The University of Pittsburgh Medical Center (UPMC) has tapped IBM for a US$402 million project to consolidate its IT infrastructure to reduce operating costs and support new applications like electronic health records.
The eight-year deal, set to be announced Thursday, will also include joint investment in research and development of new health care technology, such as methods to detect nationwide epidemics or bioterrorist attacks.
Paul Sikora, director of production services at the medical center, said his organization will standardize on IBM hardware and software to replace existing technology from myriad vendors, including Hewlett-Packard Co., Sun Microsystems Inc., Hitachi Data Systems Corp. and EMC Corp.
"We can"t continue to build out our infrastructure in that form because it takes too much support, too much expertise, to make it practical," he said. "We will have eliminated a number of operating systems and standardized on a set of hardware and a set of tools to enable us to manage according to service levels rather than technology silos."
As a result, the medical center will reduce its IT operating costs by 15 percent to 20 percent within three years, Sikora said. As part of the consolidation, UPMC will reduce its operating systems from nine to three, the number of servers from 786 to 305, and its storage arrays from 40 to two.
The consolidated infrastructure will allow UPMC to more easily build out its electronic medical records system, which it has been developing for the past four years, said Nancy Landman, UPMC"s director of business development and operations.
"It is not as simple as implementing one application and putting it up and it runs and provides the information," she said. "When you are looking at patient information ... there are multiple sources of information that feed into that. The integration needs in the electronic health records environment are just huge and continue to grow."
The cost savings from the consolidation will help fund more strategic initiatives like an electronic physician order entry system, Landman said.
"Before, the physician would enter orders on paper charts, and there was no second-guessing that physician on what they were doing," she said. "Now, with the data we are collecting and the analytical tools that are available, we can take best practices and intervene at that point of care. We can say, "The lab values show this medication might not be the best medication." "
The deal represents IBM"s largest win so far in the health care sector for its on-demand computing initiative, said Neil de Crescenzo, IBM"s health care industry leader.
IBM and UPMC jointly will invest a minimum of $50 million on research and development, with a possible joint investment of $200 million over the life of the contract.
The partnership will create a testbed for technology to monitor nationwide disease outbreaks and to apply lean manufacturing and quality-improvement processes from manufacturing organizations to hospital operations, de Crescenzo said.
IBM also will contribute hardware and technical development support for UPMC"s work with the National Cancer Institute"s cancer bioinformatics grid project, which is designed to support data sharing for cancer treatment and prevention.