IBM enters agreement with Central Norway Regional Health Authority to support healthcare system

At the Smarter Industries Symposium today in Barcelona, IBM (NYSE: IBM) announced it has entered into an agreement with Central Norway Regional Health Authority to provide information technology to support all hospitals in Norway and improve coordination and reporting of health information, logistics and finance. The agreement is estimated at $120 million USD.

As healthcare costs rise twice as fast as inflation in some countries and billions of dollars are wasted each year on duplicate lab tests, preventable conditions, and inefficient paper-based systems worldwide, countries are looking for new ways to reduce the complexity of their healthcare system and deliver better care to citizens. A new approach is emerging in which countries are working to create common systems and platforms to improve their nation's healthcare through more efficient exchange of health data and improved coordination of financial and administration functions.

Under this national framework agreement with Norway, IBM will provide finance and logistics, information integration, management, operations, maintenance and development of a new solution based on SAP. Over the next four years, health authorities throughout the country will upgrade their finance and logistics systems using IBM's SAP solution.

The integrated platform for healthcare is built on open standards and a common design to simplify the system and allow better collaboration and reporting among health authorities and the government. Central Norway Regional Health Authority will be the first region to adopt the solution starting with Ostfold Hospital in southeast Norway.

As part of plans to improve the nation's healthcare system, Norway's Ministry of Health and Care Services requires effective coordination of administrative support functions across the country. It selected the Central Norway Regional Health Authority to lead the procurement process on behalf of all health regions in the country.

"This is a good fit for us," said Bard Helge Hofstad, director of project management and staff at Central Norway Regional Health Authority. "The current ERP system is outdated and will be phased out within a few years and is therefore not maintained and upgraded to the necessary extent. A joint logistics and financial solution has the goal of better management of information and reporting, and opportunities for follow-up both within and between health regions. The solution will also enable efficiency through common standardized work processes and codes, as well as contributing to reduced costs and increased reliability through a common administration."

IBM competed with Accenture and its Oracle solution, and with Nordic company EDB Business Partner ASA. IBM was selected after an overall assessment of the following criteria:

• Solution suitability and support of procurement purposes
• The quality of project deliverables and performance
• Arrangements for governance, leadership and collaboration
• Management, operation and further development
• Price

By creating a more coordinated, integrated healthcare system, Norway is working to reduce costs and improve health outcomes.

"Our work in Norway is an important example of how IBM is building out powerful new systems around the world that improve the delivery of healthcare," said Dan Pelino, IBM general manager, healthcare and life sciences. "IBM has the systems experience, industry expertise and thought leadership to help our clients accelerate advancements in healthcare by creating a system that is more focused on the patient, outcomes and efficiencies."

IBM is creating a smarter, more connected healthcare systems that deliver better care with fewer mistakes, predicts and prevents diseases, and empowers people to make better choices.  This includes integrating data so doctors, patients and insurers can share information seamlessly and efficiently. IBM also helps clients apply advanced analytics to improve medical research, diagnosis and treatment in order to improve patient care and help reduce healthcare costs.