2006 GHX Press Releases

TORONTO—November 23, 2006— HealthPRO is the largest group purchasing organization in healthcare in Canada, while GHX provides eCommerce and related supply chain services to help hospitals and suppliers reduce costs and improve efficiencies. Under the terms of the agreement, HealthPRO hospital members that are connected to the GHX trading exchange will be able to utilize the GHX Contract Center for a reduced fee. The GHX Contract Center enables hospitals and other healthcare providers to more effectively manage their product pricing contracts and ensure, in real-time, that they are paying the correct contract price. HealthPRO will provide both contract information and updates for specific member hospitals to GHX, which will then help hospitals electronically upload that information into their respective enterprise resource planning (ERP) or materials management information systems (MMIS). Then, as transactions are sent through the GHX trading exchange, GHX will be able to verify during the transactional process whether the price on a purchase order or purchase order acknowledgement contains the correct contract price. Pricing is held strictly confidential between the contracted parties. "Contract pricing is one of the most effective means for hospitals to control rising healthcare costs. Unfortunately, technology and labor constraints, combined with the frequency of contract changes, make it difficult for hospitals to load contract pricing in a timely manner and to ensure they are paying the correct contract price. The GHX Contract Center will help make both possible and enable hospitals to get the most value out of the contracting services provided by HealthPRO," says HealthPRO President and CEO Michael Foley. Without real-time price validation, many hospitals do not discover pricing discrepancies until after the invoice is received, if at all. By notifying hospitals about price exceptions during the transactional process, hospitals can make changes to purchasing documents on the front end and avoid invoice exceptions that cost both hospitals and suppliers time and money to resolve. By minimizing exceptions, hospitals can also pay suppliers more quickly and, in some cases, take advantage of early pay discounts. "GHX is proud to partner with HealthPRO, which is a recognized leader in contracting services and, with this agreement, the first in Canada to formally address contract pricing with an effective, established program on a national level, says GHX Canada General Manager Nils Clausen. "Together, we can help our mutual member hospitals ensure they are getting the correct contract price for the products they purchase and in turn help control rising healthcare costs." While HealthPRO is the first Canadian GPO to utilize Contract Center, more than 600 hospitals in the U.S. are already utilizing the service. On average, these hospitals report saving between 1 and 3 percent of the total amount they spend on contracted items, as well as up to 90 percent of the time spent manually re-keying contract data. Based on just a 1 percent savings, a typical 3-hospital system that spends $100 million on supplies annually would save approximately $420,000 annually by purchasing contracted products at the correct contract price, as well as nearly $50,000 in lower labor costs. More than 482 hospitals are currently using HealthPRO to negotiate contract pricing for products, while more than 290 hospitals and 46 suppliers participate with GHX in Canada. Although HealthPRO hospital members will not be required to utilize GHX, the GPO will recommend GHX as its eCommerce provider of choice to its member hospitals.
Posted on Thursday, November 23, 2006 Posted by host
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