Philips CEO says AI could make American health care affordable and solve the staffing crisis

Jakobs was tapped to lead the company turnaround, replacing Philips’s previous CEO, Frans van Houten. In an interview with Fortune, Jakobs shared his plan (or “compass”) for the company, which pulled in some $19 billion in revenue last year, and his thoughts on the future of AI in the health care industry.  

The following has been condensed and lightly edited for clarity.

I saw that Philips recently teamed up with Mayo Clinic to use AI technology for MRI scans of the heart. Tell me about your AI strategy moving forward.

We see a huge pressure on the gap between the rise in demand [for better health care] and the availability to address that demand. That’s on one hand the staff shortages, but also financial constraints, and we see technology as an important way to counter that.

What you see in this partnership [with Mayo Clinic] is rallying around a very specific goal, in this case, MR imaging. It is the gold standard in imaging, but it has a few disadvantages. One is it takes a long time because the scanning is so precise and data-heavy that for a cardiac scan, on average, it takes 60 minutes for a patient. It’s very intrusive for a patient, and the load and the pressure on imaging is going up significantly. So we have set this joint goal of how can we significantly reduce the time? We already achieved a breakthrough in working with a different system in the Netherlands, where we came up with a smart speed algorithm that increases the scan speed by three times. So that actually means we already can reduce the cardiac MRI scan from 60 minutes to 30 minutes.

How?

It’s a combination of how you regenerate your images. Traditionally the time was bound by the physics of the equipment, of the magnet, but now combining it with the speed and power of AI, you can regenerate the images and the pictures in a different way. That’s actually where you can speed it up. That’s where you can push the boundaries of the combination of hard and software technology moving forward to develop the next generation of it.

The other thing that I think is very exciting is that the other limiting factor of the MRI technology was that it had to use helium to cool the system because it was rotating at such high speed you needed to cool it. Helium of course has some risks, so you always need to position the MRI in the basement of a hospital because it needs a quench pipe, so in an emergency you can let the helium go out from the basement and there’s no danger to the patient and environment. But now we have an helium-free MRI, which actually sets the MRI free. So you can take the MRI across any hospital floor; you can take it outside of the hospital, which we’ve never done before. Now you can take it close to patients.

What you now see coming is development in the Alzheimer’s space with new drugs, which is very exciting in terms of how we can treat Alzheimer’s in a different way. But it requires new imaging. You’ll need to have four images a year if you want to continue with your drug treatment, and it has a very specific protocol. If you think about where Alzheimer’s patients are, many are in elderly homes. So instead of bringing all the patients into a hospital, you can now put an MRI on a truck, bring it to an elderly home or actually put an MRI in an elderly home because now you can do it safely.

So that’s where you combine the technology breakthroughs, both the physics side and the hardware side, as well as the software and AI side. And then you get to new ways of treatment. That’s why I think it’s such an exciting time for AI in health care, because you have a real meaningful contribution and something that’s working here and now.

Do you think that this new tech could help lessen the consumer pricing burden, as many patients face hefty out-of-pocket fees for imaging and other tests?

Yes. That’s your advantage when you go helium-free because you don’t have the cost of helium. The medical industry was using 30% of all helium globally, so massive usage, high cost. Secondly, this is half of the weight. So the energy consumption is half of what a normal MRI is. Then your total cost of ownership is $400,000 less on an MRI on an acquisition price of $1.2 million to $1.5 million. So it’s substantial. So you can also reduce the cost per, because that’s the other part of the affordability side where we are looking at what we can do to address that [issue], also with the help of AI.

You can make the workflow more efficient, and therefore you can get more over its lifetime. But also you don’t need to always buy a new MRI. You can do an upgrade with a software package and then get much more value out of it. And that should also help to bring the cost of imaging, and especially MR imaging, down.

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You’ve said that you’re always looking at the next frontier of health care tech. As you know, AI is evolving at such a rapid clip. How do you have that foresight to look 10 years ahead? What conversations are you having now?

So the example that I just gave, that’s really reimagining imaging. Before imaging, you had to go to a hospital and it took this amount of time. Now, you can think of 10 years from now, we should have imaging with the patient so that you can scan them where they are and have teleradiology helping you from a distance.

You pull the data over the cloud because you have the cloud infrastructure behind it where you can do rapid processing of the data. So then you can do rapid interpretation. That’s a completely different care-delivery system than you’re thinking of. So we’re thinking of the problems of the here and now, but applying technology in a really disruptive manner.

Health care is very load-imbalanced, as I call it, which means that 90% of the health care load is in the hospital. That is not the most efficient way of delivering health care. We need to get it out of the hospital, but we need to have the infrastructure to do it. And not only the infrastructure, but you need to have the financial structure to support it and the regulatory system.

I always talk about if you want to change health care in a systemic way, you need to have these four forces coming together at scale. Because if you have the clinical practice willing to adopt new ways of working, if you have the technology that can support it, but then you also have the financial and regulatory system, then you can go. If you have only two of those, but financially it is not supported, why are we struggling massively with population health and prevention? Because that’s where the financial system is still not working. The government or bigger systems are not willing to pay for prevention, and the population as a result suffers from it. We could start much earlier, which would be much better in terms of screening, diagnosing, and preventing disease from happening.

