IBM signs $380M outsourcing pact with three NYC hospitals

Computerworld - NEW YORK -- IBM today announced that it has signed its largest-ever hospital outsourcing pact, a $380 million deal to manage the core computing systems of three New York City hospitals: Mount Sinai Hospital, New York University Medical Center and NYU Downtown Hospital.
Dave Liederbach, IBM's vice president for the health care industry, said the company will host all of the clinical and business applications for the three hospitals and provide disaster recovery/business continuity systems outside of Manhattan.
"We're basically facilitating a restructuring and separation of their IT infrastructure," he said.
During the next 18 months, Liederbach said, IBM will transfer the hospitals' applications from a Manhattan data center at Mount Sinai to redundant data centers in Staten Island and Rochester, N.Y. The move is designed to ensure continuity of operations of vital hospital systems in the event of another terrorist attack in New York City, among other things.
The Sept. 11, 2001, terrorist attacks destroyed NYU Medical Center's data center, which was near the World Trade Center.
The three hospitals have run consolidated IT departments for the past several years, after all three joined under the nonprofit, tax-exempt Mount Sinai NYU Health holding company in 1998. Currently, the three share a data center at a Mount Sinai location in upper Manhattan.
In explaining the decision to divide the current IT structure, Richard Donoghue, senior vice president for strategy and business development at NYU Medical Center, said the three hospitals appeared to be going in different directions. "The demands placed on the IT department by the hospitals were pulling the IT leadership in different directions and creating problems for both the hospitals and the IT department."
Liederbach said he doesn't know how many applications IBM will host and support but noted that it could "run into the hundreds of applications."
The deal with the three hospitals also includes an agreement to conduct joint research projects in information-based medicine and medical imaging, areas in which IBM and the hospitals can share already well-developed expertise, Liederbach said. The three hospitals have more than 1,200 beds among them and treat more than 83,000 patients each year. Mount Sinai alone treats close to a half-million emergency room patients per year.
The three contracts, which go into effect July 1, call for the following:

• Mount Sinai is handing over its entire IT infrastructure to IBM, including application management and development, mainframe and distributed systems, help desk and desktop support, and networking and telecommunications, according to Liederbach. A small internal IT staff will manage the outsourcing relationship. That contract is for 10 years.


• NYU Medical Center is handing over everything except telephony and application development and management, NYU's Donoghue said. The contract is also for 10 years.


• NYU Downtown Hospital has an arrangement similar to that of NYU Medical Center, except that its contract is for just two years, with options for extending it, Liederbach said.

Read more about outsourcing in Computerworld's Outsourcing Knowledge Center.