GHX Calls Its Shot…Announces Plans to Cut $5 Billion in Healthcare Costs During the Next 5 Years

Louisville, CO — Monday, March 29, 2010

In the debate over healthcare reform, the healthcare supply chain has been largely overlooked as an effective way to reduce the cost of healthcare. Yet GHX and a collaborative community of healthcare providers, manufacturers, distributors and group purchasing organizations (GPOs) have already documented more than $1.3 billion in savings, and are on track to cut another $5 billion from the cost of healthcare over the next 5 years.

The announcement comes 10 years to the day since executives at five leading healthcare manufacturers—Johnson & Johnson Healthcare Systems, GE Healthcare, Baxter, Abbott and Medtronic—announced the formation of GHX. “It was the go-go days of the Internet,” says GHX Chief Executive Officer Bruce Johnson. “There were dozens and dozens of startups, each claiming to be uniquely positioned to help recapture the billions of dollars of waste in the healthcare supply chain identified by the 1996 Efficient Healthcare Consumer Response study.”

The difference between GHX and many of the young start-up companies was the recognition by leaders of the founding companies that success required more than just the promise of the Internet, and would need to be shared across the industry. This kind of effort required a new business model, one that brought not only competitors to the table, but also representatives from every facet of the supply chain and a commitment to providing benefit and savings for all involved. The evolution resulted in the formation of the healthcare industry’s first global independent trading exchange—GHX.

Today, as it marks its 10th anniversary, GHX has achieved its vision, working with the majority of hospitals in the U.S., as well as additional providers in the U.S., Canada and Europe, and the suppliers from which they purchase more than 85 percent of the products they use on a regular basis. GHX is owned by 20 established organizations, representing the entire healthcare supply chain.

Ten years later, the industry finds itself in another time of uncertainty and opportunity. And once again, through leadership, vision and collaborative spirit, GHX steps up to the plate and calls its next shot.

“It goes without saying that we are all keeping a close watch on what has happened in Washington, D.C., but regardless of the outcome of healthcare reform, healthcare costs must be reduced. Outside the beltway, hospitals and suppliers are working together to measure real cost savings by changing the way they do business with one another,” says Bruce Johnson. “That’s why we are committed to providing solutions that will drive an additional $5 billion in savings in the coming 5 years.”

GHX is uniquely qualified to take the leadership role in this area. More than 11,000 healthcare provider facilities and 4,700 medical-surgical supplier divisions in North America, and an additional 1,000 providers and 300 suppliers in Europe, transact business using GHX. GHX purchase order volume represents more than 40 percent of the total amount spent by U.S. acute care hospitals on medical-surgical products.

GHX continues to drive better bottom lines for healthcare, reinvesting 15 percent of its revenue in development of new products, services and markets that help support the “5 in 5” goal. In the past 18 months, GHX has introduced four new products that improve the process by which healthcare providers search, source, procure, buy and pay for products. This, in turn, increases efficiencies and cost savings across the supply chain.

GHX customers save money by connecting to the open and neutral GHX trading exchange to do business with multiple trading partners and using complementary software solutions to improve efficiencies and provide visibility to more accurate and timely data to improve processes, financial performance and, ultimately, patient care.

Curt Selquist, the first chairman of the board for GHX and one of those original five founding visionaries, says that GHX does exactly what it was intended to do: “GHX brings the industry together, to give us a place to find solutions to shared problems and to focus on the most important person we all have in common—the patient. There are just a few thousand more of us involved now,” Selquist said with a smile.

About GHX
As the business hub for healthcare, Global Healthcare Exchange, LLC (GHX) enables healthcare providers and suppliers in North America and Europe to reduce costs and improve margins by automating processes, reducing operating expenses and increasing knowledge-based decision making. Products and services include trading partner connectivity, order and contract management and validation, data synchronization, sales force automation and business intelligence. Equity owners of GHX are Abbott Exchange, Inc.; AmerisourceBergen Corp.; Baxter Healthcare Corp.; B. Braun Medical Inc.; BD; Boston Scientific Corp.; Cardinal Health, Inc.; Covidien; C.R. Bard, Inc.; Thermo Fisher Scientific, Inc.; GE Healthcare; HCA; Johnson & Johnson Health Care Systems Inc.; McKesson Corp.; Medtronic USA, Inc.; Owens & Minor; Premier, Inc.; Siemens; University HealthSystem Consortium; and VHA Inc. For more information, visit