Fri, Dec 09, 2011 - Page 10 News List

GE, Microsoft team up to offer tools to cut healthcare costs

Bloomberg

General Electric Co (GE) and Microsoft Corp plan a joint venture combining electronic healthcare management and software systems that aim to reduce costs from errors and waste of as much as US$500 billion yearly in the US.

The venture, to be run by GE’s Michael Simpson, will have about 700 employees and combine Redmond, Washington-based Microsoft’s systems that use information for billing and patient privacy protocols with GE’s live hospital and patient data system, the companies said in a statement yesterday.

“The global healthcare industry really understands it needs to go after cost, quality and access,” Jan De Witte, who took over GE Healthcare’s information technology division in April, said in an interview. “[In the US] policies are pushing it that direction, and the same is going on in virtually every country in the world.”

The yet-to-be named venture, to be formed in the first half of next year, combines health information exchange and clinical products from GE, the world’s biggest maker of medical imaging and related information systems, and Microsoft’s health management software. Executives said they are seeking regulatory approval in the first half of next year.

GE Healthcare has estimated US$500 billion of the US$2.2 trillion spent on healthcare each year in the US is pegged on duplicate systems and bad coordination, based on US Centers for Medicare and Medicaid Services figures. A Thompson Reuters study in June said US$3.6 trillion could be saved by improvements over a decade.

The companies yesterday cited 1.7 million infections resulting in US$35 billion in excess cost and the loss of 100,000 lives as one area to target with their new products. Chronic disease management and billing system coordination are other potential uses.

The data needed to solve such problems would be developed in an open way, allowing any company to submit an application, and distributed through the venture, Peter Neupert, who runs the health strategy division at Microsoft, said in an interview. The companies didn’t provide a new market size for such tools in part, because it doesn’t exist just yet, he said.

“If you look at the payment models, or bundled payments, or risk-based payment — there’s no software category for that. But those people need tools in order to be able to manage and coordinate care across patients as a group,” Neupert said. “And those are the kind of tools that we can enable and we can build.”

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