An article in the current issue of Healthcare Informatics looks at how some vendors and health systems are formalizing long-term software development deals. These agreements can lead to new clinical applications, but there are "cultural complexities" involved with working together, according to Healthcare Informatics.
Intermountain Health Care in Utah and GE Healthcare in July 2005 announced a 10-year project under which the two companies would collectively invest more than $200 million. The two organizations co-developed an electronic medication administration record product, which they plan to introduce during Q4 2006.
The organizations later will introduce emergency department, critical care and ambulatory care products to "leverage the strength of ... Intermountain's clinical IT infrastructure," Healthcare Informatics reports. The partnership is saving Intermountain money in development costs and it should facilitate collaboration with other providers using the same software, Healthcare Informatics reports. GE Healthcare plans to market the products to the health care industry.
Another example of partnerships between vendors and health systems is a deal between McKesson and Vanderbilt University Medical Center. McKesson in 2001 bought the rights to a computer physician order entry product, called WizOrders, developed by Vanderbilt. McKesson renamed the application Horizon Expert Orders, and Vanderbilt helped McKesson integrate it with its other Horizon products and continued to develop functionality and content.
Dr. William Stead, associate vice chancellor for health affairs and CIO at Vanderbilt University Medical Center, said, "One of the reasons that the health care industry has not reached its potential is that we haven't yet figured out how to mesh academia and industry."
The partnership with McKesson has been worth more than $20 million to Vanderbilt, but it has been "organizationally challenging," Stead said. McKesson and Vanderbilt went through extensive negotiations because they "wanted to create something that takes advantage of what each organization does best separately," Stead said.
The University of Pittsburgh Medical Center and IBM also have formed a product development partnership, which grew from discussion of an infrastructure project, Healthcare Informatics reports. IBM during a three-year infrastructure transformation will help UPMC reduce its 780 servers to 305 and its nine operating systems to four. It is estimated that this will save UPMC $100 million during the the eight-year agreement.
In addition, each organization will commit $100 million for research projects in the areas of biosecurity, patient safety and electronic health records. The organizations will begin by investing $25 million each over the first three years of the agreement.
Three senior executives from IBM and three senior executives from UPMC will serve on a governing board that will evaluate a variety of potential research projects. Once the governing body determines that an investment is worth pursuing, intellectual property ownership issues are negotiated and joint commercialization is discussed, Healthcare Informatics reports (Raths, Healthcare Informatics, July 2006).