Dive Brief:
- UPMC announced Friday its launch of Pensiamo, a Pittsburgh-based independent supply chain management company.
- The new venture aims to help hospitals improve their supply chain performance through cognitive analytics performed by IBM Watson Health technologies.
- UPMC will own a majority of the new company and be its initial customer, while IBM will be a minority equity owner.
Dive Insight:
The new venture is positioned to take advantage of growing concern over supply chain costs--providers' second-highest and the fastest-growing expense after labor costs.
The arrangement is groundbreaking in being the first healthcare supply-chain venture to apply such technology and being Watson's first foray into the realm, and first time connecting clinical and operational insights, as Modern Healthcare noted.
IBM added that according to the Institute of Medicine, almost one-third of healthcare spending is currently waste, in a time when pressure is mounting to better control costs alongside improving care. Watson's technologies can help providers understand costs at a patient-specific level and better succeed under performance-based payment systems, IBM said.
"The aim is to offer providers a supply chain management approach tailored to each institution’s specialties, patient population and other unique needs, and which will learn and respond over time to the changing needs of the business," said UPMC chief supply chain officer James Szilagy, who will move to serve as CEO at Pensiamo.