IBM (IBM) Executive Interview: Mr. Daniel S. Pelino - General Manager, Health Care And Life Sciences Division
November 18, 2011 - The Wall Street Transcript has just published Health Care IT Report offering a timely review of the sector. This Special Report contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. Please find an excerpt below.
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Daniel S. Pelino is the General Manager, Healthcare and Life Sciences, at IBM. He is responsible for the strategic direction of IBM's global health care and life sciences business. He leads his team in developing the latest information technology solutions and services, establishing partnerships and overseeing IBM investments in the health care, pharmaceutical and life sciences markets. In this role, Mr. Pelino works closely with leaders in health care and life sciences, including public and private health care providers and payers, and biotech and pharmaceutical companies, helping them leverage IBM capabilities to address issues facing the industry. Mr. Pelino received his master's degree in organizational communications and his B.S. in business administration and public relations from Western Kentucky University. He joined IBM in 1980.
TWST: What are the major health care solutions you focus on?
Mr. Pelino: Visualize a triangle. At the bottom of that triangle, you have to have a dynamic, virtualized, rationalized infrastructure. What does that mean? That means that your servers, your storage devices where you store your images, where you have your EMR, that kind of thing, depending on the size of health care delivery systems, between 75 applications and 250 applications are running at anytime. Now, multiply that number of applications times of number of instances - a test would be an instance, your run would be an instance, your pilot would be an instance.
There are roughly six instances for every application. On top of that, you have physicians that say, "I want my own cardiology system, I'd like to have my own oncology system, I'd like to have my own diabetes system," and now you're charged with building an integrated delivery system that is based on the patient across your entire delivery system enterprise. What a challenge!On top of that, each department is different. And why is that? It's because they have not rationalized and built a dynamic infrastructure. From a technical standpoint, when you get under the covers of building this infrastructure layer, you see tremendous levels of inefficiency. Servers that are dedicated to ISVs are running at 10%, 12%, 15%, 20% optimization. Costs are higher than you would need to if you could micropartition the software. .
For instance, many of the ISVs and the database companies that are out there today charge by processor, and if your processor is defined by something that is very large and it's running at 12% to 15% optimization, you're paying for all of that capacity and you are only using a small part of it. So the first step is to be able to build that dynamic, virtualized infrastructure where you can rationalize it. You can start to micropartition the work within servers, taking your cost down significantly and building out the integration that you need around patients.
That first step of building that dynamic, virtualized, optimized, rationalized infrastructure is an area that IBM (IBM) does extremely well with. There is probably no other company that knows how to do that work better than IBM - actually, we work with 1,400 business partners, so we're working with all the Epics and the Cerners and the McKessons and the Siemens and the companies that provide the solutions to all of these hospitals. That is why the largest systems out there today trust IBM to manage their infrastructure for them.
TWST: If a client works with you at the infrastructure level, for example, do you find that they are more likely to continue to use your solutions as they go up the pyramid?
Mr. Pelino: A couple of things. One is, we are open in our approach. Our infrastructure is open. We're not selling applications, and so we sit at a different seat at the table. We are helping the client, the hospital system, the health plan look across what are the best solutions for them, and we have frameworks that we provide to them that have the specialty adaptors. Whether it's health plan data - which is X12 data or clinical data, which is HL7 data - we help them look at that foundational framework to say, "how do we make sure we don't overspend to get the right kind of capability, what are the right partners that you could bring in, and then how do you connect this?" We are looking at not only the continuum of care, but we're looking how do you make sure that it's centered around the patient and ensure they have that right kind of experience.
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