Royal Philips and Marin General Hospital (MGH) announced a $90 million, 15-year partnership yesterday to improve health care in Marin County, California. This is Philips’ third partnership with a hospital in North America in the past six months, but this is its first partnership with an independent community hospital.

“Health care today is changing so fast that no one player in the health care ecosystem can innovate fast or effectively enough to achieve the transformation we all need,” Matt Bierbaum, vice president of managed service and enterprise partnerships at Philips, told HCB News. “For Philips, that means that we have to "co-innovate" with our provider partners in order to create a better health care future.”

The partnership is based on an enterprise-managed service model, in which Philips will provide the hospitals with a range of advanced medical technologies including imaging equipment, patient monitors, telehealth and clinical management solutions, clinical education, consulting, and design services.

“We will have a view of where things are going [in the industry] so that we are prepared for the technological shifts that are going to come without having to do rip-and-replace types of activities because of the way this deal is structured,” Mark Zielazinski, chief information and technology integration officer at MGH, told HCB News.

There is a growing trend among hospitals and health systems to partner with large OEMs to better manage the cost and complexity of their technology investments and improve access to advanced medical care. Philips entered into a $300 million, 18-year partnership with Mackenzie Health in November and a $500 million, “multi-year” partnership with Westchester medical Center Health Network in June.

“I believe that in a decade or so this will be how hospitals will acquire equipment,” said Zielazinski. “[With the traditional model], you are contracting something that you won’t take the delivery of for three years or longer and you are trying to guess what is going to happen; and you end up spending a lot of money because things change over that three-year threshold.”

He added that with the new model those changes are all accounted for in how the process gets governed and managed over time. Because of that, it won’t incur any additional cost and the hospital will have access to the new technology that is coming down the pike.

In similar long-term partnerships with Philips, hospitals and health systems have been able to significantly improve their radiology volumes and reduce MR wait times by half, according to Philips. Those organizations have been experiencing a 35 percent reduction in technology spending, while also improving clinical quality.

Bierbaum noted that there has been a great deal of interest in Philips’ managed services and partnership solution. He described it as a “flexible vehicle that allows them to mitigate risk and share the responsibility for providing value.”

“Health care management has simply gotten too expensive and complex for health systems to take on alone,” he wrote. “Pioneering health care leaders like Marin General understand that the only way to innovate fast enough to significantly bend the cost curve and improve patient outcomes is to do so with the support of a strong partner ecosystem.”

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