Telecommunications giant AT&T Corp. is offering a package of telephone and data transmission services to members of the VHA hospital alliance at discounts of 30% to 50% off the market price.
The five-year contract with AT&T was announced at the alliance's leadership conference last week in Orlando, Fla.
The deal covers long-distance and local telephone services, data network services, Internet access, teleconferencing and operator-assisted services. Savings off standard prices are expected to total $55 million for VHA members.
An existing contract with AT&T offers discounts on long-distance and 800-number services to 450 healthcare organizations participating in the Irving, Texas-based alliance, said Kevin Hutchinson, VHA's vice president of healthcare information technologies. Those rates dropped 30% under the new contract effective May 1, he said.
In return for the cheaper rates, VHA will guarantee a dollar volume of more than $500 million during the contract term. Hutchinson said the agreement calls for VHA to pay penalties if dollar volume falls short of expectations, but he added that "the risk is so low that we don't anticipate a problem."
If all the VHA members currently under contract renew their agreements, VHA would meet the $500 million target, Hutchinson said.
The attraction for AT&T is to establish itself in the healthcare market as a company with emerging telecommunications capabilities, which are considered beneficial, even necessary, to build and run integrated delivery networks efficiently, said Rick Ratliff, vice president of marketing and operations for VHA's healthcare information technologies unit.
AT&T's recent purchase of IBM Global Services will result in further savings to participants in a VHA on-line service called VHAseCURE.net once the nationwide IBM communications network is integrated into AT&T, Ratliff said. The services will then be available directly through AT&T.