Hospitals are costly places. Andrew Thompson hopes his company can help keep people out of them.

His Silicon Valley start-up, Proteus Biomedical Inc., is testing a miniature digestible chip that can be attached to conventional medication, sending a signal that confirms whether patients are taking their prescribed pills. A sensing device worn on the skin uses wireless technology to relay that information to doctors, along with readings about patients' vital signs.

Mr. Thompson predicts the company's technology will generate a wealth of new information about patients' evolving conditions and the impact of drugs they take. Doctors might decide to intervene, for example, when they notice a heart patient isn't sleeping well or is taking incorrect dosages -- problems that could lead to congestive heart failure.

Proteus isn't alone. Dozens of large and small companies are turning to wireless technology to achieve what the Obama administration is seeking through legislation: a health-care system that keeps people healthier for less.

"Wireless applications have the potential to change every one of these areas," said Eric Topol, a cardiologist and genomics professor at Scripps Research Institute, at an industry event in San Diego last week.