Siemens combines innovation and IT to foster medical solutions

April 11, 2001

Siemens Medical has been hard at work this past year, repackaging itself as a “solutions” provider, and combining innovation and clinical know-how into a kind of technocorporate gestalt. For a company rooted deeply in engineering, this is no

Siemens Medical has been hard at work this past year, repackaging itself as a “solutions” provider, and combining innovation and clinical know-how into a kind of technocorporate gestalt. For a company rooted deeply in engineering, this is no small task. Siemens has had to look outward as well as inward at the processes that rule medical practice and at those that give rise to diagnostic and therapeutic equipment.

Internal processes are being tweaked to make the company more efficient, more sensitive to changes in the marketplace, and more adept at responding to them. This sensitivity has led to the development of new products, some that promise to change clinical workflow and others that reflect changes already happening. In both cases the goal is the same-to improve the practice of medicine and in so doing, of course, increase the company’s market share and financial bottom line.

Rather than providing single components, as the company and most of its competitors have long done, Siemens has put in place a strategy by which diagnosis and therapy are combined. The bridge joining the two is information technology. The transfer of diagnostic data and their integration into therapeutic regimen is the currency supporting this approach.

While the imaging community tends to view Siemens in terms of familiar radiology products, the German company is much broader, with product offerings in anesthesia, patient monitoring, urology, oncology, and IT. Over the last five years, Siemens has aggressively reshaped itself to take advantage of these multiple offerings. Corporate leaders have sought to transform the company from an organization based on function to one driven by process. Information technology is being groomed for roles inside the hospital and beyond. Siemens is hatching a plan in which its products become an integral part of the home, transferring data about the recuperating patient over the Internet to physicians in remote locations.

The goal is nothing less than addressing every step in the management of a patient from the moment of injury or illness to the point of complete rehabilitation. The intent is to provide “solutions,” a term derided as overused. But Siemens wants-no, expects-to be taken seriously.

“We would like to be the most successful solution provider,” said Erich R. Reinhardt, chair of group executive management for what was formerly called the Medical Engineering Group of Siemens. “This is supported by the fact that we are changing our name from Medical Engineering to Siemens Medical Solutions.”

The company has made a concerted effort to understand clinical processes and to shape new technologies accordingly, Reinhardt said. In some instances, the clinical processes themselves are bent to accommodate the equipment. Siemens’ development of digital x-ray equipment, for example, seeks to improve efficiency through the capture of digital data and the transmittal of those data to workstations. Siemens is hardly alone in its efforts, as digital x-ray may be one of the most crowded areas of diagnostic imaging, but its approach signals a willingness to find more effective ways of working, even if they break some of the norms of medical practice. The Vertix FD system is a general-purpose product that supports general radiography and chest imaging.

“The result will be better if you adapt the workflow to the new technologies, but this very much depends on the healthcare providers being interested,” Reinhardt said. “When they are, we have a big opportunity to improve efficiency, which means improving quality of care and optimizing expenses through the use of highly innovative technologies combined with IT.”

Siemens is not blindly dedicated to changing the practice of medicine, however. Sometimes innovation means reinventing technologies to better fit the existing workflow. E.CAM is an example. The gamma camera was reengineered from the bottom up with an open gantry, height-adjusting table, and automatic detector setup, all of which improve patient prep and, consequently, reduce exam time (SCAN, 06/5/96).

“From a conceptual point of view, we are very broad,” Reinhardt said. “This is a requirement if you are interested in offering solutions.”

Siemens is trying to tune its R&D efforts into different clinical environments. The practice of medicine in a tertiary-care hospital differs markedly from that of a community hospital. In the past, companies tended to deconfigure product platforms, decreasing price and performance on a sliding scale from high-end, high-volume users to those on the bottom rungs of the provider ladder. At the high end of CT, for example, most competitors have offerings similar to those of Siemens-multislice scanners built from sophisticated components, churning out mountains of patient data. At the low end is the single-slice scanner. Siemens engineers, in contrast, have built a high-value, low-cost scanner specifically for the low-volume user.

The system, CT Smile, has a modular design, allowing owners to swap out parts that need replacement under the guidance of a “do-it-yourself” instructional CD (SCAN, 01/17/01). The system, which goes for $245,000, is sold over the Internet, an approach that minimizes sales costs. Primary customers are those on tight budgets, including small community hospitals and physicians in private practice, as well as hospital departments other than radiology, such as ICU, ER, or ear, nose, and throat. Coming up with such a product required the participation of prospective customers in the design process.

“They are involved at a very early phase,” Reinhardt said.

Like many companies, Siemens has been caught up in merger mania. But rather than buying simply for market share or product expansion, Siemens has been strategically picking its quarry. Two standouts, Shared Medical Systems and Acuson, exemplify the company’s philosophy of aggressively pursuing technologies that allow the integration of varied products and services. Acuson’s forte, ultrasound, will play an increasingly important role in medical practice in the future, according to Reinhardt. Healthcare IT and networking services, picked up with Shared Medical, are the means for connecting the multiple nodes in diagnosis and therapy.

These two acquisitions may be the most notable, but they were not the first nor will they be the last. In addition, shares of Siemens began trading on the New York Stock Exchange on March 10.

“This provides us with additional currency to facilitate acquisitions and strategic investments-when we find the right ones,” Reinhardt said. “All the time we are evaluating. We decide each and every case individually.”