Reevaluating the Provider-Vendor Relationship in Georgia

June 5, 2015
Georgia Regents Medical Center took an unusual step in trying to adapt with the constant shifts in the healthcare system. They entered a 15-year, $300 million shared-risk agreement with a vendor.

For large health systems, hospitals, and medical centers, adaption is key in a constantly changing environment.

Technologies can go in and out of style by the time the organization finishes with a major implementation. Federal and state government regulations are shifting so much that it's hard to keep up with what is required on a month-to-month basis.

Augusta-based Georgia Regents Medical Center (GRMC), an academic medical center with an adult and children's hospital, was dealing with that issue. Like many other organizations, GRMC was trying to determine how often to upgrade capital equipment and maximize their return-on-investment (ROI) in this changing environment.

Rather than go through proposal after proposal, upgrade after upgrade, and implementation after implementation, GRMC approached the problem in a novel way. The organization reached out to Philips, an Andover, Mass.-based large health IT hardware and software vendor, to form a shared-risk collaboration where the vendor would not only update software and hardware systems over a prolonged period of time, but would be integrated into the health system's day-to-day approach.

"The model we built is we have a Philips team and Philips resources that are a part of our organization. Instead of someone I'm employing to manage equipment uptime, [a team from Philips] is physically in my department, attending meetings, working with me and built into my organizational infrastructure," says James Rawson, M.D., GRMC's Chief of Radiology. "They're not out of site, out of mind. They're participating on a daily basis."

A 15-Year Plan

The deal spans 15 years and is worth approximately $300 million. The collaboration doesn't anticipate every change in healthcare over that time period, says Dr. Rawson. It's a rough draft that is constantly being reevaluated and updated with any of those major shifts in the healthcare landscape. Both organizations focus on patient outcomes metrics for its goals, rather than transactions.

"In a traditional vendor-provider relationship, the vendor sells and maintains equipment. What we've done is institute goals that are not transactional," says Rawson. "For instance, we've increased the volume in our radiology department this year without adding incremental pieces of equipment. Our [radiology] volume was up more than 30 percent. In the traditional vendor relationship, they'd sell more equipment. In this case, we changed the workflow to accommodate the growth. The cost of providing the care is lower because we didn't have to buy an MRI."

In fact, Rawson says that the deal didn't specifically include requirements for the sale of capital equipment. Despite that notion, upgrades have already occurred. GRMC has replaced and upgraded 525 patient monitoring devices and 800 imaging and care devices since the deal was put in place in 2013. It also put in a new picture archiving and communications system (PACS), which he says exemplified the uniqueness of this collaboration.

"We looked at this as not a radiology project but as an enterprise project. Our PACS system, when I log in and look images, I not only see images performed in radiology but see cardiac, echo, OB ultrasounds that are performed in other departments. When referring physicians log in, they can go directly into the PACS to view images, or we created an image-enabled EHR. When they're working in Cerner's PowerChart, they can see the images with one click," Rawson says. "That's allowed for better clinical decision making."

Because it's a long-term deal, Rawson says the upgrades are flexible in nature. GRMC can plan across multiple fiscal years when looking at an upgrade, allowing them to be more proactive and not reactive.

Furthermore, in this dual-risk agreement, not only are capital equipment upgrades not a requirement, but technology improvements are not required to be from Philips. Thus, the vendor has to maintain high-level equipment. The company is also judged on performance metrics by its own equipment as well as enterprise metrics on how the hospital and key clinical leaders are doing.

An Ongoing Journey

Moving ahead, GRMC plans to continually reassess capital equipment decisions and its maintenance model through this alliance. He doesn't see these decisions in the matter of "discrete projects," but rather an ongoing journey. "All of those pieces are interdependent," says Rawson. "The collaboration is a project in of itself. It has sub components but I don't think of it that way."

In other words, the collaboration touches all areas of improvement throughout GRMC. For example, with the renovation of the children hospital's radiology department, they've instituted wholesale changes in equipment, room presentation, and operational processes. "You could consider that a project but that's just the way we're doing business," Rawson says.

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