Thursday, April 28, 2005

IBM and University of Pittsburgh Medical Center forge Alliance

IBM and UPMC $402 Million Agreement Means Economic Development for Region First Step in UPMC's New Strategic Plan to Create Jobs and Businesses Through the Commercialization of Its Intellectual Property
April 28, 2005 — IBM and the University of Pittsburgh Medical Center (UPMC) announced today an eight-year agreement with a total value of $402 million. Under this agreement, IBM and UPMC will co-develop technological solutions to the most pressing issues facing health care today: quality and costs. These solutions, developed right here in Pittsburgh, will then be marketed to health care organizations throughout the world.
“By creating new businesses and technology with IBM, UPMC will attract new capital, employment and economic development opportunities to the region, ” stated Jeffrey Romoff, president of UPMC. It is estimated that the initial group of businesses created from this alliance will bring more than 200 new skilled jobs to the area.

Why are IBM and UPMC entering into this agreement?
What are the highlights, and what will they allow UPMC to do that they couldn't do before?
Why is such a solution urgently needed in the health care industry? What problem(s) will this solve?
How does today's announcement support IBM's On Demand strategy?
Specifically, what technology and services are involved?

The agreement between UPMC and IBM has two major components. First, UPMC will invest $352 million in re-engineering the health system’s technology infrastructure to an on demand computing model that is geared toward innovation, yet adaptable and flexible to meet ongoing business needs and growth. This model that will be developed by IBM and UPMC will then be jointly marketed to other health care organizations.
Second, the organizations will jointly invest up to an additional $200 million over the life of the contract, with an initial investment of $50 million for the development of medical technologies and information systems to address important patient care and public safety issues.
Neil de Crescenzo, Business Consulting Service (BCS) Health Care Industry Leader, Global and Americas, IBM stated, “UPMC is unique among health care organizations in the breadth and depth of its information technology, and as one of the country’s most successful integrated health care delivery and financing systems, UPMC possesses all the elements that make it an extraordinary laboratory for the development of health care solutions that can transform the industry. It is really the only place where such a project could be undertaken.”
“We congratulate UPMC and IBM, two recognized leaders in their respective industries, for forging this alliance that allows them to combine their programmatic strengths and creative resources to develop solutions for the betterment of health care world-wide,” stated Pittsburgh Mayor Thomas Murphy.
Mayor Murphy went on to say that today’s announcement is a harbinger for a brighter economic future for western Pennsylvania as UPMC creates businesses from the wealth of its intellectual property and thus, bring jobs to the community.
Romoff told the state and community leaders gathered for today’s announcement that this is just the beginning.
“With today’s news, UPMC also is publicly announcing a unique new corporate strategy, which combines the traditional mission of the academic medical center with an enhanced focus on the development and commercialization of highly promising medical and health care technologies, ” Romoff continued. “Under its new vision, UPMC not only is committed to continuing its tradition of excellence in patient care and support for medical research and education, but also to bringing needed economic development to this region,” he concluded.
In responding to UPMC’s new strategic vision, Dan Onorato, Allegheny County Executive, noted that UPMC has become this area’s mecca for patient care with its wealth of internationally renowned clinical services and is a world-leader for groundbreaking medical discoveries.
“In the future, UPMC promises to be this area’s new bedrock for economic development, as the fruits of the labor of its physicians, scientists and technical experts will come to fruition right here in western Pennsylvania in the form of commercial partnerships like the one announced today,” Onorato concluded.
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