UPitt, IBM sign US$402 million deal

An eight-year, US$402 million project will help the University of Pittsburgh Medical Center (UPMC) integrate its care sites, lay the foundation for a future regional health information organization and commercialize some of its health-IT systems and expertise. UPMC and technology partner IBM announced the deal late last week.

The majority of the contract, US$352 million worth, is to expand the reach of UPMC's current clinical-IT systems and integrate all UPMC facilities, including 19 acute care hospitals. IBM and UPMC also will jointly invest a minimum of US$50 million to develop and commercialize new medical and information technologies that will address patient safety and public health issues such as EHRs, healthcare quality and biosecurity, IBM officials said. This investment could grow as large as US$200 million.

Among the projects planned, IBM will help UPMC's Center for Biosecurity develop IT for health systems and public health agencies to respond to epidemics and bioterrorist attacks.

Nancy Landman, director of business development and operations in UPMC's information services division, says that IBM and the university are "early in discussions" on what to commercialize and how to go about it. "Over the next six months, the initial projects will be defined," she says.

What already is known is that UPMC will streamline much of its IT infrastructure, reducing the number of operating systems from nine to three and the number of servers from 786 to 205, IBM officials said. The university health system expects to reduce administrative costs by 15 percent to 20 percent annually at the end of the eight-year project.

UPMC currently runs Cerner software for its inpatient records, computerized physician order entry and information systems in its pharmacies, emergency departments and the physician groups it owns, according to Landman. Stentor provides picture archiving and communication systems.

"The plan is to hit affiliate physicians and provide some service to them," Landman said.

Lawmakers and the Department of Health and Human Services currently are considering changes to the Medicare anti-kickback law and Stark rules on physician self-referrals to allow hospitals to provide IT services to affiliated physician groups." Connectivity also will look at the payer side," Landman added. UPMC runs its own HMO, behavioral health organization and institute on aging. Included in the discussions are pay-for-performance and other incentives to encourage affiliated healthcare providers to adopt IT, Landman said.

Landman said that UPMC is talking with Pennsylvania officials and with the Chicago-based Healthcare Information and Management Systems Society about linking electronically to other health systems to build a regional health information organization.

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