Microsoft, GE Pool Health IT Resources to Form New Company in Seattle

12/8/11Follow @xconomy

Microsoft and General Electric are mashing together some of their health IT business lines to create a new company in Seattle that will attempt to bring more efficiencies to the massively inefficient $2.6 trillion U.S. healthcare industry.

The new company, which doesn’t yet have a name, will be a 50/50 joint venture between Microsoft (NASDAQ: MSFT and GE (NYSE: GE), according to a Microsoft statement. Among other things, the new venture will bring Microsoft’s Amalga software, which is supposed to help various proprietary hospital software programs talk to one another, together with GE’s eHealth information exchange.

GE’s Michael J. Simpson will be the CEO of the new company, while Peter Neupert, the longtime head of Microsoft’s health operation, is retiring, according to a report in the New York Times. The new company will have about 750 employees recruited from Microsoft, GE and elsewhere, the Times said. While that may sound like a lot, Microsoft has said previously that its Health Solutions Group, the operation that oversees Amalga, HealthVault and other programs, has had a steady headcount of 750 to 800 employees for several years.

One interesting comment from the Times story, however, was about how Microsoft and GE say they want to reach beyond their walls to make more progress against some very tough healthcare IT problems. One of the issues the new venture plans to wrestle with is how to better track the health of individuals in real-time, but also that of entire patient populations of people with chronic conditions, like diabetes.

“It is the developer community that is going to solve these problems,” GE’s Simpson told the Times. “This is a big bet,” he said.

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