By Associated Press - Monday, January 11, 2016

PITTSBURGH (AP) - A Pittsburgh hospital is partnering with a Utah data analytics company to help hospitals save money by better calculating the cost of health care services.

Salt Lake City-based Health Catalyst plans to build a commercial version of cost management technology and analytics that were developed at UPMC. The technology analyzes huge amounts of data to precisely calculate what it will cost hospitals to provide tests, surgeries and other services.

Health Catalyst bought the intellectual property rights to the system and plans to develop and eventually market it to other health care providers, according to CEO Dan Burton.

UPMC’s chief financial officer Robert DeMichiei said UPMC is using the system in all of its Allegheny County hospitals after spending years developing and then testing it. Burton said this is what attracted the company to UPMC’s system.

“The fact that they’ve built a (system) that is in use across their entire enterprise is something we thought is very unique and very compelling,” Burton said.

DeMichiei said the system is scheduled to go live in the rest of the UPMC hospitals in March.

Gerard Anderson, director of the Johns Hopkins Center for Hospital Finance and Management, told the Pittsburgh Tribune-Review the fee-for-service health care system guarantees payment for every test and procedure that hospitals perform.

The system would create incentives for hospitals to more carefully consider which tests and procedures to perform and how to do them more efficiently, Anderson said.

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