By Cassimir Medford

Calling it the MP3 player of healthcare, five companies including Intel and Wal-Mart announced on Wednesday an online database that will house the health records of their 2.5 million employees, retirees, and dependents, and perhaps spur the development of a national database.

At an event in Washington, D.C., executives from Intel, Wal-Mart, Applied Materials, BP America, and Pitney Bowes said they will contribute “seven-figure” amounts toward the construction of a database known as Dossia that they hope will improve efficiency in the delivery of healthcare (see Intel, Wal-Mart Plan Health Net).

, Intel, Wal-Mart Plan Health Net

The companies were quick to address perhaps the biggest consumer concern about Dossia: privacy. The concept of employers paying to house employees’ health records sounds to many like the fox guarding the henhouse. Many see the potential for employer discrimination based on health.

“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,” said Craig Barrett, chairman of Intel. “It will be held by an independent, unbiased, not-for-profit corporation.”

Dossia will be developed and managed by Omnimedix Institute, a nonprofit organization headquartered in Portland, Oregon. The Dossia technology will gather medical information about members from various sources and store it within a private database.

Portland, Oregon

The records will be portable, hence the MP3 comparison, so users will be able to continue using or granting access to their records, even if they change employers, health plans, or doctors.

Shares of Intel fell $0.12 to $21.00 in recent trading, while Wal-Mart shares dropped $0.03 to $46.45, Applied Materials shares rose $0.06 to $18.61, BP shares remained unchanged at $68.62, and Pitney Bowes shares fell a nickel to $46.45.

System Has to Change

The database, which will be rolled out in 2007, will support multiple personal health applications that will allow users to collect data from multiple sources in a format that is useful to them.

Dossia will accept keyed-in input, scanned input, along with data sourced from existing health records from pharmacies, doctors, hospitals, etc. No one other than the individuals whose records are housed in the database has automatic access to the data, Mr. Barrett said.

Employees can opt in or opt out of the system. They can share all of the information or selected parts of it with whomever they want, whether family members, doctors, or hospitals.

“We are trying to get waste out of the system because we are worried about our competitiveness,” said Mr. Barrett. “If we are paying half of the bill in the United States for our employees’ medical care, we want to get a more effective return on that investment. The system has to change.”

United States

Employers pay almost half of all U.S. healthcare costs. Despite years of discussion and attention on data automation, the healthcare delivery industry has remained mostly paper-based, with all the errors involved in paper handoffs among doctors and hospitals.

U.S.While the founding members are each contributing seven-figure sums toward the initial R&D funding, long-term cost-sharing will come from employers paying a small sum per employee and per transaction.