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Five major corporations last week announced plans to fund the development of a Web-based system that would allow their employees and retirees to access and maintain personal medical records.

Officials at the companies — Applied Materials Inc., British Petroleum America Inc., Intel Corp., Pitney Bowes Inc. and Wal-Mart Stores Inc. — said they have jointly invested several million dollars in the project as part of an effort to cut hefty health care costs.

The electronic health records system, called Dossia, will be developed by the Omnimedix Institute, a two-year-old nonprofit research and development organization that focuses on IT in health care. The Dossia system will keep an electronic store of the health information of some 2.5 million employees and retirees of the sponsoring companies and their dependents.

At a briefing last week, officials of the sponsoring firms said they expect that Dossia — which will be available to their employees by mid-2007 — will reduce medical errors and duplicate testing, and help alleviate other causes of rising health care costs.

Craig Barrett, chairman and CEO of Intel, said that as health care costs cut into the corporate bottom line, it has become critical for companies to take an active role in the process. “Think of [Dossia] as American industry getting involved in health care,” he said. “If we’re paying half of the [health care] bill in the U.S., we want to get a more effective return on that investment.”

Each of the founding members is contributing a “seven-figure” sum to Omnimedix to fund the development of Dossia, Barrett said. The executives declined to disclose the specific amount of the investment.

J.D. Kleinke, chairman and CEO of Portland, Ore.-based Omnimedix, described Dossia as a “hypersecure medical Internet.” Users can enter personal information into the system and can request that it gather specific personal health data for them, Kleinke said. Neither employers nor insurance companies can access the information.

Omnimedix is already working with insurance companies, laboratories and pharmacies in an effort to get them to provide data for the system, said Colin Evans, director of policy and standards at Intel’s Digital Health Group. Intel, which spends $500 million annually on health care, plans to “strongly encourage, if not mandate,” that its health care vendors supply Omnimedix with the data it needs, he said.

Demand to Fuel Adoption

Linda Dillman, executive vice president of risk management, benefits and sustainability at Wal-Mart in Bentonville, Ark., said the retailer expects that growing consumer demand for health information will help drive the adoption of electronic health records.

Dossia Details

Allows employees of founding companies to keep their own electronic stores of health information. Patient data can be shared with a doctor or others only at the users discretion. Each employee decides what information is included in Dossia. Additional employers and government agencies can join by paying a per-user fee. New paying members will be announced in February.

Michael Critelli, chairman and CEO of Stamford, Conn.-based Pitney Bowes, said Dossia will help expand the company’s efforts — including fitness and nutrition programs for employees — to proactively curb health care costs.

Patricia Miller, senior vice president of human resources at Warrenville, Ill.-based BP America, said her company can’t yet quantify potential savings from using the Dossia system, but she noted that “we are confident that just the efficiencies that this sort of system brings will by definition reduce costs.”

Scott Tiazkun, an analyst at market research firm IDC, said the only way a program that allows patients to control health information can get off the ground is through a group effort. “Having Intel and Wal-Mart as part of a consortium guarantees initial success,” he said.

However, he questioned whether such a program can cut health care costs, asking, “Is there a cost benefit to this or just an additional cost of creating this and maintaining it?”

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