IBM and the University of Pittsburgh Medical Center have agreed to jointly spend at least $50 million over the next eight years to develop innovative computer technology for use in health care.

The $50 million fund, which would support joint-development of promising information technology projects, is part of an agreement that calls on the health system to buy $352 million worth of computer hardware, software and services from IBM. The new purchase will allow UPMC to save money by reducing the number of operating systems and computer servers it uses throughout its 19-hospital system, officials said.

Officials hope the computer infrastructure will be a model for other hospitals looking to build electronic health records, thereby creating commercial opportunities for both IBM and UPMC.

More broadly, it is hoped that the development fund leads to profit-making ventures in everything from biosecurity to cancer care, said UPMC President Jeffrey Romoff.

"This is at the heart of inventing the future of health care," he said. "If we avail ourselves of this opportunity with IBM, the implications in biosecurity, in cost control and in quality management are just enormous."

The UPMC agreement is yet another example of IBM trying to capitalize on the federal government's push for hospitals to adopt more information technology.

The company announced Tuesday that it had purchased Healthlink, a Houston-based consulting firm that helps hospitals convert to electronic health records, a Bush administration goal.

IBM last year announced collaborations with the Mayo Clinic and the Cleveland Clinic to advance the use of information technology in patient care and research.

But Romoff said the UPMC agreement was unique because of IBM's commitment to the development fund, which could grow to $200 million. Neil de Crescenzo, an IBM vice president, said the UPMC agreement has gone beyond the scope of relationships with other academic medical centers.

The fund will be governed by six officials, three each from IBM and UPMC. Money will move to the researchers once the governance group selects the projects they want to fund.

Biosecurity projects are one such area, Romoff said, noting that IBM researchers were already talking with their counterparts at the UPMC Center for Biosecurity about projects that could be commercialized. Biosecurity efforts are focused on developing information technology and systems to help hospitals respond to large-scale epidemics and bioterrist attacks.

The biosecurity group "will come out in the next month or two with an agenda -- maybe four or five significant projects in the biosecurity area" that would build off "the expertise of both the UPMC group and the IBM group," he said. "We will then make the decision with IBM [whether] to fund those projects."

For UPMC's biosecurity center, money from the joint investment fund would supplement the $12 million endowment UPMC pledged to the group when it was recruited from Johns Hopkins University during 2003. The U.S. Department of Defense also has appropriated $8.5 million to the UPMC center through a National Guard contract, Romoff said.

The development fund also could support projects to boost efficiency in patient care, such as using radio-frequency identification tags for tracking personnel, equipment and patients. Other projects could involve improving care for cancer patients.

The information technology that UPMC is purchasing will help the health system expand and improve its electronic health record project, said Dan Drawbaugh, the chief information officer at UPMC.

Experts say computerized health records can improve health care in myriad ways, from preventing medication errors to improving communication among doctors and nurses. The widespread use of such systems is consistent with the goals of the Pittsburgh Regional Healthcare Initiative, a coalition of hospitals and groups seeking to improve medical care and address cost issues.

"We want to build a new infrastructure for UPMC that serves as a national model for all of health care for how technology systems and software applications should be implemented across an enterprise," Drawbaugh said.