By Kim Jae-kyoung
South Korea has talented doctors and many advanced medical centers but the country should overhaul its healthcare system for more sustainable services, according to the chief executive of the global healthcare company operating here.
In a recent interview with Business Focus, Laurent Rotival, president and CEO of GE Healthcare Korea, said that Korea should revamp its healthcare system to reflect the rapidly-changing environment.
“Due to the aging society and increasing chronic diseases, we are expecting an increase in the Korea healthcare market. Not only an increase in market size, but also the transformation of the healthcare system in Korea, would be a big opportunity for us,” he said.
“Since the current system is not sustainable with high costs, disparate quality, and lack of access, Korea needs to transform its healthcare system,” he added. “Our Connected Corea Strategy would help Korea tackle the challenges as one of the remedies.”
The new strategy, which will be officially announced in November, is the firm’s initiative designed to help more Koreans get better medical services at lower costs by building a network with hospitals and avoiding redundant checks and examinations.
Rotival, who took charge of the Seoul office in January, said that Korea is the perfect place for healthcare production, and an R&D base. GE selected Korea as its largest production center.
“Korea has an excellent infrastructure, experienced engineers, reliable local suppliers, and advanced medical institutions. We have ideal conditions to have Ultrasound R&D and a manufacturing center in Korea. We will continue to expand investment in Korea because of a proven experience of success,” he said.
The 45-year-old CEO said that GE Healthcare is now focusing on its healthcare business to bring another change to the world. The firm has stepped up efforts to strengthen its “healthymagination” initiative under which GE and its venture partners will invest to fund ideas that improve disease treatment, particularly cancer detection.
Rotival, who joined GE in 1995, said that it is a strategic move that can bring better health for more people at a lower cost.
“GE’s healthymagination is our six year, $6 billion investment in developing and providing products and solutions. We launched it in 2009 globally, and so far we have introduced more than 40 validated products, and it has touched 234 million lives so far,”said Rotival.
“It is a game changer as a strategy to revolutionize the world’s healthcare by focusing on high costs, disparate quality and inadequate access. We have transformed ourselves from a product or technology-driven company to a patient and customer-focused company with healthymagination,” he added.
In September, the company reported plans to spend $1 billion over the next five years to expand advanced cancer diagnostic and molecular imaging. The $1 billion is part of the $6 billion for its healthymagination campaign.
GE Ultrasound Korea (GEUK), its Ultrasound R&D and manufacturing center in Seongnam, was established in 1984, and started research and development of ultrasound systems in 1994. In 2009, it exported products worth more than $80 million to more than 100 countries in the world, about 95 percent of the total production volume in the Seongnam center.
“It means we are not only selling the products in Korea as a foreign company, but also we are developing, manufacturing, and selling the products globally as one of the local companies in Korea,” he added.
The following is an excerpt from the interview.
A: We have two major investments which are about product development and manufacturing in Korea for the world. One is GEUK, and the other one is the GE Global U-Health R&D center at Songdo.
The GE Global U-Health R&D Center, established in the Incheon Free Economic Zone (IFEZ), is focusing on developments of healthcare IT. In 2009, GE announced its plans to invest 49.5 billion won over the next five years into the R&D Center in Korea with a co-investment from the Korean government.
A: At a human level, the Korean population as a whole has a passion for education. And as I look at my employees and at the market for talent, it is very impressive. And as I compare the availability of very qualified talent in Korea, I would say Korea is unique, well positioned in that respect.
I think the other advantage of Korea is this tremendous focus that the country and large corporations have on technology. We look for countries where we can not only sell but also be partners.
I think the other aspect of the Korean market is that it has a very high proportion of clinical research and clinically leading medical institutions. The Korean market is the third largest healthcare market in Asia. It is probably the market in Asia that is investing the most aggressively in advanced technology to do advanced research.
A: First of all, I’m very impressed. There are other regions in the world that are trying that, such as Singapore and Thailand. I think Korea has an exceptional opportunity to be successful.
To attract patients from outside Korea, you need one fundamental thing. You need great healthcare. You need great doctors; you need great infrastructure; and you need a great reputation.
I think Korea has done a great job capitalizing on the investment they have made for the last 30 years in technology and reputation. There is a competition but Korea has a real chance to be successful.
A: We as a company have benefited from significant incentives. We are very grateful for that. I think though Korea can be difficult place to do business, particularly due to some very significant rapidly evolving regulatory involvement. To attract non Korean investments, or foreign direct investments, you need to have a tremendous commitment to compliance and a very reliable and predictable legal system and the rule of law.
The danger is of course as you move fast to continue to raise the bar on creating a fair and open competitive environments, you can make it very difficult for a non-Korean company to understand how to navigate and to understand it, and it takes a great deal of expertise.