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July 09, 2016 01:00 AM

UPMC teams with IBM's Watson on supply-chain venture

Adam Rubenfire
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    UPMC is enlisting the help of IBM's Watson computing system to launch an independent company tasked with managing hospitals' supply-related spending.

    The Pittsburgh-based health system, which has invested heavily in supply chain operations, will own the majority of the for-profit company named Pensiamo. It will manage clients' entire supply-chain operation, including sourcing, contracting, purchasing and payment for drugs and supplies. Pensiamo will offer supply-chain strategies based on insights derived from Watson's cognitive analytic abilities. Armonk, N.Y.-based IBM will be a minority owner.

    The new company is further evidence of providers' growing scrutiny of their second-biggest cost after labor. But Pensiamo, which means “we think” in Italian, is the first to apply Watson's technology to its decisions. The marriage brings together a provider known for its massive, innovative supply-chain operation and the computing abilities of IBM, which has managed over $7 billion in supply spending in several industries other than healthcare.

    Watson will provide advanced analytics to inform and automate a number of processes, including purchasing. The system will grab from structured data like electronic health records, published clinical research and even unstructured data such as physician notes. The goal is more efficient decisionmaking.

    The system could also offer assistance in many other business processes, including logistics and helping with predictive planning for ordering and distribution of supplies across a health system. And Watson won't just alert employees to problems like a forthcoming product shortage—it could also find a solution, such as using or purchasing alternative products or moving product from other locations, said Dave Liederbach, a vice president with IBM Watson Health.

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