The Software giant, Microsoft is an experienced player, when we talk about health-care. Here is just an addition to their said qualification. General Electric Co. and Microsoft Corp. are planning a joint venture, which would combine electronic health-care management and software systems. They will focus their energies on reducing costs from errors and waste of as much as $500 billion yearly in the U.S.
The resources combined for the venture will be run by GE’s Michael Simpson, with around 700 employees, along with Redmond-based Microsoft’s systems that use information for billing and patient privacy protocols with GE’s live hospital and patient-data system. This was noted as per a statement made by the companies on Wednesday.
Jan De Witte, who heads GE Healthcare’s information-technology division said, “The global health-care industry really understands it needs to go after cost, quality and access.” It was even quoted that in the U.S., “policies are pushing it that direction. And the same is going on in virtually every country in the world.”
The venture is yet-to-be named, but the venturers announced that it would be formed in the first half of next year, which will combine 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. GE Healthcare, based outside London, provided $16.9 billion of the parent company’s $150.2 billion in sales last year. The executives however said that they were aiming to get in with regulatory approval in the first half of 2012.
Talking about the loss estimation, GE Healthcare noted that according to them, an estimate of $500 billion of the $2.2 trillion spent on health care each year in the U.S. is pegged on duplicate systems and bad coordination. These figures were on the basis of the U.S. Centers for Medicare and Medicaid Services figures. In June, another study was made by Thompson Reuters, which noted that $3.6 trillion could be saved by improvements over a decade.
Peter Neupert, who runs the health strategy division at Microsoft, said in an interview that 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. He even said that the companies didn’t provide a new market size for such tools in part, because it doesn’t exist just yet.
In his words, “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.” He added, “And those are the kind of tools that we can enable and we can build.”
Currently, the companies cited 1.7 million infections, which result in a notable loss of $35 billion, as excess cost and the loss of 100,000 lives as one area to target with their new products.
So, it seems like the scope for improvement is there and hopefully the duo will help in reducing the costs in the times to come.