IBM, UPMC Add Watson AI to Medical Supply Chain With Pensiamo

The University of Pittsburgh Medical Center formed an independent supply chain company, Pensiamo, with IBM as minority equity owner.

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IBM continues to push its cognitive agenda, now with a focus on delivering cognitive computing technology to the medical supply chain.

IBM has joined forces with the University of Pittsburgh Medical Center (UPMC) to inject cognitive analytics into the supply chain, including taking a minority stake in Pensiamo, a new company UPMC formed to help hospitals improve their supply chain performance with a source-to-pay solution.

Spread across the Pittsburgh metropolitan area, UPMC is one of the country's biggest health care systems with $12 billion in revenue. Though IBM will retain a piece of Pensiamo, UPMC will be the majority owner of the Pittsburgh-based company and also will be the initial customer under a long-term contract, IBM said.

"At a time when patients are demanding higher quality and value, traditional approaches to providing health care supply chain services are no longer sufficient," James Szilagy, who will transition from his current position as chief supply chain officer for UPMC to the role of CEO at Pensiamo, said in a statement.

Szilagy said Pensiamo will combine UPMC's long-term experience with the health care supply chain with IBM's expertise in non-medical procurement services. Added to that will be IBM's Watson cognitive computing technology. In this instance, the company will feed data from UPMC into Watson to build up its knowledge base with best practices and domain expertise from the medical center.

"The aim is to offer providers a supply chain management approach tailored to each institution's specialties, patient population and other unique needs, and which will learn and respond over time to the changing needs of the business," Szilagy said.

For health care providers, supply chain costs are the second-largest and fastest-growing expense behind labor costs, according to IBM.

"IBM brings substantial experience providing procurement services and applying Watson technology to clinical care and research," Jesus Mantas, general manager of business consulting at IBM Global Business Services, said in a statement.

Indeed, IBM has applied Watson to the ongoing battle against cancer. In April, IBM and the American Cancer Society (ACS) announced a partnership to develop a Watson-based advisor for people fighting cancer—to bring the cognitive power of IBM's Watson, not only to physicians treating cancer, but to those suffering from the disease.

With Watson's cognitive capabilities, Pensiamo will be able to provide a new category of cognitive supply chain services, Mantas said. Unlocking new insights from the volumes of structured and unstructured data existing on medical products and treatments will improve decision making across the purchasing process, he said.

IBM's UPMC partnership comes just over a week after IBM inked deals with both Cisco and Denmark-based ISS to use Watson with their collaborative solutions and facilities management offerings, respectively.

IBM and Cisco on June 30 announced plans to partner and integrate their collaboration tools and add some cognitive technology to the mix to help transform the way people work.

IBM is integrating Cisco's Spark and WebEx collaborative workspace platforms with IBM's cloud-based Connections and Verse collaboration solutions to form a suite of tools that will tap into the power of IBM's Watson cognitive computing system to help users gain insights from information that they have access to.

Meanwhile, ISS said it will use Watson IoT to help manage more than 25,000 buildings around the world. The Watson IoT platform enables developers to build applications for the Internet of things more quickly and easily. IBM's Watson IoT unit also provides IoT-related business consulting and technology services for customers.