Of course. But no matter how great your tech is, there is that reality of the current payment environment, and who knows what will happen with the U.S. health system under a new administration next year. So what are the pressures you’re seeing or feeling that could curb your growth?

I think the biggest challenge for health care is the lack of staff, because we currently see systems cannot cope. So why are waiting times there? Most of the time, ’s because people just don’t have the staff to do the procedures. We have cath labs that are empty because they don’t have techs to support a procedure. Radiologists are a dying species.

Ultimately, of course, money plays a role, but we also need to make it more efficient. I think the real limitation is the people. That is not only the doctor, it’s very much also the nurse and technician, because if you cannot do the preparations, there’s nothing to be done. So we need to digitize it rapidly. We need to make sure we can operate it remotely.

So I’ve been focusing more on, okay, how can we deliver affordable care? How do we drive workflow productivity up? How can we actually take the burden off the caregivers so they get time back to spend time on what they really love to do, which is spending time with patients, doing complex readings instead of doing all these routine readings. The admin and red-tape burden in health care is still very significant, and that is what is burning people out. It’s not necessarily about the amount of patients, but a nurse on average spends 20 minutes an hour just on admin tasks.

So then how do you reskill and upskill these health care professionals to use this new tech?

That’s what we are focusing on a lot. Can you simplify tech so it can be done by a layman? When we talk about the mobile solution of the MR or CT scan, what you can do is put a technician in a truck, that is a truck driver—not a radiologist—and you send them to an elderly home. They can do the scanning; the radiologist is reading it from a distance. You can also have a tech helping, because if this is a lower-skilled person, he can maybe not do the most advanced kind of protocols of, for example, cardiac reading, but you have a specialized tech that can do it from your main hub. That is the future, where you have simpler stations out there. The same with ultrasound. You have the latest ultrasound AI that we released that has reduced it from 20 clicks to four, so that actually people can do it with much less education.

It’s lower cost, because it takes the burden off the higher-value activities that the highly specialized people do. So I think that is where you can rethink the system and do it in a very different way that actually helps us to deliver care in a different manner.

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Are there any learnings you’re going to take from that first Trump presidency and bring it into how you’re approaching the next four years?

What is important, and I think that’s for any government and administration we deal with, is you need to be clear on what you’re trying to achieve together. I think you have an objective: How should health care look in the U.S.? Where do we see the pain points, and how can we contribute to solving that? Now you want to marry that with the administration’s goals, but they have their own agenda. We are not influencing that. That’s something that they’re elected for, and then they determine it. But we need to respond to that.

So if they change certain things, we need to be agile to respond to that. That is the theme that you see everywhere. China is changing, we need to adapt to that new reality. North America can be changing, we need to adapt to that. But there are certain global disease trends that are universal that we need to deal with across all countries, across all administrations. And we need to remain focused on the problems that we can solve that actually are not administration dependent. There might be things that are also administration dependent, but if we drive affordability up, if we drive that kind of productivity up, if we make the patient experience better, those are things that for me are independent of red or blue. Health care is the focus.

You had to rebuild so much trust when you started, thanks to a reputation-damaging $1 billion CPAP machine recall. How are you looking at rebuilding the brand and rebuilding trust? Do you have any specific advice you could give to leaders who may find themselves in a similar situation?

I’ve been going around a lot to engage with people at all levels and factories. And I really like that, first of all, to listen and then to share. I normally don’t have an agenda. I call it the CEO check-in or kind of just a Q&A. I also said I will not use slides anymore when I talk. When I use slides, I talk to the slides, and I become much more scripted. You lose your authenticity. 

Can you walk us through an average day in your life as CEO?

The beauty of a CEO’s day is there’s no equal day.

Do you have any routines?

Yeah, I do have routines. I like my sports. Normally I really like to be outside. Then you get some fresh ideas. So I like to run. I actually, to be honest, also like to do it with my employees. So it’s another thing that really has generated a lot of traction. When I go out and visit countries, I do a run or I do a soccer game, and they love it.

I want to have a proper breakfast, good lunch, and a good dinner. I think I’ve been very passionate about the notion of time. What I realized when I came into my role is one of my biggest enemies will probably become time, because everybody wants your time. You need to be very deliberate on how you spend your time.

What do you mean by that?

What I mean is it needs to be a reflection of my plan. I actually look back every quarter with my secretary to say, okay, how did I spend my time? And actually, did I stay true to what I believe I should?

And the other thing that I said when I became CEO is the job is really important. I’m privileged to do it, but I want to start it with my family, and I want to end it with my family. And I’ve always been very clear about that. So I make sure I spend quality time. So holidays, for example, for me are important to recharge, and that’s the moment that [my family is] back together. So we’ll always make sure that in the summer I take a break. Now I really look forward to going skiing. And that is really the ultimate combination of being back together: grounded, family time, quality time.