Intel and GE will combine health-IT assets to form a company that focuses on providing medical care technologies to the elderly and people with chronic illnesses, the companies announced on Monday.
Health care faces a growing challenge as people live longer and care costs rise, said Omar Ishrak, senior vice president of GE and president and CEO of GE Healthcare Systems. Chronic illness, already a major health care cost, presents additional issues, he said.
"Chronic conditions account for more than 75 percent of health care spending in the U.S.," Ishrak said during a webcast of the announcement.
The new company will "tackle chronic diseases and age-related disease," said Ishrak, who will serve as the company's chairman.
Both companies are already involved in the health care market. GE Healthcare offers consulting and sells medical devices in areas that include cardiology and oncology. Intel launched its Digital Health Group in 2005 to look into uses for its products in health care research and personal health care.
The new company, which doesn't yet have a name, will combine the assets of GE Healthcare's Home Health division and Intel's Digital Health Group. The venture builds on an alliance that GE and Intel formed in April 2009 around independent living and chronic disease management. The new company will focus on chronic disease management, independent living and assistive technologies.
Intel and GE will each own half of the new venture, which is expected to launch by the end of the year. Financial details were not provided. The venture will be based in the Sacramento, California, area, and Intel's Louis Burns, currently vice president and general manager of Intel's Digital Health Group, will serve as CEO of the new company.
"We already have products for home monitoring from the alliance," Burns said. "The best way to bring products and solutions to market was to form the company."
Intel's research in disease management and GE's work in the area of home health will comprise the venture's key components, Ishrak said.
The venture will emphasize developing products that allow people to receive treatments in their homes, according to Burns and Ishrak.
"Bringing health care to the home is one of the fundamental pillars of lowering health care costs around the world," Israk said.
Burns said that the company will develop products that will permit seniors "to live at home in dignity."
While both executives discussed the technology that their respective companies will bring to the new venture, Ishrak and Burns acknowledged that IT can only do so much to improve health care.
"Many of the problems that exist we have technical solutions for," Burns said. The biggest challenge, he said, is getting the health care industry, which is slow to change, to adopt new business models.
Ishrak cited a change in how medical treatments are paid for as necessary if health care technologies are to prove effective.
"The business model change, the payment reform change that is associated with that, that will take some time," he said.