The Healthcare Hub

Driving Compliance through Directed Buying in Healthcare Supply Chains

Wednesday, August 23, 2023
For today’s healthcare supply chain professional, procurement pathways are as complex as the large health system’s service delivery models are varied. As a result, there are multiple requesting locations, served by different inventory locations and distribution channels, covering an always increasing number of contract items and prices.

When it comes time to purchasing goods and services, each requisitioner across the continuum of care cannot be expected to understand all these nuances or remember the preferred vendor, item and price relationship.


Directed buying is about making it easy for every requisitioner to do the right thing – purchase the right item, from the right source, at the right price, in real time.


GHX Marketplace plays an important role in providing a directed buying experience, which ensures supply chain compliance by enabling managers to influence thousands of purchasing decisions being made each day – directing users to contracted, compliant goods and services that are the preferred choice of the organization. In this article, we will explore the core elements that make up directed buying. 



Table of contents


  1. Virtual item formulary: single source of truth 
  2. Filtering logic for formulary control 
  3. The benefits of smart search technology 
  4. Control spend with directed buying 



The virtual item formulary: a single source of truth

GHX Marketplace is supply chain’s virtual item formulary, and this is the backbone of directed buying. As a data enablement platform, the virtual item formulary gives supply chain the tools needed to centrally manage all contracted sources (ERP item master, GPO contracts, local price agreements), items and prices so they can direct spend to preferred sources based on item level attributes.

It gives master data teams data onboarding utilities with built-in approval workflows along with a syndication engine so they can effectively maintain the increasing volume of contracted items and the velocity of price changes. With price management at its core, the virtual item formulary not only ensures that the right item is purchased from the right source but that the right price is maintained from the point of requisition to the payment of the invoice. 


Formulary control with filtering logic 

The virtual item formulary serves up prescribed item formularies to end-users based on the priorities set by supply chain. As a result, organizational priorities define what contract sources, what items and what prices are visible to each requester community.

This patented filtering logic governs the items and prices that are available for purchase to the requesters based on their business unit, requesting location, inventory location, role, distribution channel, contract commitments, etc.  

GHX Marketplace directs requesters to the best option without them needing to know the item, vendor, or contract relationship. As an example, in a bill-only use-case, a supplier can access GHX Marketplace to record items used within a patient procedure and their search vector is limited to only their company’s items. 



Patented smart search technology 

GHX Marketplace’s search algorithms are highly sophisticated. Machine learning techniques are employed to ensure search speed and accuracy continuously improves. This patented deterministic search technology searches a user’s formulary of approved content to return and prioritize results based on the context of search terms entered and the priorities set by supply chain.  


A more efficient user experience 

Through various research, Prodigo Solutions, now GHX, identified that nearly 80% of the search terms entered during the requisitioning process are for specific item part numbers.

For requesters, Smart Search interprets the user’s search string to determine the user’s intent (e.g., specific part number or word patterns) and will only return items that reflect the value searched, eliminating extraneous results the user would have to sift through. Smart Search gives time back from administrative tasks so that clinical staff can get back to patient care more quickly. 


Weighted search results to drive supply chain priorities 

Supply chain managers can prioritize search results that are returned to the requester in GHX Marketplace. By weighing the value and/or ranking the order in which results will be displayed, supply chain can shape behavior to support organizational objectives.

Whether it’s something as simple as increasing inventory turns on inventoried items or an opportunity to direct spend to suppliers where rebate thresholds are in the balance, GHX Marketplace helps procurement managers drive the end-user behavior needed to achieve their cost savings objectives.

Weighted search can also be used to help drive other supply chain initiatives, such as promoting sustainable products or minority/women/veteran-owned vendors. 


Filter out duplicate items to eliminate confusion for requesters 

The search engine filters out duplicate items. This makes it easier for requesters to find and order the correct item at the correct unit of measure and ensuring the user is presented with the correct item, source and unit of measure based on their purchasing profile.

This makes data maintenance simpler for administrators since they can load entire contracts and distribution options without having to manually cross-reference against the item formulary for a specific location. As well, GHX provides a duplicate item report to help administrators keep the virtual item formulary clean. 



The benefits of directed search

In addition to providing an optimal user experience, directed buying or directed search, drives hard dollar savings by shaping the behavior on thousands of purchasing decisions. This allows supply chain to control spend across the entire enterprise footprint.

  • Standardization: Reduces supply chain and clinical variance, delivering value that extends from supply chain optimization to improved patient care. 
  • Savings: Delivers contract compliance from the front end of the procurement cycle, ensuring that the requisition has the right item, from the right source, at the right price, in real time.  
  • Control: Drives utilization of preferred contracts for all managed product and purchased service categories, maximizing the price incentives, rebates and GPO admin fees collected through contracts.


Request a demo of GHX Marketplace to learn more about how the ecommerce solution enables maximum, sustained cost savings throughout the supply chain by driving contract utilization at the point of requisition. 

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Doug Keverline

Senior Solutions Specialist

Shape Demand and Control Spend with GHX Marketplace