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: HealthBlawg

Microsoft GE Healthcare joint venture - A sign of weakness or strength?

By David Harlow

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Microsoft and GE Healthcare announced a joint venture yesterday(as-yet unnamed), trumpeted as bringing together the best of both companies' offerings in the health care provider market. (More from the NY Times.) Late in the day, I spoke withBrandon Savage, Chief Medical Officer at GE Healthcare, andNate McLemore, General Manager of Microsoft Health Solutions Group. They had a great deal to say about the companies' shared vision of the use of platform technology to enable care teams to deliver the right decision at the right time, noting that their core products complement each other rather than overlap.

The centerpiece of the collaboration will be an amalgamation (so to speak) of the two companies' strengths around Amalga (the Microsoft product) and Qualibria (the GE product). Brandon and Nate described the challenges facing these products thus: Qualibria needs to be able to pull in data from multiple sources better (Microsoft can help), and Amalga needs to be able to share best practices across sites better (GE can help).

Put another way (to quote John Moore at Chilmark Research), Amalga is "more a toolset than a product." McLemore acknowledged that provider organizations need to make a substantial investment in customization in order to realize benefits from using Amalga, and noted that one of the keys to the synergy with GE is that GE can build the applications needed to unlock the value from Amalga for customers who can't or won't do it themselves. While there have been some providers that have walked away from Amalga, there are some notable success stories (e.g. New York Presbyterian's dramatic reduction in DVT thanks to information extracted and interventions facilitated by Amalga's analytical tools). (We should note that there a number of products that carry or have carried the Amalga brand; one of them, Amalga HIS, was sold to Orion Health in a deal that should close soon.)

Qualibria (the GE Healthcare product) is a tool to capture and disseminate medical knowledge and clinical decision rules developed by leading health systems and/or by individual client institutions (see further explanation of Qualibriaa little more than halfway through the linked post).

Savage and McLemore emphasized that their current focus is on population health -- Amalga and Qualibria both allow health care providers to manage populations of patients based on the aggregate date crunched by the two systems. They also focused on the openness of the products they are building -- even though one might think of GE Healthcare as a "legacy" or "big iron" EHR vendor -- and emphasized the ability of legacy EHR vendors to integrate EHR assets in place with the analytics and clinical decision support provided by Amalga and Qualibria.

The scope of the joint venture announced raises two potential regulatory concerns:

  • First, there may be antitrust regulatory review needed before the transaction can proceed.

This is not GE Healthcare's first joint venture. GE's joint venture with Intel -- kicked off about a year ago -- by contrast, is more focused on the patient, on the individual receiving home health services, and on the hardware that could be left in a patient's home and transmit data to the patient's health care providers, as needed.

It seems a little odd that Microsoft HealthVault is remaining at Microsoft rather than being moved into the new venture, particularly since Microsoft was, within the past year, talking up the integration of HealthVault and Amalga. It remains to be seen whether HealthVault will follow the Google Health PHR into oblivion. Peter Neupert, who has headed up Microsoft's Health Solutions Group, will be retiring from GE, and will consult to the new entity on a part-time basis.

This seems like the end of an era at Microsoft, with a division whose core product was acquired from an entrepreneurial hospital group about six years back. As GE Healthcare folks would say, it looks like another case of "reverse innovation" -- except this time, instead of looking for reverse innovation from GE Healthcare technologies in developing countries, GE and Microsoft are hoping to do in a smaller setting what they have been unable to do in their corporate home settings. As the CEO of the GE-Intel joint venture said recently: "My instructions are to drive the bus as if I stole it." The new bus sounds like it will be driven by GE Healthcare, with a payload of Microsoft HSG IP in an engineering environment driven by Microsoft culture. We'll have to wait and see whether and when it arrives at its final destination.

David Harlow
The Harlow Group LLC
Health Care Law and Consulting

Full post as published by HealthBlawg on December 09, 2011 (boomark / email).

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