Four years ago, futurist David Houle and health care attorney Jonathan Fleece predicted that one-third of U.S. hospitals would shut down because of financial, operational and clinical challenges by 2020. While health systems and accountable care organizations have emerged as a way for hospitals to leverage resources in a shifting health paradigm, other unique partnerships are also forming between providers and OEMs.

"Hospitals and other health care practices are looking for innovative and sustainable ways to provide the best care possible to their patients," Lee Cooper, president and CEO of GE Healthcare, U.S. and Canada, told HCB News. "An MES agreement is an effective way to gain new technologies, construction, service and training — all while dispersing the financial impact over many years."

GE Healthcare and Heritage Valley Health System announced such a partnership yesterday. For the next 14 years, the health system will be kept up-to-date on advanced medical equipment while mitigating its chances of becoming part of Houle and Fleece's one-third.
Moving from a model of fluctuating capital expenditures to a model that is more predictable and consistent, Heritage Valley will establish a budget for expenses that include equipment replacement, associated construction costs, and ongoing staff training and service. It will also help the health system avoid technological obsolescence.

“This enables Heritage Valley to continually enhance our entire suite of imaging equipment, bringing the best technology available into our hospitals and community satellites," said Dr. John Luellen, vice president and chief operating / quality officer, Heritage Valley Health System, in a statement.

The agreement initially calls for new MR and CT scanners for two of their hospitals, new ultrasound equipment for another one of their hospitals and medical neighborhood locations, nuclear imaging cameras and upgrades to their existing GE CT scanner.

Heritage Valley Health System is an integrated delivery network providing health care services to residents in Pennsylvania, Ohio and West Virginia. More than 167,000 residents will have access to the new imaging services and technologies at the health system.

This is GE's first managed equipment service (MES) agreement in the U.S. and it expects to launch many more MES solutions across the country in the near future.

Philips Healthcare has been involved in many similar partnerships in recent years.

In November 2015, Philips and Mackenzie Health entered a $300 million, 18-year partnership. In June 2015 the company had entered a $500 million partnership with Westchester Medical Center Health Network; and this past January it entered a $90 million, 15-year partnership with Marin General Hospital.

Two years after Philips embarked on a 15-year, $300 million partnership with Georgia Regents Medical Center, the health system saved about $7 million and had a 35 percent reduction in technology spending.

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