Risk-sharing relationship targets $1 billion in operational efficiencies.
Delivering healthcare cost effectively is a challenge and across the country. To help span the funding gap and support healthcare delivery, GE Healthcare and Jefferson Health made public an eight-year, shared-risk relationship aimed at generating from $500 million to $1 billion in efficiencies and avoided operating costs.
The goal of the long-term collaboration, said the joint announcement, is to “create a forward-looking, robust health system by removing redundancies and maximizing sourcing efficiencies.” To reach their shared goals, Jefferson Health and GE staff will work together across the extensive Jefferson University system “to acquire a deep understanding of operations and processes.”
“To prepare for the launch of this multi-year relationship,” said Kathleen Kinslow, Jefferson Health’s Chief Integration Officer, “some of GE Healthcare’s senior-most leaders have been onsite, working closely with us to ensure we’re doing all we can up front to position all of us for long-term success … they have become valued members of our extended team and their level of engagement has been exceptional.”
GE Healthcare said the contract with Jefferson Health is among five it holds with health systems and is the company’s largest to date. Framed as a shared-risk model, the two entities said the contract represents both companies economic interests, with each required to meet “critical” milestones. A portion of its fees and income, said GE, is contingent on how successfully the company executes on the relationship’s shared operating cost containment and integration goals.
“With the healthcare industry facing unprecedented levels of patient demand and increasing cost pressures,” said John Flannery, incoming CEO and Chairman-elect of GE, “it’s great to see health systems like Jefferson seek new and innovative ways to improve better outcomes for patients,” he continued. “This collaboration, which is financially tied to our shared success, demonstrates the confidence we have to jointly deliver world-class health care for the community.”