5 firms fund network to fight medical costs

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Five major U.S. companies have joined forces to fund a medical electronic information network that is designed to combat the rising cost of health care.

"Health care costs have gotten as expensive as they can get," said Craig Barrett, chairman of Intel Corp. "They cannot continue to increase at two-to-three times inflation. This project will help us cap health care costs."

Applied Materials Inc., BP America Inc., Intel, Pitney Bowes Inc. and Wal-Mart Stores Inc. are each spending "seven figure" amounts to fund "Dossia," a Web-based framework for 2.5 million workers, dependents and retirees to keep their personal heath records.

The idea behind the effort is to cut health care costs for employers by avoiding such costly services as duplicative X-rays and medical errors as well as pre-empt chronic conditions with early diagnoses.

Health care costs make up 20 percent of the U.S. economy each year, or $2 trillion. For employers, health care costs have leveled off after years of double-digit percentage increases. According to the benefits consulting firm Towers Perrin, health care costs for employers have risen by 60 percent in the past five years.

The costs are just as significant for employees, whose health care premiums are continually rising by about 7 percent, which is more than twice as fast as workers' wages -- 3.8 percent -- and the 3.5 percent overall inflation rate, according to the annual survey of employer health benefits from the Kaiser Family Foundation.

President Bush has set a goal that all Americans have electronic health records by 2014. But there is disagreement on how to make that happen. Congress this year could not agree on legislation that would speed up the use of electronic record keeping.

The five companies are assuring employees that the Dossia database will be kept away from employers' eyes.

"The records will be the personal property of the individuals, not of the company or health insurance industry or some third party that wants to use it to make money," Mr. Barrett said. "It will be held by an independent, unbiased, not-for-profit corporation."

The nonprofit that has developed Dossia and will manage it is Omnimedix Institute, a company headquartered in Portland, Ore. The five companies will offer Dossia next year as a "trial" and hope the network catches on later in the year.

Employees can opt in or opt out of the system, which will allow them to gather their medical information from different sources including doctors and hospitals and choose which information is available for providers or family members to view.

Dossia will accept scanned input or manual input information with data from existing health records from pharmacies, doctors, hospitals and other providers. Patients will be able to update the record with information such as their family's health history.

Mike Critelli, chairman of Pitney Bowes, said it is impossible to quantify the potential savings, adding, "Any number we put out today will underestimate what this will do."