Who Will Make the Digital Health System?

Friday, August 13th, 2010 by Max Baron

Until a few days ago, I was asking myself how Intel would transfer results of its research to system manufacturers. I was wondering about the strategy Intel might use to turn the Digital Health system into a real product that could sell to tens of millions of people. Will the company become a paid system IP provider in addition to its semiconductor business, or will it offer the accumulated system expertise free of charge just to generate more sockets for its processors? Intel’s strategy could indicate to us one way in which the company might transfer ideas coming from its freshly announced Interaction and Experience Research (IXR) group to potential OEMs.

The Digital Health system has not been totally dormant. It has seen some adoption although mainly abroad, but compared with products such as the desktop PC, or even the relatively new netbook, Digital Health has remained practically a prototype.

But, to go back to my question, it’s not just about who will fabricate and market the Digital Health system. There are other important details to learn such as who will develop the hardware and software and what will be the business strategy needed to equip the system with medical peripherals that can be deployed at home? These questions have remained unanswered until a few days ago when we learned at least one of the many possible answers.

Intel will transfer the development and marketing of the Digital Health system to . . . Intel and GE or more precisely to a separate company jointly owned by the two partners.

The joint announcement by the two companies answered some of the original questions but left most of the details to be communicated at a later time. We know for instance that the two partners will each provide 50% of the funding for the joint venture and we can assume that they will share profits in the same way. We know that the partnership has created a fully owned company. The two partners have not yet selected a name for the company but they have communicated that Louis Burns, V.P. and general manager of Intel’s Digital Health Group, will be CEO of the new company, and Omar Ishrak, senior V.P. of GE and president and CEO of GE’s Healthcare Systems, will be the chairman of the board.

The partnership seems to be a perfect match. General Electric has developed and continues to design health-care monitoring instrumentation but it needs a processor system to provide the required user-patient interface and the communication to the doctor at the clinic. Intel’s Digital Health system can provide the user-interface, the control and the communications but, it needs the additional medical peripherals that can turn it into a complete health care system.

The new company has evolved from an earlier alliance announced in 2009 according to which Intel and GE would invest $250 million over five years in marketing and developing home-based health technologies targeting seniors living independently and patients with chronic conditions to help manage their care from the comfort of their home.

The 2009 alliance, which had GE Healthcare sell and market the Intel Health Guide–a care management tool– has thus blossomed into a new well-funded startup and for good reason: at the time, according to a GE press release, Datamonitor reported that the market for US and Europe telehealth care was predicted to grow from $3 billion in 2009 to an estimated $7.7 billion by 2012.

I’m optimistically translating the forecast to imply that in 2012 the market will see shipments of approximately 6.16 million units priced at an average of $1,250 in the US and Europe. The worldwide number could come close to 10 million processors if we think in terms of chips—that’s not much for the semiconductor giant that sells hundreds of millions of chips annually—but very promising for an OEM business.

If the rapid growth of the health care at home market materializes as predicted one year ago, it will offer opportunities for more semiconductor companies such as Analog devices, Freescale, Microchip, Renesas, STMicroelectronics, Texas Instruments, and many others that can provide inexpensive microcontrollers, hybrid MCU/DSPs, AD and DA converters plus semiconductor transducers such as accelerometers, gyros, and capacitive, resistive, temperature and pressure sensors (reference: Embedded Processing Directory). According to a Q&A session held a few days ago, Intel and GE’s still-to-be-named company will develop all of the needed technologies internally including all of the needed hardware and software—a statement that if taken literally may involve hundreds of employee experts in different technical disciplines. However, we should not be surprised if some of the related work is contracted out to other companies.

Having learned the answers to a few macro questions, we should ask questions at the next level of detail: will the new system employ a standard operating system and if true, how will it keep up with the innumerable updates – security and bug fixes—that we see coming over the Internet today – irrespective of the operating system software vendor?

How will it protect the security of health-sensitive information? Who will be creating and maintaining the software needed to run on the medical clinic servers – software that needs to communicate with the patient, access the patient’s database, interface with the doctor, and even make some simple decisions by itself?

Will non -GE or -Intel makers of medical peripherals be supported by appropriate hardware and software open standards allowing them to extend and improve the system? Once the opportunity in remote health care is proven, which other manufacturers and alliances already looking at it now will compete with Intel and GE? Will the cellphone take advantage of the opportunity? Will Intel and GE also create a system that involves a cellphone?

The Digital Health system is an important innovation in health care that can improve the quality of life for millions of users and reduce the cost of delivering it. Its implementation will also provide a lesson in complex system design that combines analog and digital embedded peripherals with advanced user interfaces, PC-like execution applications, and Wi-Fi and Internet communication with advanced software running on servers.

Tags: , ,

Leave a Reply