General Electric and Intel are creating a 50/50 joint venture to develop and market home-based healthcare technologies, the two companies announced Monday.
The yet-unnamed venture will combine the assets of GE Healthcare's Home Health division and Intel's Digital Health Group, and will be based near Sacramento, Calif. Terms of the deal were not disclosed, though the companies say the venture is an outgrowth of an alliance they formed in April 2009, for which they pledged a total of $250 million over a five-year period to commercialize home-health devices.
Louis Burns, who heads the Intel division, will serve as CEO, while Omar Ishrak, current CEO of GE's Healthcare Systems Group, will be chairman of the joint venture. The new company will focus on three market segments: chronic disease management, independent living and assistive technologies.
"GE and Intel share a common vision to use technology to bring more effective healthcare into millions of homes and to improve the lives of seniors and people with chronic conditions. With the dramatic increase of people living with chronic conditions, and a global aging population, there is a need to find new models of healthcare delivery and extend care to the home and other residential settings," the two companies said in a press release.
Ishrak acknowledged that lack of insurance reimbursement has been a hurdle to greater growth in home monitoring, but predicted strong consumer demand for these sorts of technologies. "Independent streams of revenue we think will fund this market as it grows," Ishrak said, according to the Wall Street Journal. He said consumers will be willing to pay for certain the services, then put pressure on insurance companies and government to expand coverage.
For more:
- check out this Silicon Valley/San Jose Business Journal story
- take a look at this Wall Street Journal story
- read this joint Intel/GE Healthcare press release