GE Inks 10-Year Deal With Sanford Health

GE Healthcare has signed a 10-year comprehensive services agreement with rural not-for-profit healthcare system Sanford Health of Sioux Falls, S.D.

Under the deal, GE will work with Sanford to deliver $44.6 million in operational savings over 10 years by optimizing clinical assets and increasing efficiencies, according to the vendor. Productivity will be increased by integrating multiple biomedical engineering and radiology departments, several fleets of clinical equipment, and workflow for all staff, GE said. Sanford Health includes 39 hospitals, 225 clinic locations and 1,360 physicians in 81 specialty areas of medicine. With more than 26,000 employees, Sanford Health is the largest employer in North and South Dakota.

“We believe the best and least expensive way to care for patients is to centralize clinics and hospitals to share equipment and expertise,” said Randy Bury, Sanford’s chief administrative officer. “With the growth we are experiencing, we know there are opportunities to better integrate our departments, optimize workflow across our locations, standardize operations and ensure we have the right amount of technology for patient care. Through this partnership, we believe GE Healthcare will help us achieve our operational outcome goals and pursue expansion efficiently. We also feel they are the right cultural fit for our organization.”

GE said it also will provide annual operational savings through optimized maintenance, mobile asset optimization, and lifecycle planning. In addition, GE aims to help Sanford achieve its quality and safety outcome goals by increasing asset utilization, avoiding unplanned downtime, and enhancing the cleanliness and distribution of assets, according to the vendor.

“In this challenging environment of consolidation, regulatory changes and emerging patient needs, it’s not business as usual for health systems and providers. At Sanford, our experts in operational excellence and productivity will use the power of software, data and analytics to increase speed and efficiency,” said Richard Neff, vice president and general manager of GE Healthcare Services, U.S. & Canada.

Partnerships between hospitals and major medtech manufacturers are becoming more common as healthcare providers and payors look for ways to lower skyrocketing medical costs and create a business model that addresses current and future clinical, operational and equipment needs of large hospital systems. Last summer, Royal Philips N.V. and Georgia Regents Medical Center in Augusta teamed up to improve patient care, boost the hospital’s efficiency and reduce costs, Georgia Regents Medical Center CEO David Hefner said. The alliance is expected to help the organizations shift from having a transactional relationship to participating in a new delivery model. Both organizations have also established performance metrics.

“It’s now about them helping us deliver patient care,” Hefner said.

Georgia Regents is directing about $300 million over 15 years to Netherlands-based Philips to create the non-traditional delivery model. Philips will retain ownership of the medical technologies and equipment as well as responsibility for managing the equipment and providing education to staff. In addition, the company plans to test new products and conduct research and development programs at the Georgia Regents facility. While the contract does not require the 503-bed public academic medical center to exclusively purchase Philips devices and equipment, the two organizations plan to incorporate more Philips Healthcare products into all care areas, including radiology, cardiology and oncology. The hospital will also have access to products in Philips’ other business units, such as lighting and oral healthcare.

Hefner said he expects to see 20 percent savings over the course of the contract. “We’re going to get much more value for our dollar,” he said.

As part of the agreement, the hospital will receive new lower-dose imaging systems as well as newer patient monitoring technologies, according to Hefner and Steve Laczynski, president of Philips Healthcare Americas.