GE and Intel have joined forces to create a new healthcare company focused on telehealth and independent living. The joint venture will aim to provide digital healthcare products to enable elderly people to remain independent and provide more convenient and cost-effective means to doctors and their patients to manage chronic disease.

The new 50-50 joint venture will combine the assets of GE’s Healthcare Home Health unit and Intel’s Digital Health Group and will be headquartered in Sacramento. It grows out of a healthcare alliance first announced in April 2009 between the two companies to focus on independent living and chronic disease management products. Pending regulatory and other customary closing conditions, the joint venture is expected to become operational by the end of the year. Financial terms were not disclosed.

The move comes as the population of people over 60 is expected to more than double by 2025 to 1.25 billion people worldwide from 2006 levels. At the same time, the growing burden of chronic diseases in the United States now account for about 75 percent of total healthcare spending. Together these demographic changes are increasing pressure on healthcare systems to invest in affordable ways to improve access and disease management while creating market opportunities for companies that can deliver technologies that address these problems.

The two companies said in a webcast that with the dramatic increase of people living with chronic conditions, and a global aging population, there is a need to find new models of healthcare delivery and extend care to the home and other residential settings.

“Our aging population and the growth of chronic disease are driving our traditional models of care to the breaking point,” says Louis Burns, vice president and general manager of the Intel Digital Health Group and CEO of the new joint venture. “At the same time, we’re facing the shortage of qualified care givers. We simply do not have the resources to care for our elders in traditional hospital settings and institutional settings.”