Providence St. Joseph Health, Microsoft form strategic alliance to leverage cloud, AI technology

Providence St. Joseph Health has formed a multiyear strategic alliance with tech giant Microsoft to modernize its health IT infrastructure across its entire system and leverage cloud and artificial intelligence technologies to improve health outcomes and reduce the total cost of care.

The two organizations will work together to modernize Providence St. Joseph Health's IT infrastructure, particularly around informatics as well as its business infrastructure, Rod Hochman, M.D., president and CEO of Providence St. Joseph Health, told FierceHealthcare.

"All of us recognize that healthcare has been slow to this modernization and other industries have moved ahead at a more rapid rate," he said. 

The 51-hospital health system serves 10 million patients a year across seven states and operates more than 900 clinics. The Renton, Washington-based health system is in Microsoft's backyard, Hochman said, opening an opportunity to collaborate and transform the care experience.

The health system plans to deploy next-generation solutions and emerging technologies from Microsoft and its partners at a hospital facility in Seattle, Washington, near Microsoft’s Redmond headquarters. A specific facility site has not yet been announced. The goal will be to scale these innovations across the entire Providence St. Joseph Health system to bring innovative and necessary solutions to more communities.

"This is the most comprehensive partnership between a technology company and a health system," Hochman said.

Satya Nadella, CEO of Microsoft, said in a statement that the goal of the partnership is to accelerate Providence St. Joseph Health’s digital transformation and to "build new innovations together that are designed to improve health care delivery and outcomes."

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The two organizations will develop a portfolio of integrated solutions designed to improve care delivery by combining technologies from Microsoft with Providence St. Joseph Health’s data and clinical expertise. The alliance will accelerate the healthcare industry’s adoption of the cloud and enable data-driven clinical and operational decision-making by leveraging Microsoft Azure, and industry interoperability standards like FHIR, to integrate siloed data sources in a cloud environment that enables security and compliance, the organizations said.

“At Microsoft, we believe that engaging a range of partners across the health care ecosystem will be required to improve the value of care that is provided,” Peter Lee, Ph.D., corporate vice president at Microsoft Healthcare, said in a statement. “With Providence St. Joseph Health, we believe we can work together to address many of the most difficult problems that affect the health care industry by combining Microsoft’s research, cloud, and productivity capabilities with Providence St. Joseph Health’s clinical expertise.” 

Hochman said there are several key elements to the strategic alliance which will develop over the next five years: "The first is to heavily support our clinicians in making them more productive and to develop collaboration tools to make clinicians more effective, beyond what can do with their electronic health records."

RELATED: Providence St. Joseph Health acquires Epic IT solutions consultant Bluetree 

As part of the strategic alliance, Providence St. Joseph Health will use Microsoft Azure as its preferred cloud platform and standardize productivity and collaboration tools for its 119,000 caregivers on Microsoft 365. Health system doctors and nurses will use Microsoft Teams for more secure communication and collaboration, the organizations said.

The health system plans to work with Microsoft to modernize its revenue cycle IT platform to become more efficient and reduce administrative costs. Providence St. Joseph Health will also transition out of eight data centers to a more flexible, secure cloud environment and harness cloud computing and analytics, Hochman said.

The IT modernization will also improve the care experience for consumers, Hochman said: "Consumers want their experience in healthcare to be a little bit more integrated, to say the least. This work will enable doctors, clinicians and nurses to have as much information at the point of care as possible."

By working with Microsoft to leverage AI, the health system will be able to tackle "low-hanging fruit," Hochman noted: "We think AI is going to be tremendously helpful, particularly in clinical decision making, orthopedics, the neurosciences, and cancer, and being able to combine research and AI to accelerate it."

The strategic alliance with Microsoft also ties into the health system's focus on nonclinical projects within its business. In February, Providence St. Joseph Health launched Ayin Health Solutions, a population health company, to offer expertise to help payers, providers, employers and government entities with the shift to value-based care. 

RELATED: HIMSS19: Providence St. Joseph Health acquires revenue cycle management blockchain startup

It also recently announced plans to acquire Bluetree, an Epic consulting and strategy company that helps healthcare providers maximize their return on their electronic health record investment. The health system also owns Engage, which has grown to become one of the largest Meditech solution companies in the United States, according to the health system.

The health system acquired Seattle-based Lumedic, a revenue cycle management company based on blockchain technology, with the aim of streamlining data sharing and improving claims processing.

Mike Butler, PSJH's president of strategy and operations, told Xconomy that the Bluetree deal is part of the health system's plan to create a billion-dollar company from its nonclinical projects. The health system expects the company to produce 20% EBITDA by 2023. Annual revenue so far is $44 million for Engage and $15 million for the Community Connect business, according to the Xconomy article.

"We’ve recognized in our own organization that besides providing direct healthcare it's important for healthcare organizations our size to also be a service organization," Hochman said. "The things that come out of the Microsoft partnership to facilitate clinical and business operations for our health system could be exportable to other health systems to improve the administrative back office as well as clinical tools and AI to transform healthcare."