By combining operations, GHX and Medibuy will eliminate the redundant costs associated with developing and deploying separate exchanges, while making it easier and less costly for current and future users to conduct e-commerce with one another. GHX will remain a privately held company open to all supply chain participants, with clear guiding principles and a mission designed to reduce supply chain costs for all involved. Consistent with this mission, the GHX business model is designed to generate revenues only to the level required to support the ongoing costs of the business. The board of directors of the merged company will include representation from the entire supply chain, including hospitals, GPOs, manufacturers and distributors, as well as independent representatives.

Industry analysts have noted the high price tag associated with the inefficiencies plaguing the healthcare supply chain. The waste, in terms of time and money, amounts to billions of dollars annually, according to several well-respected industry studies (Andersen, “The Value of eCommerce in the Healthcare Supply Chain,” 2001; Efficient Healthcare Consumer Response, 1996). While numerous organizations were formed to address this problem, this merger creates the first company and electronic trading exchange with ownership, support and participation by representatives of the entire healthcare supply chain. Through the merger, GHX and Medibuy will achieve the “critical mass of participation among all players within the healthcare supply chain,” which the Andersen study cited as key to realizing the benefits of e-commerce.

“This merger is exactly what the healthcare industry needs and what my organization has been waiting for,” says Ed Boyer, Senior Vice President, Corporate Services of Bon Secours Health System. “With one exchange offering the combined connectivity and capabilities of GHX and Medibuy, Bon Secours Health System now has a clear choice as to the e-commerce solution that can deliver the most value to its hospitals.”

The combined company will maintain relationships with a significant number of both large and small suppliers, GPOs, hospitals, and other healthcare facilities regardless of their size, GPO affiliation, or whether they are for profit or not-for-profit. “Over the past several years, both GHX and Medibuy have been working on parallel tracks to deliver on the same market promise: a more efficient healthcare supply chain,” said Curt M. Selquist, Company Group Chairman, Johnson & Johnson. “GHX and Medibuy each provide valuable technology solutions. Together, they have an opportunity to eliminate redundancy and improve business processes for all participants.”

“Medibuy’s products and services have played a significant role in achievement of HCA’s supply chain efficiency objectives over the past few years, and we anticipate that the combined resources of the new company will deliver even greater value,” adds Jim Fitzgerald, Senior Vice President, Contracts and Operations Support for HCA, the nation’s leading provider of healthcare services. HCA hospitals have utilized the Medibuy’s Reqs™ system to streamline the requisitioning process. Now, as a result of the merger, HCA will be able to improve the accuracy of their purchase orders by using product data, maintained and verified by suppliers, in the GHX AllSource™ catalog.

Upon merger approval, the process of combining the two companies and migrating buyers and sellers to an enhanced trading environment will be seamless for current users. By integrating the exchanges, both healthcare providers and suppliers will be able to immediately conduct a greater percentage of their purchasing electronically. Further, with a significant number of trading partners utilizing a single exchange and product catalog for more of their purchasing, it will be easier for the healthcare industry to adopt industry standards. "Consolidation that results in opportunities for more trading partners to participate in a single supply chain solution can generate greater efficiencies,” says Gartner Vice President Michael Davis. “Through the elimination of redundant investments, improved integration, and synchronization of data, healthcare organizations should be able to better manage their supply chain processes and begin to recognize cost efficiencies.”

The combined company will be headquartered in Westminster, Colo. under the leadership of GHX Chief Executive Officer Mike Mahoney. The required approval of Medibuy’s shareholders is anticipated before the end of the year. Financial terms were not released.

About Global Healthcare Exchange
Global Healthcare Exchange, LLC (GHX) has created an open and neutral Internet-based trading exchange, along with additional value-added products and services, to reduce costs and improve efficiencies for all participants in the healthcare supply chain. GHX’s participants and strategic partners include suppliers and distributors; integrated delivery networks (IDNs), hospitals and ancillary healthcare facilities; group purchasing organizations and their proprietary healthcare trading exchanges; and supply chain technology companies. GHX has built the AllSource™ product catalog, the first in healthcare to be based on industry standards and contain normalized data maintained and verified by suppliers. The accuracy of the AllSource catalog enables GHX to successfully address many of the most common and costly problems inherent in healthcare procurement. Equity owners of GHX include Johnson & Johnson; GE Medical Systems; Baxter International, Inc.; Abbott Laboratories; Medtronic, Inc.; AmerisourceBergen Corporation; B. Braun Medical Inc., Becton, Dickinson & Co.; Boston Scientific Corporation; Cardinal Health, Inc.; C.R. Bard, Inc.; Fisher Scientific International Inc.; Guidant Corporation; McKesson Corporation; Siemens Medical Solutions and Tyco International, Ltd. For more information visit www.ghx.com.

About Medibuy
Medibuy enhances healthcare supply chain capabilities with intelligent Web-based solutions. Medibuy's product and service portfolio solves healthcare supply chain problems by integrating electronic connectivity and real-time order management with clean, complete and timely data for comprehensive analysis. Medibuy has a growing network of strategic relationships with healthcare and technology leaders to ensure its solutions meet needs of the smallest as well as largest and most complex healthcare systems in the U.S., including Premier Inc., HealthTrust Purchasing Group, HCA, Commerce One and Quovadx. For more information on Medibuy or to contact the company, please visit the company's Website at www.medibuy.com.