Greater life expectancy, lower fatality rates, and rapidly aging populations will have a profound impact on entire societies. SAP applications provide solutions to help governments and businesses adapt – from human resources management to social services and healthcare.

Supporting healthy medical and financial outcomes

Western countries face enormous demographic change over the next two decades. How will this affect the Beaumont Health System?

Subra Sripada: Consider this fact: The United States spends US$2.5 trillion on healthcare. At the same time, the country is shifting demographically. People are staying healthy and living longer. And that is creating a greater cost burden. Around 78 million Americans turned 65 last year. Medicare, the national social insurance program for Americans aged 65 and older and younger people with disabilities, already covers 47 million people today. In just 20 years, it will cover 80 million. On top of that, there will be fewer workers to replace these retirees. That means less tax revenue to pay for their benefits. This fundamental imbalance is one of many factors that will drive up Medicare costs. This, in turn, is putting doctors and hospitals under enormous cost pressure. 

How is demographic change influencing the healthcare market?

Subra Sripada: One important trend is a gradual shift from paying by volume to “paying for value:” The idea is to reward innovation, efficiency, and high-quality outcomes rather than tests and procedures. At the same time, patients are becoming more tech savvy. They are becoming healthcare consumers. They want value for their healthcare dollar. And they want greater choice in how – and where – they buy medical services.


How is Beaumont responding to this fundamental change? 

Subra Sripada: For one, we are a great believer in using IT to make better decisions and to manage change – from both a patient and business perspective. And I think our research is stronger because of it. I think we are more innovative. We are more efficient. And I also think we have been able to better evolve as a healthcare organization. 


Have Beaumont’s challenges and opportunities changed also?

Subra Sripada: As it turns out, one of our biggest challenges has actually been a major opportunity. Take the American Recovery and Reinvestment Act, for example. This is a U.S. law that financially rewards doctors and hospitals to introduce electronic health records. For us, it means millions of dollars in reimbursement incentives. But to qualify, Beaumont needed two things: Digitized patient records and powerful software to generate the required government reports. On top of that, we had to teach our people and our physician network to use the software. They had to be encouraged to work within a completely new system. This required an enormous training and adoption effort. 


How is SAP helping Beaumont succeed in this demanding environment?

Subra Sripada: SAP BusinessObjects solutions have made a real difference in enabling our success in leveraging data. A key aspect of the success has also been SAP training, which maximized the value from our investment in business intelligence solutions. Today, our executives, administrators, and doctors are achieving greater insight into our operations and patient care. Thanks to our new analytics and reporting capabilities, we have also been able to collect US$12.5 million in incentive funds. In helping Beaumont transform into a data-driven organization, SAP is helping us stay on the cutting edge of technology leverage in the delivery of healthcare. The end result greatly improved quality, safety, and efficiency in our operations.

Customer Profile

Michigan-based Beaumont Health System is a major regional health system with more than 1,700 licensed beds, 3,700 physicians, and 19,000 employees.

SAP has helped Beaumont leverage IT to achieve greater transparency and insight for more efficient, effective operations and patient care, and to collect incentive funds of US$12.5 million. 


Quick Facts

Industry: Healthcare 
Employees: 19,000 
Headquarters: Royal Oak, Michigan (USA) 
Web site:
Solution: SAP BusinessObjects business intelligence solutions, SAP BusinessObjects enterprise information management solutions, SAP Business­Objects Web Intelligence software, SAP BusinessObjects Data Integrator software, SAP Crystal Reports software