Microsoft Signs Up Providence Hospital Chain as Cloud, AI Customer

Dina Bass and John Tozzi (Bloomberg) -- Microsoft Corp. signed Providence St. Joseph Health as a customer of its Azure and artificial intelligence tools to help the hospital chain track electronic health data such as surgery outcomes and cancer therapies.  

Providence, which operates hospitals in seven U.S. states, will shift data and applications from its own data centers to Microsoft’s cloud as part of the five-year agreement. The company’s 119,000 doctors and caregivers will also get access to Microsoft’s Office productivity software and its Teams chat service. 

Microsoft is wooing health-care and retail companies to try to catch Amazon.com Inc., the largest provider of cloud computing services. This latest deal is also an attempt to use rented data storage, computing power and AI software to modernize hospitals. Tech companies have long promised that digitizing health records would improve patient care, but progress has been halting. The bet now is that aggregating clinical data in the cloud will finally help deliver on this promise. 

“All of us as patients want our doctors and nurses to be as smart as possible when they’re making decisions,” said Providence Chief Executive Officer Rod Hochman. “This is bringing information to them at the point of care that they need to make decisions. That will manifest itself in better outcomes.”

Health-care providers are forecast to spend $11.4 billion on public cloud services this year, according to market research firm IDC. Amazon and Google are also pursuing cloud deals in the industry. Amazon is working with Beth Israel Deaconess Medical Center in Boston to test how AI can simplify medical care. Google is applying AI software to health data to make better predictions. 

In the past year, Microsoft has also struck cloud deals with companies such as Kroger Co. and Walgreens Boots Alliance Inc. The agreements often include plans to use Microsoft AI to build new applications. Some customers aim to sell or share these new programs with other companies in their sectors. Providence is looking to do this, too. 

“These are possibilities that get unlocked once we have the infrastructure modernized,” said Peter Lee a corporate vice president at Microsoft Healthcare. 

AI software can improve with little or no input from human coders. The technology is increasingly adept at spotting patterns and gleaning other insights from large amounts of data. This has great potential in health care. 

For example, Providence St. Joseph wants to use AI and other software to analyze information on surgical procedures, their outcomes and costs.  The goal is to better understand why the cost and quality of similar procedures can vary across its 51 hospitals and hundreds of clinics, Hochman said. Even common procedures like knee replacements, performed thousands of times each year, can have disparate results for patients within the same health system. Hospital leaders are sometimes baffled by the variation.

“Our assumptions going into it as to what causes better outcomes or lower cost are wrong about 50 percent of the time,” Hochman said. Sophisticated analysis of large data sets will let the health system better identify the elements that consistently lead to better care, he said.