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WSJ:  November 2004:  Medical Administration Moves Further Into The Digital Age 

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The Wall Street Journal  

November 22, 2004

 

GE Wins Key Health-Care Contract

IT Systems Gain Showcase
In Deal With England
Valued Over $200 Million

By KATHRYN KRANHOLD
Staff Reporter of THE WALL STREET JOURNAL
November 22, 2004; Page B5

General Electric Co. won a key contract to provide digital-imaging systems to more than 70 English hospitals and clinics as part of the country's unprecedented $18 billion project to wire its health-care system.

GE's award, valued at more than $200 million over eight years, is notable in that it allows the company to showcase its information-technology systems at a time when the health-care industry world-wide is seeking to move into the modern age of digital technology.

In the U.S., a number of politicians, including President Bush, have been calling on health-care providers to deploy information technology to reduce medical errors and improve efficiency. But U.S. health-care providers have been slow to adopt new systems largely because it is expensive and the return on the investment hasn't been evident. Adoption of information technology, however, is inevitable. The various systems look to eliminate hand-written medical orders and prescriptions that contribute to errors and call on physicians and health practitioners to enter their orders into a computer directly.

England's National Health Service, which announced its project nearly a year ago, has already awarded billions of dollars in contracts to begin establishing a digital system in which its 50 million people will have an electronic medical record that could be accessed anywhere within the nation. England and its contractors hope the system will be a model for other countries. (For now, the plan applies only to England; the health systems in Scotland and Wales are run separately.)

Numerous technology companies have been aggressively bidding for a piece of England's project, including Perot Systems Corp., Cerner Corp., and International Business Machines Corp. Accenture Ltd. has already been awarded two major contracts valued at nearly $4 billion.

A consortium led by Japan's Fujitsu Services, which is overseeing the network in southern England, selected GE, based in Fairfield, Conn., as its provider of the picture-archiving and communications system known as PACS. The consortium also includes IDX Systems Corp., PricewaterhouseCoopers, Tata Consultancy Services and BT Group PLC. The group is providing technology that will serve 20 million people, in Britain's largest health-care region.

"We see this as a great way of getting in on the ground," said Sir William Castell, a GE vice chairman and GE Healthcare's chief executive. "The rest of the world is watching what is happening in the United Kingdom to learn from it and digitalize as well."

In the past couple of years, GE has acquired dozens of information-technology companies as it aggressively entered the health-care information-technology market. Its information-technology business is expected to contribute about $2.5 billion in sales to GE Healthcare's $14 billion in revenue for 2004.

Write to Kathryn Kranhold at kathryn.kranhold@wsj.com1

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