Intel Speaks Truth To Healthcare (Plus, Video On Their $250-Million Alliance With GE)

April 19, 2009

5 Min Read

My latest video takes you behind the scenes at Intel's announcement of its $250-million healthcare alliance with GE. But what interested me even more than the launch product (a monitoring system for seniors) was the bold language by Intel CEO Paul Otellini and GE chairman Jeff Immelt, neither of whom minced words in saying the U.S. healthcare system is broken.I've never heard a U.S. business executive speak as bluntly as Otellini, who right at the start of the press conference got up and said: "Staggering costs of healthcare are bankrupting families, they're crippling businesses, and they're dragging down the economy."

In the old days, he might've been pelted for such talk. But tough economic times call for fresh thinking. From the standpoint of the tech sector, the healthcare crisis could just turn out to be the biggest business opportunity to come along in decades. There are two reasons here. First is the planned $21-billion in U.S. government stimulus for healthcare IT.

Second is the growing political consensus to fix the domestic health insurance system. When you have conservatives like Mitt Romney -- who implemented innovative insurance legislation in Massachusetts when he was Governor -- you know this realization stretches across the aisle.

And to that the growing restlessness of American big business, which can no longer sustain the big hit it's taking, as compared to foreign competitors. Think about the $1,500 added to the cost of each GM car, because of the expense of providing healthcare to GM employees and retirees.

Here's how Otellini summed up the situation:

"We are at an inflection point in healthcare in this country, and potentially globally. We've got an economy in crisis, we've all had a front-row seat watching the debate over the stimulus package, budgets, and how to best position the nation for the future. Healthcare is an increasingly major factor in that debate.

Staggering costs of healthcare are bankrupting families, they're crippling businesses, and they're dragging down the economy. Healthcare costs in the United States doubled from '96 to 2006. Nearly 46 million Americans today are uninsured. We've heard that number before, but not many people realized that one in five working adults is also uninsured.

American businesses are losing their ability to compete in the global marketplace, with employer-sponsored health insurance premiums more than doubling in the last nine years. And with unemployment rising, more people will be without insurance, putting more families' personal finances at risk, and further straining the healthcare system.

If that's not enough, in 15 to 20 years the whole U.S. budget is likely to become untenable, simply due to the rising cost associated with healthcare. . ."

Otellini and Immelt, who spoke next, segued into talking about their alliance, which will have a front-row seat as the U.S. grapples with health, and e-health, reform. They showed off the launch product -- Intel's Health Guide, which is aimed at supporting the delivery of healthcare to senior citizens living with chronic conditions. Intel demonstrated off -- and I've got those demos in my video -- the user terminal device, the nurse's station, and a nifty "Facebook for seniors" webpad.

Frankly, while the Health Guide is interesting, I was disappointed that Intel and GE didn't delve more into the healthcare IT aspect of the alliance. (Probably the thinking was that hardware you can touch is more accessible than talking about boring, electronic medical records.)

That IT aspect is significant because you're not only talking U.S. stimulus-based spending. There are huge worldwide opportunities. Interestingly, many European markets will constitute riper immediate pickings, because their single-payer models mean easier navigation for vendors. For example, in England you just have to get the U.K.'s National Health Service (NHS) to buy in, rather than 50 states and dozens of insurers. (Indeed, Intel said its Health Guide -- I know, this is a care product, not IT; still -- is in trials in England, which if successful could potentially lead to an NHS deal.)

As GE chairman Immelt put it during the press conference: "Paul [Otellini] and I wouldn't do anything that we didn't think would be a multibillion-dollar business over time."

Hey, If Paul Otellini and Jeff Immelt are stepping up to the plate, it's not "socialism" to talk about fixing the U.S. healthcare system. It's simply good business. Good, solid, American capitalist business.

Here's the video:

P.S. The one thing I didn't talk is the rumblings of opposition by many physicians to electronic medical records. On the plus side, there is recognition that e-records would aid tracking medications when a patient moves amongst doctors. However, there's also fear that cookie-cutter forms would further cut into the already time-constrained interactions between doctor and patient, and that a centralized bureaucracy would dictate tests and care decisions based on what's entered into the computer. A post for another day.

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