One of the greatest American conglomerates, General Electric, recently announced its plan to separate the company’s healthcare division into a new, standalone company that will be a pure play healthcare outfit, within the next two to three years. With more flexibility approaching its way, GE Healthcare aspires to deliver more personalized, effective, and precise patient outcomes in future. GE Healthcare will now be independently investing in healthcare innovations, in addition to quickly reacting to the industry’s ongoing evolution.

Operationally, the new entity will come into effect in about 12 to 18 months, according to John Flannery, CEO and Chairman, General Electric. While GE has planned the monetization of nearly 20% of its interest in GE Healthcare, the rest 80% will possibly be distributed among GE’s shareholders during the next 12 to 18 months, till the spinoff is accomplished.

Kieran Murphy – CEO and president of GE’s healthcare division – will continue his position in GE Healthcare, according to sources. “As we enter a new chapter, we look forward to cater to a strong customer demand, especially with precision health solutions,” says Murphy. Moreover, he highlights that GE is already an industry leader in the global healthcare sector with an expanded outreach and driven by cutting-edge technology. Life Sciences will undoubtedly be a key division of GE Healthcare, he adds.

GE’s healthcare practice currently provides a wide range of products and services to customers across 140 countries, and the offerings include technologies such as medical imaging and monitoring, cell therapy, and bio-manufacturing. The company leverages the most of its data analytics, digital, and artificial intelligence (AI) capabilities. GE’s within-state operations involve medical imaging business units such as PET scanners, MRI machines, CT scanners, ultrasound devices, bedside monitors, and NICU equipment such as incubators. Separating from the parent company will enable GE Healthcare to deliver improved clinical, operational, and patient outcomes.  

Some industry experts predict that this spinoff is likely to positively impact the consolidation landscape in the medical devices and healthcare tools sector. Moreover, the healthcare investment community has welcomed GE Healthcare as its new, sizeable asset. On the flipside, some of the recognized stock market indices hint a potential negative effect of this spinoff on the company’s cash flow and overall profitability.

It will be too early to define the exact ramifications of this reorganization and analyze its impact on the industry in the long run. However, looking at General Electric’s track record in the past, industry stalwarts are but hopeful that this split-off could be the start of a new paradigm in the global healthcare sector.