GE Healthcare Study Quantifies Economic Impact of Madison Operation

GE Healthcare has had a significant presence in Madison, WI, since 2003, when it bought Datex-Ohmeda, a company that traced its local roots to the opening of an Ohio Medical Products manufacturing facility in 1946.

Today there are 630 people working at GE Healthcare’s 200,000-square-foot facility on the outskirts of Madison, the U.S. hub for the company’s life care solutions business. The Madison operation makes up nearly one-tenth of GE Healthcare’s Wisconsin employee base of 6,500, most of them concentrated in the Milwaukee area.

Madison employees develop and manufacture anesthesia delivery systems and respiratory equipment that gets shipped to 196 countries. Their research is part of GE’s effort to remain on the cutting edge, where it’s managed to stay for well over a century, developing the first light bulb, the first jet engine in the U.S., and the first MRI machines, to name three innovations.

But GE Healthcare has stayed relatively quiet in Madison over the past decade, and it’s been hard to gauge the part the facility plays in the state’s economy.

Yesterday, GE tried to rectify that. It opened the facility’s doors to government officials, business leaders, and the media for the presentation of a study showing that GE Healthcare’s Madison business has a $341.9 million impact on the economy each year. That includes $200.4 million in direct spending by GE and $141.5 million in spending by its suppliers, its employees, and its employees’ households.

For every GE Healthcare employee in Madison, another 1.8 jobs are created in Wisconsin, meaning the local operation directly or indirectly supports nearly 1,780 jobs statewide, according to the report by Pittsburgh-based healthcare consulting firm Tripp Umbach.

In addition, the study showed that GE Healthcare spends $12.4 million annually with Dane County suppliers, and the company’s presence there adds nearly $12 million to the local and state tax rolls each year.

“This study quantifies GE Healthcare’s considerable footprint in Madison as an employer and economic catalyst in the area,” said Neal Sandy, chief marketing officer for GE Healthcare’s life care solutions business. “It emphasizes the truly significant impact GE has locally and globally, as products made in Madison are exported and put to work in emergency rooms, intensive care units, and operating rooms worldwide.”

Those products are designed and developed in Madison, too. GE Healthcare spends more than $1 billion on R&D annually, Sandy said. He declined to say how much his division spends on R&D each year, but he said the Madison staff—which includes 150 engineers—is working hard to come up with new products and features.

“We continue to innovate [at GE], and this facility is part of that,” Sandy said.

Recent products developed at the Madison facility include ecoFLOW, released last year, Sandy said. The software can be integrated with GE’s Avance CS2 anesthesia delivery machine. It provides a digital display for better tracking of oxygen flow and the amount of anesthetic agent consumed in real-time, helping clinicians more efficiently dispatch the anesthesia—which can save hospitals money, Sandy said.

The future of innovation in anesthesia and respiratory devices, like so many other sectors, will be driven by software, Sandy said.

Anesthesia technology has gone from a completely pneumatic system—operated by pressured gas—to fully electronic-controlled devices, Sandy said, like GE Healthcare’s Aisys CS2.

That shift requires hiring more software engineers, who make up 20 of GE’s group of 150 Madison engineers, spokesman Ben Fox said.

GE Healthcare innovation will also be driven by the needs of emerging markets like Africa and India, where the business intends to deliver lower-cost products that still feature sophisticated technology, Sandy said.

“This is the challenge we’re embarking on,” Sandy said.

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