| March 26, 2001
Strategic Alliance
Nets $16 Million Savings at UPHS
Agreement sets the stage for cooperative research
and visiting partners program.
(Philadelphia, Pa.)-The
University of Pennsylvania Health System (UPHS) announced
it has formed a strategic alliance with Siemens Medical
Systems, Inc. designed to save the Health System as
much as $16 million over eight years and set the stage
for innovative and cooperative research.
Under the terms of the alliance's purchasing agreement,
UPHS will make an initial purchase of cardiology, radiology
and radiation oncology equipment from Siemens. The agreement
has two primary components: UPHS can purchase Siemens's
diagnostic equipment at contractual discounts based
on the compliance levels of future purchases of diagnostic
equipment.; and Siemens, a leading manufacturer of medical
and diagnostic tools, has also agreed to service and
maintain biomedical equipment already in place at designated
UPHS sites over the life of the agreement.
In addition, UPHS and Siemens are developing joint research
programs and a visiting partners program. As part of
the Visiting Partners program, UPHS and Siemens will
share executives on selected projects and hold joint
educational sessions on issues of mutual concern. Executives
from UPHS and from Siemens will meet quarterly to review
the agreement.
Research projects will be developed over the next several
months on a department-by-department basis and are expected
to get underway later in the year.
"This is the kind of alliance that will be critical
in our continuing financial recovery and to assure our
position as a leading national health system,"
said Robert D. Martin, Ph.D., Chief Executive Officer
of UPHS. "Our alliance offers ample incentive for
us to work with Siemens to explore avenues for further
collaboration. It is a blueprint for a meaningful and
mutually beneficial relationship that we will turn to
again as we move ahead."
Thomas N. McCausland, president and CEO of Siemens Medical
Systems, Inc., notes that, "innovations like this
strategic alliance are an important and prudent by-product
of the evolving health care environment. UPHS has long
been at the forefront of advances in medicine and we're
looking forward to working with a world-class institution
to provide excellent health care."
"Working together, we've crafted an alliance that
is based on more than purchasing services," said
William Ferniany, Ph.D., senior vice president of Administrative
and Network Services. "Siemens's understanding
of the healthcare marketplace and their willingness
to be an innovative and progressive participant adds
real value to our alliance."
The alliance, which has been in its formative stages
for more than a year, was developed in conjunction with
the consulting group Akin, Gump Health Strategies, LLC.
"We are delighted to have had the opportunity to
assist UPHS in designing and implementing a unique transaction
for the purchase and servicing of capital equipment
that will contribute to UPHS' overall financial recovery,"
said Philip D. Green, of Akin Gump. "The Siemens
strategic alliance reflects a true partnership among
clinical leadership, administration and a pre-eminent
equipment and service vendor to improve quality and
reduce costs."
The University of Pennsylvania Health System was established
in 1993 as the nation's first fully integrated academic
health system. It is comprised of the University of
Pennsylvania Medical Center [Penn's School of Medicine,
the nation's first medical school;and the Hospital of
the University of Pennsylvania (HUP), the nation's first
teaching hospital], Pennsylvania Hospital (the nation's
first hospital), Presbyterian Medical Center, Phoenixville
Hospital, as well as educationally-affiliated hospitals,
multi-specialty facilities, a primary-care provider
network, and home health, hospice, and long-term care.
The University of Pennsylvania Health System, is committed
to excellence and innovation in patient care, medical
education and research. This year, the Hospital of the
University of Pennsylvania was named one of the country's
top-ten "Honor Roll" hospitals by U.S. News
& World Report in that magazine's annual survey
of the best hospitals in America. In another survey
by that magazine, Penn's School of Medicine was ranked
number three in the nation. In addition, the School
of Medicine has been ranked number two in nation in
terms of research funding granted by the National Institutes
of Health (NIH) - perhaps the single most important
barometer of research strength.
Based in Iselin, NJ, Siemens Medical Systems, Inc.,
is the US affiliate of Siemens Medical Solutions, Erlangen,
Germany. The company offers complete
integrated solutions comprising innovative medical devices,
advanced information technology, as well as consulting
services that increase efficiency of the healthcare
system while improving the quality of care to patients
worldwide. In fiscal 1999/2000, Siemens Medical Solutions
reported new orders of 5.3 billion Euro ($5.65 billion
in US dollars), sales of 5.1 billion Euro ($5.44 billion)
and employed 27,000 worldwide.
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