New York Presbyterian Hospital last week said it will turn over all information technology and telecommunications functions to an outside management company in a seven-year contract expected to be worth nearly $230 million.
First Consulting Group, a Long Beach, Calif.-based healthcare information systems consulting firm, will hire 432 of the New York hospital's current information services staff and supply additional personnel who have the know-how to upgrade and manage computer systems.
The arrangement is the third major outsourcing of a healthcare organization's entire information systems strategy and operation in recent months, following Detroit Medical Center and Brookline, Mass.-based Harvard Pilgrim Health Care (Oct. 18, p. 43; Oct. 25, p. 32).
Under the agreement with First Consulting, a newly formed unit called FCG Management Services will manage New York Presbyterian. The New York hospital will own 15% of the new company, which will seek additional information technology outsourcing agreements with hospitals, clinics and academic medical centers, according to a written statement from First Consulting.
In a business climate with stagnating revenues and a shortage of top-notch information systems professionals, "skill aggregation and the effective deployment of resources will offer leverage and economics that could not be obtained otherwise," said Guy Scalzi, formerly the hospital's chief information officer. Scalzi will manage operations as a vice president of FCG Management Services.