2)
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Authorize the President of the Board to execute an Amendment (Amendment No. 11) to the Agreement with Siemens Medical Solutions USA Inc. for the Invision Health Information System at the San Mateo Medical Center, and extending the Agreement through October 1, 2015, and amending the not to exceed amount to $11,400,000;
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In September 2003, the Board approved Resolution Number 066265, which authorized a 7-year Agreement between the SMMC and Siemens Medical Solutions USA Inc. (Siemens) for a core health information system and related ongoing systems support. The purpose of the core system is to provide patient care providers with a single electronic system that will contain the majority of clinical and financial information for patients and clients of SMMC. The term of the 7-year Agreement began in 2003 and is set to expire in 2010. Replacement of an equivalent hospital information system would take 18-24 months and have an estimated cost of $3-4.5 million, while SMMC would still be responsible for the cost of the Siemens system during the selection and implementation of a new hospital information system.
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In exchange for a reduction in the monthly cost of services provided for the remaining two years of the current agreement and the other benefits listed below, the Amendment would (a) add an additional 5 years to the Siemens Agreement, extending the expiration date to 2015, and (b) slightly modify the language associated with (i) the termination of the agreement based on an unavailability of funds and (ii) the minimum monthly processing requirement fees. The reduced monthly costs would be extended over the additional 5-year period. The cost savings negotiated with Siemens over the current Agreement rates, if the current rates were extended until 2015, would be $1,600,000 by 2015, with savings of $46,779 in FY08, $77,307 in FY09, $78,240 in FY10, $179,715 in FY11, $269,749 in FY12, $282,304 in FY13, $295,450 in FY14, $309,169 in FY15 and $69,738 in the final year of the Agreement.
The proposed Amendment to the Agreement incorporates several benefits besides cost reductions including: discounts for future purchases both in terms of license fees and support fees; annual increases in processing fees limited to the CPI or 4%, whichever is less (under the current Agreement there is no cap) and extension of the 500,000 professional service hours pool obligation for 36 months to expire in 2012 (under the current Agreement the County must use these hours by March 2009, or pay Siemens for the unused balance). The County Manager approved a waiver extending the current Agreement an additional 5 years to 2015.
County Counsel has reviewed and approved the Amendment, Memo, and Resolution as to form. Risk Management has also reviewed and approved the Amendment. The Contractor has assured compliance with the County's Contractor Employee Jury Service Ordinance, as well as all other contract provisions that are required by County ordinance and administrative memoranda including, but not limited to, insurance, hold harmless, non-discrimination and equal benefits.
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The Amendment would extend the term of the Agreement to October 2015, and would implement a new not to exceed amount of $11,400,000 for the remainder of the extended Agreement (separate from the $8,500,000 already paid).
The projected savings of $1,600,000 over the duration of the remaining term and the new term is achieved through 2 primary components:
• Annual RCO and software maintenance fee savings of $1,000,000
• Financial applications fee discount of $600,000
Additional savings will be achieved through guaranteed minimum discounts for new applications and hourly professional service fees. Current fiscal year funding for this Agreement is included in the ISD 2008 – 2009 Recommended Budget.
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