutions, and what work needs to be done to speed up their adoption?
PF: According to the Future Health Index 2023, a study carried out by Philips, healthcare leaders in Brazil indicated, for example, Artificial Intelligence as a tool to drive improvements in operational efficiency, integration of diagnoses and care itself. Furthermore, digital technologies, such as connected solutions outside the hospital as telemedicine (67%), were the most common option to address labor shortages. In general, CTOs and C-level executives want technology because they understand it will bring productivity and gains. However, physicians need more convincing as they see technology as something they must adapt to. When developing a new algorithm to speed up exams, physicians should be involved in its development in order to gain their trust and endorsement.
In Brazil, there is now a regulation for software designed to be used in medical devices, and as an example, our EMR (electronic medical records) system, Tasy, is registered before ANVISA as a medical device, which provides clients and hospitals with confidence in our solutions. We also comply with privacy legislation, ensuring our solutions offer the highest level of security possible. With 133 years in the market and celebrating our 100th anniversary this year in Brazil, clients trust that we offer the best quality and security.
EF: What Philips portfolio items are in the most demand at the moment?
PF: We are involved in every stage of a person's health journey. After the pandemic, there has been a significant increase in health consciousness on all levels. People are more careful and monitoring their health closely. Apart from our high-tech medical devices and software focused on patients, professionals and healthcare institutions, we also have our personal care division, such as the beauty line for men and women; oral care, and also the brand focused on mothers and babies, Philips Avent.
Our technology-focused portfolio includes diagnostic and prevention devices, which are designed to offer the best experience for healthcare professionals and users, as well as patients. It includes magnetic resonance, computed tomography scanners, ultrasound and hemodynamic equipment, which offer high image quality and agility in all procedures. In addition, we have patient monitoring solutions, a market-leading line.
We also focus on IT systems, such as Tasy EMR and PACS, a cloud-enabled enterprise imaging platform acquired from Carestream in 2019. This year, a new addition to our Enterprise Informatics portfolio is the Capsule device, which enables interoperability, monitoring and clinical surveillance of devices, which is a multivendor solution, which is currently in demand.
There is a great demand for sustainable solutions, after all, we not only need to take care of patients and healthcare professionals but also our planet. In this sense, I highlight our pioneering BlueSeal technology, present in our MR equipment, which uses only 7 litres of helium while conventional ones use 1,500 litres - which consequently reduces its weight by up to 900kg. Helium is a noble and scarce gas in the world, and essential for imaging devices. In addition to the sustainable benefits, customers do not need to worry about losing or refilling helium, as the gas is sealed and does not escape from the magnet, reducing unexpected costs with it.
In addition, we have the Lumify portable ultrasound for remote areas that connects to mobile phones or tablets, and you are able to carry it in a backpack. Our telehealth and teleultrasound solutions allow doctors to send images directly to hospitals in large cities, allowing specialists located anywhere in Brazil or another country to view the generated images in real time for guidance for an accurate diagnostic, significantly speeding up access to specialized care. This technology is crucial for critical situations, such as pregnancy complications, where timely intervention can be lifesaving. In the future, we foresee remote surgeries where a local physician can collaborate with a specialist from a major city like São Paulo. Brazil's vast geography poses a unique challenge: Bahia is the size of France, São Paulo is the size of the UK, and Rio de Janeiro is the size of Norway. Despite these challenges, our resilience and high-performing solutions help us overcome the distance.
EF: What is Brazil's importance to Philips at a global level?
PF: Brazil's size certainly presents a significant opportunity for Philips; as the fifth largest country in the world, Brazil is crucial for us. A second, and very important point, is the fact that Brazil has an important investment in health. While there's debate about the level of investment, Brazil dedicates around 9,7% of its GDP to public healthcare - according to the most recent data released by IBGE (Brazilian Institute of Geography and Statistics) - which is substantial. The key to capitalising on this opportunity is to invest more efficiently, and this is where technology plays a vital role. For example, an organized public sector enables the development of targeted policies for specific regions, leading to better healthcare investment.
In addition to our corporate office, we have two units in Brazil, one of which is in Blumenau, focusing on software development and the birthplace of Tasy EMR. This is the only EMR in Philips' global portfolio, highlighting the importance of Brazil for us. All research development and maintenance of this software takes place in Brazil, demonstrating the country's intelligence and expertise. We also have our factory in Varginha, an important hub for the development of our circular economy line.
In summary, Brazil's vast size, significant investment in health, and exceptional talent are key reasons Philips remains committed to this market.
EF: What is your opinion on the role that advanced technology, such as AI, will have on the healthcare landscape in Brazil?
PF: According to the study carry by us, Future Health Index 2023, 79% of Brazilian leaders are investing in at least one AI technology (the global average was 59%), positioning Brazil among the four main markets focused on this innovation. Currently, 31% invest in AI to optimize operational efficiency, surpassing the global average, which was just 19%.
Saying that our focus for AI should be on enhancing productivity and allowing physicians to concentrate more on what they care about the most: the patient. For instance, we are developing a new feature for Tasy, the AI Assistant, an AI-driven system that can record conversations between patients and physicians, extracting and organizing the information. The system summarizes in an organized and clear way symptoms, allergies and potential illnesses. This assists the physician, who will review and confirm the organized data. This innovation allows physicians to focus on their patients rather than writing notes. Previously, patients often felt that physicians were more focused on their computers. With AI Assistant and the new hands-free experience of Tasy, physicians can spend more time with their patients while documenting necessary information for future reference and legal protection. This feature ultimately increases efficiency and safety, letting physicians dedicate their time to examinations and patient interaction.
EF: Why is one dollar invested in Brazilian diagnostics and medical technology worth more than in other countries?
PF: When defending my business case, I emphasize several key points about our operations in Brazil. Firstly, Brazil offers a substantial opportunity due to its size and diverse market dynamics. We strategically invest in both the public and private sectors, allowing us to adapt to market fluctuations effectively. While the public sector provides stability, we also capitalize on the agility and potential gains of the private sector. Additionally, Brazil is undergoing significant reforms, including tax reforms to enhance competitiveness. Despite initial concerns about the tax framework, these reforms are expected to streamline operations and create a more favorable business environment. The sector has made great progress on this topic, and the implementation will benefit Brazil and, consequently, our operations in Brazil.
Furthermore, Brazil boasts a pool of talented professionals offering competitive expertise at an attractive price when compared to other global markets. This talent pool is essential for our innovation and growth strategies. In summary, Brazil presents a compelling opportunity for us with its size, structured public sector, ongoing reforms, and availability of skilled talent. Our balanced approach between the public and private sectors, supported by favorable tax reforms and a talented workforce, positions us well for sustainable growth and success in the Brazilian market.
EF: At the upcoming 100th anniversary of Philips’ presence in Brazil, when you raise your glass, what message would you like to give your colleagues, women in pharma, fellow leaders, and our readers?
PF: Philips is a company that carries innovation and the aspiration for transformation in its DNA, reinventing itself and making a positive impact on people’s lives. Being active for a century reflects our commitment to the market and all our stakeholders, as well as reliability. When we celebrate 100 years, it signifies that people can trust us for the long term. We have a strong brand and sustainably run operations, and we're committed to remaining competitive and relevant for another century or more. Our message is clear: we are sustainable, innovative, and adaptable to change. By maintaining this energy and adaptability, we can ensure our future presence in the market. I believe that adaptation and continuous learning will allow us to sustain our position in Brazil.
