Electronics giant Royal Philips has formed a $300 million, 15-year alliance with Georgia Regents Medical Center (GRMC) creating what the two organizations say is a first-of-its-kind delivery model in the United States.
The model they are creating is similar to a bundled care delivery model. In their agreement, the Netherlands-based Royal Philips will provide GRMC with consulting services, advanced medical technologies, and operational performance, planning and maintenance services at pre-determined monthly costs, according to a news release last week announcing the agreement.
[See also: GHX awards top supply chain leaders]
“By collaborating with Philips, we're bringing all the stakeholders together at the same table to better assess and plan health care for tomorrow,” said David Hefner, Georgia Regents Medical Center CEO, in the news release. “It's no longer a simple supply-and-demand business model. Our goal is to foster an atmosphere of meaningful innovation that will have a significant and positive impact on the health of our patients.”
The alliance will affect all care areas of the Augusta, Ga.-based system and will give to GRMC access to Philips’ technologies, from lighting products to emerging healthcare technologies.
[See also: 5 supply chain metrics you need to watch]
According to The Augusta Chronicle, the agreement with Philips does not preclude GRMC from obtaining technologies from other companies. Hefner told the newspaper that Philips cannot provide every device or service needed and expects that Philips will provide about 75 percent of the medical technology the health system needs.
Hefner also told The Augusta Chronicle that the alliance will save an estimated $10 million over the life of the agreement.
“We have certain technologies and services and devices and monitoring and imaging that we are going to need over the next 15 years from somebody,” he told the newspaper. “We are going to trade off a form of exclusivity to reduce a lot of our costs. For our $300 million, we figure we are getting more than $400 million in value.”