GDP 2002 3.8 2003 4.8 1990 GPOGroup Purchasing Organization 2003 800 GPO 70 190 GPO GPO POS
2001 9 11 2002 3.8 2003 4.8 15.5 2002 2003 10.5 3.8 11.0 4.8 1.6 9.3 1.7 6.3 14.9 15.5 2001 2003 2004 8 8 2 131,831 2,042 129,789 364 130,153 118,619 2,747 115,872 255 116,127 13,212 705 13,917 109 14,026 10.0 10.7 10.8 4,070 190 4,260 24 4,284 1,923 84 2,007 26 2,033 402 21 423 8 431 2,691 94 2,785 2 2,787 643 91 734 4 738 3,483 225 3,708 45 3,753 http://data.bls.gov/ 2004 2 1403 10.8 1
15 2001 8 2003 8 2 275 71 2002 216 2 3 3 7 2004 1 2.5 3.5 69 22 Dorenfest & Associations 2002 216 9 2006 305 2000 2001 2 1999 2000 2001 2002 2003 2004 2005 2006 185 190 200 216 236 258 280 305 15.6 2.7 5.2 8.0 9.3 9.3 8.9 8.9 Dorenfest & Associations GDP GDP 2 2003 7 2
1990 1980 1990 2001 6,965 6,649 5,801 100 243 4.2 5,558 95.8 491 8.5 4 0.1 136 2.3 5,904 5,420 4,927 84.9 74 36 19 0.3 5,830 5,384 4,908 84.6 3,322 3,191 2,998 51.7 1,778 1,444 1,156 19.9 730 749 754 13.0 00 20 3
24 2001 5,801 4,908 85 Non-government not-for-profit State and Local Government Investor-owned (for profit) 1980 1990 2001 1.365 1.213 987 100 117 98 52 5.3 1,248 1,115 936 94.7 215 158 89 9.0 2 NA 0.3 0.03 39 25 19 1.9 992 929 828 83.8 4 2 2 0.2 988 927 826 83.6 692 657 585 59.3 209 169 132 11.0 87 101 109 13.4 00 4
13 13.4 2 Integrated Healthcare Network 2002 2003 9 597 10 9847 7444 8928 8 3153 10 919 2524 3298 8 5677 10 4217 3308 3.9 59820 88 9 3 1795 3538 3.4 63996 81 8 11 7040 14 5497 16 8213 5103 3.5 1578 6.3 3052 9343 2051 1.4 19922 11.8 IHN Sentara IHN 5
IHN 3.5 2003 8928 8.6 2003 3.4 8.6 2001 2003 11 7040 5932003 IHN 2 IHN 16 7 10 3 61 IHN IHN 2002 2383 26 70 Group Purchasing Organization Health Industry Group Purchasing Association: HIGPA 1990 2003 6
800 684 3 Novationwww.novationco.com Premierhttp://my.premierinc.com AmeriNetwww.amerinet-gpo.com 2003 5 Assessing the Value of Group Purchasing Organization: by The Lewin Group GPO 8 Medical-surgical supplies 7
Radiology and laboratory supplies Pharmaceuticals Medical devices and clinical preference items Capital equipment Dietary products and services Office supplies Cleaning supplies and services X CT MRI GPO 8
1 1 patronage dividend 10.4 190 2 7.7 1.9 0.8 3 [Baseline GPO Contract Price] [Price with Volume Commitment] [Price with Market Share Commitment] 1.4 1 64 2 25 3 11 3 7 7 3 9
9 4 175167161152 Commodities Specialty Capital 80 73.7 12.0 12.4 73.7 60-79 15.4 20.4 7.5 11.2 40-59 10.9 37.1 14.3 12.5 20-39 0.0 16.2 21.1 0.0 19 0.0 14.4 44.7 2.6 1990 2000 80 2004 Novation Neofoma Neoforma 1996 2001 2002 2003 2004 300 426 1,110 1,330 27,572 8,520 7,750 7,530 27,272 8,094 6,640 6,200 28,630 22,081 24,247 17,883 54,411 62,632 2003 Lawton R. Burns The Health Care Value Chain2002 10
Enterprise Resource Planning Neofoma Novation Global Healthcare Exchange 2000 3 Revenue Neutral Business Model 2 3 5 6 8 11 13 GPO 79.6 73.6 70.2 63.8 85.8 58.3 60.0 70.0 50.0 11
PURCHASING DEPT. Hospital Manufacturers Distributor Warehouse Hospital General Stores Hospital Manufacturers Wholesaler Warehouse Hospital Patients Hospital Warehouse Hospital Manufacturers Hospital Information Product 10 Results & Benefits Compressed and Rationalized Supply Chain MMIS ILLUSTRATIVE Build hub-and-spoke model to streamline supply chain activities between hospitals, GPOs and manufacturers Manufacturer leverage IDN hub-and-spoke and forward DC Migration from Push to Pull Supply Chain Demand Planning and Replenishment Hub can be self-managed, distributor managed, 3PL managed or managed through Strategic Alliances Manufacturers Manufacturers Manufacturers Regional Service Center Hospital Hospital Hospital Hospital Hospital Patients Information Product/Information MMIS = Material Management Information System 12
13 IC 2002 10
[The Healthcare Supply Chain 2002 Survey Results] by HFMA & McKESSON 14
2003 10 25 5 2 3 1 7 18 15
185 49 39 42 312 770 9,119 1,830 93 78 122 52 48 18 22 7,289 2003 11 9,119 1,830 7,289 16
9 5 7 7 2003 4 17
7,573 75 39,633 49,273 4,311 44 22,100 35,218 6,767 66 37,347 44,974 2,752 24 15,010 19,560 2,612 324 15,000 13,000 2001 2002 122 6700 1200 41 2003 3 18
American Hospital Association, Hospital Statistics 2003 The Lewin Group, Assessing the Value of Group Purchasing Organizations, 2003 Health Financial Management Association, Streamlining the supply chain, 2003 HFMA & McKKESSON, The Healthcare Supply Chain 2002 Survey Results Lawton R. Burns, The Health Care Value Chain, 2002, Jossey-Bass Herbert Hovenkamp, Competitive Effects of Group Purchasing Organization s (GPO) Purchasing and Product Selection Practices in the Health Care Industry, 2002 19