UPDATE 3-GE, Intel see big opportunity in home healthcare

* GE's Immelt sees "multibillion-dollar" market

* GE, Intel to invest $250 mln in development

* Intel CEO says devices could cut cost of healthcare (Adds consultant, paragraphs 8-9)

By Scott Malone

NEW YORK, April 2 (Reuters) - General Electric Co (GE.N) and Intel Corp (INTC.O) have joined forces to develop devices to help doctors monitor patients' health remotely, an area they believe could become a multibillion-dollar business.

The U.S. conglomerate and the world's largest chip maker will develop devices that they expect to save money by allowing healthcare workers to monitor the sick and the elderly outside of hospitals or medical offices.

They plan to invest $250 million in the field over the next five years.

"The digitization of healthcare is in the first inning," said Jeff Immelt, chief executive of GE, the world's largest maker of medical-imaging devices. "We think it's going to grow quickly."

It could become a "multibillion-dollar" business, he said.

By treating patients remotely, the venture aims to reduce the cost of healthcare for the elderly and people with chronic conditions such as diabetes or heart disease, which require prolonged periods of treatment.

"Something like 80 percent of the spending today in the healthcare system is on chronic care patients," said Paul Otellini, CEO of Intel. "This has the potential to take that down dramatically because a day at home costs a heck of a lot less than a day in the hospital."

While there has been a lot of discussion about remote technology in the health industry, providers have been slow to implement it, in part because of concerns about a lack of standards in how the devices would communicate, said Andrew Rocklin, principal at Diamond Management and Technology Consulting in Chicago.

"GE is big enough and already has a distribution channel in place," Rocklin said. "If they can ramp up sales of this kind of tool quickly enough, the standards will follow."

The United States' stimulus package includes $20 billion in funding to modernize the health industry's record-keeping system, replacing billions of sheets of paper with a computerized record systems that could more easily communicate with one another.

GE is working on electronic medical records as well, and Immelt said the stimulus program could "tangentially" benefit the GE-Intel program by stimulating investment in healthcare technology.

Other big tech companies working on developing common healthcare information standards include Google Inc (GOOG.O) and Microsoft Corp (MSFT.O).