Technology

GE-LIG: A Home-Monitoring Power Pair


Technology from Living Independently Group coupled with GE's brand strength gives the partners a fast-growing start in helping seniors stay safe at home

Earlier this decade, a small New York company called Living Independently Group was trying in vain to sell a monitoring system that would help seniors stay safe—and independent—while at home. Meantime, General Electric (GE) was on the hunt for a way to broaden its health-care portfolio without having to build new monitoring technology from the ground up. The conglomerate soon found a match in LIG.

The partnership struck between the pair underscores the shifting demands of an aging population in the face of soaring health-care costs. And how GE and LIG work together to meet those demands provides a template for the growing number of other companies angling for a slice of the $317 billion U.S. market for eldercare.

Founded in 2002, LIG set about developing a product that would keep tabs on a person's whereabouts without compromising privacy. Its brainchild is a system called QuietCare, which uses wireless sensors to monitor a senior's comings and goings and alerts a health-care provider to what it views as unusual behavior—say, frequent trips to the bathroom, a possible sign of a urinary-tract infection. By reducing the need for in-person visits and monitoring, the system would provide an added degree of privacy for a person seeking independence, whether at home or in an assisted-living situation.

At the outset, LIG began marketing QuietCare mainly to consumers. Problem was, many of the seniors who could afford a system that costs as much as $100 a month weren't all that interested in staying at home. House prices were soaring, and many seniors opted to sell their homes and move into communities where essential services, such as laundry and meal preparation, are provided, says LIG Chief Marketing Officer Jim Caci.

The Coming Baby Boomer Surge

At the time there were 35.6 million Americans aged 65 and older. That number increased to 38.9 million by 2008 and is set to surge in the coming years as the generation born after World War II, the baby boomers, enters retirement. By 2020 the total is expected to be 55 million.

In hopes of catering to that growing population, GE was working on its own home health-monitoring device—though it quickly realized it would take too long to get a system ready. (It took LIG several years to produce the complex algorithms used in QuietCare.) So GE began looking for a company that had already developed the technology but lacked the resources to market and distribute it globally.

LIG fielded proposals from several suitors but opted for GE in hopes that customers would trust the company's reputation, Caci says. "The thing GE presented to us that none of the others could was branding value," he says. "Everyone, especially our parents, knows who GE is. So now we can not only say we have this great product, but if you have QuietCare, you also have GE behind the product."

By September 2008 the companies struck a deal that lets GE co-market and distribute LIG's products while giving LIG access to GE's vast research facilities. Financial terms were not disclosed.

"The Infancy of Our Business"

Job No. 1: revamping LIG's marketing. GE reckoned it would find a more willing market among assisted-living facilities looking for ways to reduce expenses and protect privacy while keeping close tabs on patients' well-being. Besides, the sales force at GE Healthcare is more adept at marketing to business buyers, says Jim Pursley, a general manager in sales at GE Healthcare's Home Health unit.

So GE got busy cold-calling, deploying sales forces, and promoting QuietCare at trade shows. In the past year, GE has signed up about 50 assisted-living facilities. A few hundred individual customers also use the system in home settings. "Conceptually, the number is very small," Pursley concedes. "We're in the infancy of our business. We look at this as a strategic move into a huge and growing market." The service makes up a tiny slice of revenue generated by GE's health-care business, which contributed $17.4 billion, or almost 10%, of GE's $182.5 billion total last year.

The challenge now for GE and LIG is polishing their pitch to individuals—the legions of seniors who will increasingly stay home for long stretches. The mortgage meltdown and recession have slashed house prices, forcing many people to hold off on plans to sell their homes and move to environments more hospitable to the elderly. Assisted-living facilities also become less viable as an option as care costs skyrocket and people live longer, depleting savings built up in earlier decades. "We get calls from people every day looking to put QuietCare in their homes," Pursley says. "Customers are ready for it. But to exactly what extent, we don't know."

Emily Schmitt is a graduate student in business journalism at New York University. She holds a bachelor's degree in history from the University of Wisconsin. Before attending college, Schmitt worked in health care.

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