Hospitals

Philips deal with Medical University of South Carolina Hospital reflects strategy shift

While previous agreements were enterprise-wide, comprehensive partnerships, the latest deal is focused solely on patient monitoring and informatics, Philip’s vice president of managed services and enterprise partnerships, Matt Bierbaum, said in an interview.

philips postRoyal Philips added its fifth North American hospital services contract with the announcement of a $36 million, 8-year alliance with Charleston’s Medical University of South Carolina Health.

While previous agreements were enterprise-wide, comprehensive partnerships, the latest deal is focused solely on patient monitoring and informatics, Philip’s vice president of managed services and enterprise partnerships, Matt Bierbaum, said in an interview.

The move reflects the evolution of Philips’ strategy to integrate its offerings with the desires of business partners via long-term contracts. The company will still emphasize physician training, installation, consulting and other “solutions,” but they won’t be centered on Philips’ other devices like MRI machines and CT scanners.

The challenge posed by aging infrastructure is at the top of hospitals’ minds, but so are cost considerations, Bierbaum said. “How can we work directly with vendors and suppliers to evaluate new ways in which to meet this challenge,” he asked.

Smaller, focused partnerships make sense in an environment where hospitals are understandably hesitant to commit to large sums of money in a single contract. The other contracts have a minimum term of 15 years and are worth between $90 and $500 million.

Turning to the latest deal, Bierbaum said that patient monitors are typically replaced floor-by-floor or department-by-department. According to the VP, The approach taken by MUSC will improve interoperability, both in the technical IT-geek sense, and by promoting standardization of work flow and clinical practices.

Reflecting the growing importance of software in traditionally hard-ware focused med tech, Bierbaum said key offerings in contract include the company’s cloud-based IntelliSpace decision support dashboard and Guardian software to warn physicians of impending “code conditions” like sepsis.

The deal with MUSC was agreed to after a technical and clinical evaluation.

“We want to give our staff, learners, and patients access to the best patient monitoring technologies in order to deliver on the highest quality, safest, and most reliable healthcare through the use of Phillips patient monitoring equipment across our entire enterprise,” said MUSC CEO Patrick Cawley, in a statement. “…Philips will help us to meet our goal of delivering an exceptional patient care experience.”

Pre-existing North American hospital alliances include contracts with Marin General Hospital in California, Canada’s Mackenzie Health, the Westchester Medical Center Health Network in New York, and Georgia Regents Medical Center in Augusta. Interestingly, at Mackenzie Health, Philip’s has operational responsibility of competitor’s devices as well, Bierbaum said.

GE Healthcare is also getting in on the hospital contract game, which Philips leads, especially in North America. In November, GE announced a 15 year-deal with Humber River Hospital in Mississauga, Ontario worth an initial $50 million.
Long-term contracts like that are more common in Europe. Philip’s focused partnership with MUSC resembles Medtronic’s alliance with some European hospitals, where it helps run the catheterization labs.

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