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LVHN inks deal with Medtronic to cut $100M in costs, improve clinical outcomes

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Dr. Brian Nester, president and CEO, Lehigh Valley Health Network, (left) and Omar Ishrak, chairman and CEO, Medtronic, at a press conference Wednesday. (Contributed).
Dr. Brian Nester, president and CEO, Lehigh Valley Health Network, (left) and Omar Ishrak, chairman and CEO, Medtronic, at a press conference Wednesday. (Contributed).

Lehigh Valley Health Network announced it formed a five-year strategic partnership with a global medical technology company to find ways to cut costs by $100 million while improving clinical outcomes.

Medtronic, headquartered in Dublin, Ireland, is one of the world’s largest medical device makers.

The idea is to bring together Medtronic’s technological and operational expertise with LVHN’s clinical expertise to improve patients’ health while reducing costs, a model known as value-based health care.

The initiative will create programs, technology and services that cover more than 70 major medical conditions and reach as many as 500,000 patients. Some of the first programs will address cardiovascular disease, stroke and lung cancer, conditions where LVHN is seeing rising numbers of patients and increasing costs.

The partnership between Medtronic and LVHN could serve as a template for the health care industry, which is shifting away from a payment-for-services model and instituting value-based health care.

“By working in partnership, trusting each other and combing out expertise, we will create new models of care that are more connected and coordinated,” Omar Ishrak, chairman and CEO of Medtronic, said in a statement.

“Ultimately, these value-based programs will contribute to a more sustainable health system and a healthier community,” Ishrak said.

LVHN, which has expanded over the last decade, is undergoing financial constraints as it faces increased competition and declining reimbursements. In February, LVHN cut 70 management positions.

“As LVHN continues navigating the daunting challenges in today’s health care environment, we are actively searching for new approaches and partners for providing better care and better health at better cost to our community,” said Dr. Brian Nester, president and CEO of LVHN.

Medtronic and LVHN will initially develop programs in 10 to 15 health conditions. Some of the areas include making the bariatric surgery vetting process more efficient and thereby increasing the number of patients; detecting respiratory compromise earlier in patients and reducing the number of related adverse events by 20 percent using a Medtronic device; and building a model for diagnosing and treating lung disease more efficiently and effectively through Medtronic’s data analysis and equipment.

The two companies will develop a data collection and analysis system that will enable to measure results and improve outcomes and economic value.

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