LOUISVILLE, Colo. – August 26, 2014 – GHX and its supplier and provider customers have successfully accomplished an important goal set nearly five years ago – to secure $5 billion in supply chain savings for the North American healthcare market. This milestone, delivered more than four months ahead of schedule, marks the achievement of the company's "5-in-5"goal, a commitment made in January 2010 to take $5 billion out of the cost of healthcare.
GHX created the "5-in-5" savings calculator in 2009 with assumptions and methodology independently verified by PRTM, the global management consulting firm now part of PwC that developed the Supply-Chain Operations Reference model (SCOR®). The "5-in-5" methodology is based on more than 70 calculations each based on appropriate drivers, assumptions and descriptions by GHX product and category.
The savings came from the company's more than 18,000 provider and 10,000 supplier customers throughout North America, which have maximized automation and management of non-labor spend, including implantable devices, and made improvements in areas such as contract price alignment, accounts payable automation, and data standardization and synchronization.
"This accomplishment demonstrates the power of an industry working together to make a measurable difference in the cost of healthcare. Five billion dollars of eliminated cost from healthcare is a significant opportunity to focus those resources on quality patient care – exactly where the focus should be," said Bruce Johnson, president and CEO of GHX. "These savings came from automation, efficiencies and visibility in the medical-surgical and implantable device supply chains. We know there is still a significant amount of opportunity and work to be done. This $5 billion is the tip of the iceberg and GHX will continue to provide solutions to drive automation, efficiency, accuracy and visibility in business processes for even more savings."
GHX has long been an advocate for supply chain collaboration and visibility among healthcare trading partners to reduce costs, increase efficiencies and help free-up time, money and resources to provide more focus on patient care. As the second largest and fastest growing expense for healthcare organizations, the medical-surgical and implantable device supply chains are both a challenge and major opportunity for healthcare companies. By helping drive greater accuracy into more automated supply chain processes, GHX and its customers are leading the charge in transforming the healthcare industry by reducing costs and helping providers deliver cost-effective, high-quality patient care.
"GHX has demonstrated that its customer base can significantly increase savings by conducting as much business as possible electronically with trading partners and sending more of their procure-to-pay transactions, including purchase orders (PO), PO acknowledgements, advance ship notices, invoices, catalog price updates, etc. through EDI (electronic data interchange)," said Johnson. "GHX is working with members of its GHX Global Network in the U.S. and Canada to provide a catalyst driving toward processing more than $60 billion through the GHX Exchange in 2014. That's an increase of 58 percent over the dollar volume documented when the 5-in-5 goal was set in 2010."
1.As measured by the GHX "5-in-5"savings model, created and validated by PRTM now part of PwC. The "5-in-5"program started on January 1, 2010 and was slated to continue through December 31, 2014.