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Semiconductor industry

Five Major US Companies Join Forces to Combat Rising Health Care Costs

Strategic Insights

— 1 min read

A coalition of five major U.S. companies is launching a medical electronic information network, Dossia, to combat the rising cost of health care. Health care costs have reached unsustainable levels, with 20% of the US economy dedicated to this sector annually. The companies aim to reduce health care costs by avoiding duplicative services, medical errors, and pre-empting chronic conditions through early diagnoses.

Key Takeaways:

  • Five major US companies - Applied Materials, BP America, Intel, Pitney Bowes, and Wal-Mart - are collaborating to fund Dossia, a web-based framework for 2.5 million workers, dependents, and retirees to manage their personal health records.
  • The Dossia initiative seeks to reduce health care costs for employers by 60% over the past five years, and for employees by avoiding costly services such as duplicative X-rays and medical errors.
  • Health care costs make up 20% of the US economy annually, equivalent to $2 trillion.
  • Employee health care premiums have risen by 7% annually, compared to 3.8% for worker wages and 3.5% overall inflation.
  • President Bush has set a goal for all Americans to have electronic health records by 2014, but there is disagreement on how to achieve this.
  • The Dossia database will be maintained by the independent, not-for-profit Omnimedix Institute.
  • Employees will have control over their personal health information, which will be kept separate from employer eyes.
  • Dossia will accept scanned and manual input from various sources, including pharmacies, doctors, and hospitals.
  • The five companies will offer Dossia as a "trial" next year, with the aim of expanding the network later.

Statistics:

  • 20% of the US economy is dedicated to health care costs annually ($2 trillion).
  • Health care costs for employers have risen by 60% in the past five years.
  • Employee health care premiums have increased by 7% annually.
  • Worker wages have risen by 3.8% annually.
  • Overall inflation rate is 3.5% annually.

Sources:

  • The Washington Times, Byline: Gregory Lopes
  • Intel Corp., Chairman: Craig Barrett
  • Applied Materials Inc.
  • BP America Inc.
  • Pitney Bowes Inc.
  • Wal-Mart Stores Inc.
  • Omnimedix Institute (Portland, Ore.)
  • Towers Perrin (benefits consulting firm)
  • Kaiser Family Foundation (annual survey of employer health benefits)

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