Hardware, services, and synergy: Can the Dell-Perot combination deliver for healthcare?

When the Round Rock, Tex.-based Dell Corporation announced its agreement to acquire the Plano, Tex.-based Perot Systems for $3.9 billion in September of last year, the announcement created a stir not only in the business world in general, but in healthcare as well. After all, Perot (founded in 1988 by famed billionaire and onetime-presidential candidate H. Ross Perot, and eight associates) was particularly well-known in healthcare as a claims processing giant and provider of other business services in healthcare; while the giant Dell is still best-known among the general public as one of the global leaders in personal computer manufacturing.

But the executives from Dell and Perot who put their companies together see a far richer and more nuanced set of opportunities for their new joint corporation than simply the harnessing of hardware and business process services. Instead, they're looking to become something much more than the ostensible sum of their parts in healthcare, and instead to leverage the intellectual and resource capital of both companies to forge new paths in our industry.

“I think we've brought together a team that sets us apart in the industry, and we take a very different approach from other companies I've worked for, and that approach is, first, understand what people do for a living, and what the major business problems are that our services can solve,” says Jamie Coffin, vice president and general manager, Dell Healthcare. “So it's not about selling hardware to the customer, it's about helping customers with their needs,” says Coffin, who notes that he has a Ph.D. in rational drug design, and that his scientific background has led to his prior professional involvement in both genomics-related research, as well as extensive IT experience.

Meanwhile, Berk Smith, president of Dell Services Health Care, who came from the Perot “side,” is now over the Dell Services portion of the company, which is bringing forward the services component of its offerings, based largely on Perot's capabilities. For Smith, the question he imagines everyone is asking is, “What does all the breadth and scale [of the merger] mean? It means we're deeply focused on solving the problems and challenges that face healthcare providers now,” including dealing with issues arising from the federal American Reinvestment and Recovery Act/Health Information Technology for Economic and Clinical Health Act (ARRA-HITECH), as well as a host of implementational issues in clinical IT more generally.

At this point, Smith points out, “We serve over 50 percent of the hospitals in the U.S. We support over 30,000 physician groups comprising over 200,000 physicians; and that number is growing rapidly every day, with the stimulus on the horizon. And we serve seven of the 10 largest healthcare systems in the country, and six of the top 10 pharmaceutical companies; and we'd want them to know the deep levels of expertise we have in different areas.”

So what will the new horizons be for the combined company? They are exciting horizons indeed, say Coffin and Smith. Among the areas the company will focus on include:

• A focus on enabling truly mobile clinical computing for clinicians, to allow them to move easily from one device to another and from one room in a patient care organization to another, under the rubric of the “virtual desktop,” and with a focus on what the company calls a “shift from managing devices to managing identities,” for far freer flow of clinicians through their workplaces

• Virtualization of server platforms, to optimize providers' IT resources and capabilities

• Virtualization of electronic health record (EHR) solutions

• A ramping up of the Dell Affiliated Physician EMR Solution, which is designed to enable hospitals to quickly implement sponsored EMRs for their affiliated physicians

• A strong push forward on the new platform that Dell announced in collaboration with the Chicago-based American Medical Association (AMA) in March, which will help practicing physicians assess and meet their clinical and practice needs, and should help physicians more quickly be able to identify, select, and implement EMRs in their private practices.

Indeed, it is with regard to the AMA collaborative platform that one can see the synergies between the two parts of the newly merged company really kicking in, Coffin says. “We will do technology assessment in a particular practice, technology set-up for that practice, implementation support, and support through our call centers for hardware, software, and services. With our implementation, they call Dell, and if it's a software problem, we work with the software problem; and if it's a hardware problem, we deal with it.” Specifically, “We had the front-end services component, the support in the practice,” coming from the Dell side, Coffin notes; “but they bring the back end, clinical transformation aspect, and support for the software through a service center,” from the Perot side.

As a result, Coffin and Smith say, they say a unique set of capabilities and resources that they and their colleagues can bring to bear within healthcare, and they're not shy about believing that their combined company will soon have a far bigger and more evident footprint in healthcare, as hospital organizations and physicians attempt to move forward quickly to implement solutions and transform how they deliver care in the age of meaningful use.

“We now become one of the only firms in the world, literally, that can go this deep from a domain and services capacity, and has the global reach, and the product development and manufacturing side; so we can take it from the hardware side all the way to the service end, and end-user support side,” Smith says.

Of course, only time will tell whether the new Dell organization will be able to successfully mine the potential synergies of its Dell-Perot combination. What's clear is that with ambitious leaders like Coffin and Smith, and a potentially huge footprint across healthcare, this is one company everyone will be watching for its next moves in the industry.

Healthcare Informatics 2010 June;27(6):46-56