Dr. G.E. Intel Will See You Now

General Electric and Intel have formed a joint venture to develop health IT products aimed at exploiting the lucrative and fast-growing chronic care market.

The as-yet-unnamed new company, announced this week, will be a 50-50 venture that builds on an alliance established last year to concentrate on solutions for helping with independent living and management of chronic disease:

Once formed, the new company will develop and market products, services and technologies that promote healthy, independent living at home and in assisted living communities around the world. It will focus on three major segments: chronic disease management, independent living and assistive technologies. GE Healthcare and Intel will contribute assets in remote patient monitoring, independent living concepts and assistive technologies, such as the Intel® Health Guide, Intel® Reader and GE Healthcare's QuietCare®.

Unlike interventions associated with episodic health problems, chronic care and independent-living solutions offer the allure of steady revenue streams. Think of a never-ending Lipitor prescription crossed with a monthly cable television bill.

"Chronic conditions account for more than 75 percent of health care spending in the U.S.," said Omar Ishrak, senior vice president of GE and CEO of GE Healthcare Systems, during a webcast of the announcement, according to Bloomberg Businessweek.

In terms of annual revenues, the new venture combines the corporate might of the fourth (GE) and 62nd largest (Intel) companies in the United States, according to Fortune magazine. GE is the leading maker of medical imaging machines, overuse of which has contributed to spiraling health care costs, according to many analysts.

As the sustainability of traditional health care delivery models declines and new health IT solutions proliferate, foreign and domestic companies are shifting strategies in hopes of sustaining profits.

"We must rethink models of care that go beyond hospital and clinic visits, to home and community-based care models that allow for prevention, early detection, behavior change and social support," said Paul Otellini, Intel's president and CEO. "The creation of this new company is aimed at accelerating just that."