GE and Intel have agreed to merge their home health assets to form a new 50/50 joint venture. The as yet unnamed new company, which will focus on telehealth and independent living, will be made up of GE Healthcare's Home Health division and Intel's Digital Health Group. The new company will focus on three segments: chronic disease management, independent living and assistive technologies. Some of the relevant assets moving to the new JV include Intel Health Guide, Intel Reader and GE Healthcare's QuietCare. The new company plans to develop and market new products, services and technologies, too.
Louis Burns, the current vice president and general manager of Intel’s Digital Health Group, will be CEO of the new company, while Omar Ishrak, senior vice president of GE and president and CEO, GE Healthcare Systems, will be chairman of the company's board. The headquarters will be near Sacramento, California.
"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 company's wrote in a joint statement.
During a recent webcast that discussed the details of the deal, Burns said that the new company would be "more agile out from under both parent" companies, according to a report over at Telecare Aware. Ishrak also predicted that the new company would bring a "business model change" to the current offerings, although existing customers would still find support from the new company.
The spin-off comes more than a year after GE and Intel formed a home health partnership and committed some $250 million to jointly researching and developing home health technologies. Last April, Intel and GE announced they would work together to market home-health monitoring solutions leveraging wireless sensors that aim to prevent falls, increase medication compliance and treat sleep apnea. As part of that deal, GE Healthcare said it would sell and market the Intel Health Guide. A few months later, in December, GE acquired Living Independently Group, which created QuietCare, an infrared sensor system that monitors seniors activity throughout the day and sends alerts to caregivers if seniors appear to need assistance. GE had already previously invested in the company, but the acquisition brought the product in-house. According to this week's release, QuietCare was the key product offering that GE contributed to the new JV.
As of last April, Intel and GE predicted that the home-health monitoring market would grow to $7.7 billion by 2012, which means it would more than double from last year's $3 billion home-health monitoring market.
UPDATE: Analyst and consultant Laurie Orlov has some worthwhile commentary about the new JV over at Aging in Place Technology Watch:
The surprise to those who have been associated with telehealth and remote monitoring is how long these products have been around -- telehealth devices have been in the market for a decade or more -- and how very limited the uptake has been by doctors, hospital administrators, home health companies, those who serve seniors and those with chronic disease. Tangled up in the resistance to change, business model/process intransigence and much-ballyhooed lack of reimbursement -- are the products themselves. The joint venture has the chance to market the current but also invent or acquire the new. Form factors and price points must shrink to consumer-tolerable levels and the pace of matching products-to-need must accelerate. The joint venture has an opportunity to use their plethora of research studies, scan the market of startups and aggressively acquire. And the presence of a company (versus departments within large companies) that has GE and Intel backing both validates the inexorable trend towards tech-enabled care in the home -- and should energize large players like Philips as well as encourage startups. Here's hoping! (More)
For more, read the GE-Intel press release here
Also, be sure to check out Telecare Aware's insights into the deal (lots of good background)