Philips inks 15-year $75 million MES deal with Children’s Health in Texas

by Lauren Dubinsky, Senior Reporter | September 24, 2018
Business Affairs Patient Monitors
Children’s Health in Dallas, Texas
Royal Philips announced on Tuesday a 15-year managed equipment service (MES) contract with Children’s Health in Texas worth $75 million.

“As hospital systems move from fee-based to value-based care, long-term strategic arrangements are becoming the business model of choice to better manage the cost and complexity of their technology investments, while expanding quality access to advanced medical care for their communities,” Carla Kriwet, CEO of connected care and health informatics at Philips, told HCB News.

As part of the contract, Philips will outfit the health system with its IntelliVue X3 smartphone-esque patient monitors. Children’s Health will also have access to other Philips monitoring technologies including IntelliVue Guardian with Early Warning Scoring and the IntelliVue Mobile Caregiver.

“IntelliVue X3 is designed for uninterrupted patient monitoring — at the bedside and during transport,” said Kriwet. “This is important for adult patients and also for more vulnerable populations, like children.”

IntelliVue X3 also has the ability to provide dual SpO2 measurements on its own instead of requiring an additional measurement module. That is a common measurement needed for neonatal patients in the NICU environment.

In recent years, these MES agreements have become increasingly popular. The trend is mostly motivated by potentially significant cost savings and the opportunity to be on the cutting edge of technology.

“This is a very attractive value proposition for a lot of health systems, especially in a competitive environment where they have to attract physicians and patients by the fact that they have the latest medical technology to offer,” Sourabh Pagaria, senior vice president and global head of enterprise services at Siemens Healthineers, said in our August magazine issue.

Philips is dominating the U.S. market, but Siemens has a strong presence in Europe, with around 30 contracts under its belt. GE Healthcare also has contracts in Europe.

Since value-based care is on its way to becoming the standard reimbursement model, MES agreements may become the standard way hospitals and health systems procure equipment. The healthcare system is facing enormous challenges including the aging population and an increase in chronic, lifestyle-related diseases, while also under pressure to increase access and quality of care.

“We need to focus on breaking down the boundaries standing in the way of organizing healthcare around the patient,” said Kriwet. “This is done by forming long-term, deep, strategic partnerships to co-design innovations that seamlessly bring together people, data and technology.”

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