Can IBM Ease Health Care Industry’s Pain?

IBM will invest $250 million over the next three years to find ways that health care companies can rein in costs.

Initially, the Armonk, N.Y., IT giant will hire health care specialists and collaborate with Duke University Health System and the Moffitt Cancer Center & Research Institute.

The partnerships will produce IT-managed software and services to integrate patient records and lab tests with research data on breast, heart and lung cancer. With it, doctors and administrators will be able to electronically pre-screen candidates for trials.

Theresa Gaffney, an IBM global health care segment executive, said between 30 percent and 35 percent of the industry’s $1.7 trillion price tag relates to paper-based administrative costs.

“(IBM’s health care push) about getting the administrative burden reduced, automating more processes to take costs down,” she told “It’s also about how you can give a nurse more time on the patient, and help the patient get better
and get home faster and not be tied down on all these administrative tasks.”

IBM’s health care efforts are part of its overall strategy to focus on industry-specific services and software, as opposed to generalized solutions requiring extensive customization. Earlier this month, IBM rolled out middleware products catering to the financial

The belief that it would need to provide customized software and services led the company to a software division overhaul in December 2003. Instead of all-encompassing middleware, IBM is now beefing up its presence in 12 industry verticals, one of which is the health care.

The others are: insurance, banking, financial markets, automotive, retail, consumer package goods, utilities, telecom, electronics, government and life sciences.

While the fruits of IBM’s collaboration with Duke and Moffit won’t be realized until later this year, Gaffney said, the company is rolling out services today to address healthcare management.

They include: a best practices offering to improve resource allocation, planning and rollout; management services to help hospitals integrate clinical, research and administrative information; and a forum for health care providers to discuss the latest research in IT quality improvement and efficiency.

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