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Philips embarks on plan to change care delivery model

by Loren Bonner, DOTmed News Online Editor | July 03, 2013
Steve Laczynski and Deborah DiSanzo
from Philips Healthcare with
Georgia Regents Medical Center CEO
David S. Hefner.
Philips Healthcare announced a rather ambitious project on July 1: The company will partner with a large health system in the South to transform the health care delivery model. The agreement is worth approximately $300 million, the largest of its kind for Philips.

Philips will provide Georgia Regents Medical Center, a public academic health system in Augusta, Georgia with a comprehensive range of advanced medical technologies and imaging equipment, planning and maintenance services, and consumer products with pre-determined monthly operational costs over a 15-year period.

"This alliance marks the first time a hospital and manufacturer have come together at this level to manage every aspect of the health care system. This goes beyond buying and selling; this is about running a whole system, not just a single department," Steve Laczynski, president of Philips Healthcare Americas, told DOTmed News.

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Georgia Regents includes a children's and adult hospital with 700 bed capacity; outpatient clinics that serve half a million people; an emergency department; a level 1 trauma center for children and adults; a cancer center; and a long-term acute care hospital.

"The march we're on is to align ourselves in a way that provides health care from a better, faster, less expensive platform — that means you have to standardize things and remove waste, duplication, redundancy and unnecessary variations any way you can and in all areas," David Hefner, CEO of Regents Medical Center, told DOTmed News.

Hefner has been on this march for almost a decade. He's tried forging similar alliances before with OEMs but the timing was never right. He said some might attribute this new model to health care reform — which rewards quality and seeks to control costs — but he's been talking about cost control long before it became a buzzword in health care.

"You can say it's health care reform, but I think it's the deficit. We can no longer afford our bad behaviors, we have to start making different choices like every other industry makes," said Hefner.

The alliance will impact all areas of the medical system, including radiology. Philips will own, manage and service all of Georgia Regent's imaging equipment. According to Hefner, this will allow Georgia Regents to accelerate a lot of replacements and upgrades that they wouldn't have been able to make on their own.

Philips, in turn, will be able to develop a new business model that's more applicable to this era of reform.

"Our attractiveness is that we can partner with them [Philips] and help them develop a new business model that they can sell in the marketplace," said Hefner.

John West

Plan to change care delivery model

July 06, 2013 12:44

Right now we are content to pull our own weight whenever possible and partner with the OEM. Our X-Ray equipment service model is to request OEM assistance when we encounter issues that require your special training or experience. I hope you new model can seek to apply leverage with your Dutch corporate administration to relax the restrictions they impose on our in House service departments. We have attended formal Philips X-Ray equipment service training and then denied access to our equipment. We can't even change the Date or Hospital name on our systems without purchasing a contract or T&M service. These restrictions do not open Hospitals up to considering Philips equipment. John West, Methodist Dallas Med. Ctr.

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Tony Suri

Philip OEM

July 11, 2013 12:28

Greeting everyone, this new model of healthcare reform, remember back in 1995 no one was open to healthcare reform, 20 years later here we are, nation divide but we all know something has to be done, Philip is promoting business model leasing is better than owning a car, so if you get max use out of equipment and justify set cost, then hospitals are on track for affordable care. OEM have advantage much greater then the in house service guy. OEM usually charge 1000% margin to sell. Its hard to fight with large cooperation with international business role, better to join, pretty soon large OEM will become provider just as dialysis company with Frenius.

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