UPMC, Health Catalyst Merge Forces to Cut Healthcare Charges

University of Pittsburgh Medical Center needs to promote and commercialize its cost management technology that measures the real charges of healthcare delivery, and is grouping with analytics vendor Health Catalyst to do it.

As the industry transformations to value-based payment, contributors must be capable to better comprehend the charges of delivering care and how to price facilities if they are to be economically viable. Although, the issue—in accordance to UPMC and Health Catalyst executives—is that healthcare has struggled to rightly calculate the price of its activities and services due to the complications of disease and inability to logically share, store and observe information.

The solution, they claim, is an activity-based cost management system established by UPMC and matched with Health Catalyst’s enterprise data warehouse infrastructure, analytics expertise, and professional facilities.

“Our foundational cause for existence as a company is to enable measurable result improvements to help resolve the issue of inefficiency in healthcare,” states Dan Burton, CEO of Health Catalyst. “It is a trillion dollar issue—30 cents out of each dollar is wasteful—but in case to decrease that you have to have an accurate view of your price structure.”

Health Catalyst is licensing technology, content and analytics established by UPMC with the intention of commercializing these creations to further improve UPMC’s price management programs. The objective is to finally enable other health networks to accurately measure and observe the true costs of healthcare delivery for each of their sufferers.

Robert DeMichiei, executive vice president and CFO at UPMC, calls the capability to compare results and costs across a sufferer’s complete care experience—and to then in turn adopt great practices that improve quality while decreasing spending—the “holy grail” of healthcare. “We are putting together both the economical and the clinical tasks into 1 database, so that we are capable to now assign the prices through the clinical drivers,” he states. “We now know what prices have been incurred for the profit of a particular sufferer, particular surgery, particular procedure, as well as the work that particular physicians are doing.”

In accordance to DeMichiei, UPMC 1^st executed its cost management tool in the year 2014—leveraging quality data with physician- and patient-specific cost data—and in the procedure was capable to alternate clinician behavior resulting in improved care at lower charges.

“The partnership with Health Catalyst offers us the chance to commercialize this technology and gives a platform to take it nationally with a greatly respected healthcare IT agency,” elaborates DeMichiei. “This is a homegrown network and that is not something years from now that I needed to be worrying about in terms of maintenance and upkeep.”

As part of the agreement, UPMC workers that worked on the cost management technology over the past 4 years are now Health Catalyst workers.

“They have outsourced cost management to us from a group perspective as well as from a technology view,” states Health Catalyst’s Burton. “So, as we establish a commercial grade version of what we bought from UPMC combined with what we have established already, they will have an enterprise license to utilize that technology and the group that is in area to manage all their cost management requirements.”

Health Catalyst will establish the 1^st version of a commercialized software application that will be stepped out at UPMC this year, which will elaborate and maintain its effectiveness before becoming commercially present.