3. Group Purchasing Organizations
1. Four Major GPO’s
• Premier
• Novation
• MedAssets
• HealthTrust
2. What do GPO’s do?
• Aggregate volume, negotiate pricing
• Custom Contracting e.g. Medical Devices
• Spend Analytics
• Consulting
3. How are the GPO’s Different?
4. Group Purchasing Organizations
4.
• GPO’s key focus areas are supplies, pharma,
medical devices and capital
• GPO’s May or May Not be right for your business
• They are acutely focused on technology companies
• They can assist with introductions to providers
6. HealthTrust - A Global GPO
• Owned by five investor-owned and 10
not-for-profit institutions including: 2010 – HealthTrust Europe,
HCA, CHS, HMA, Lifepoint, UHS and Birmingham, U.K.
Consorta
• Serving three market segments: 2011 – CoreTrust Europe,
– HealthTrust – 1,400+ hospitals London, England
– AdvantageTrust – 10,000+ sites
– CoreTrust – 400+ non-healthcare 2010 – Global Sourcing,
companies Shanghai, China
2006 – AdvantageTrust,
Schaumburg, IL
1999 – HealthTrust,
Brentwood, TN
7. HealthTrust Overview
• Established as a Group Purchasing
Organization in 1999 Committed Spend ($ billions)
– Operating as a committed model
25
– Providing total cost management
solutions $21.2
20 $19.0
– Driven by member advisory boards $18.1
$17.0
15 $14.1
• Dynamic member growth
– Leveraging $21 billion in annualized $9.8
10
compliant purchasing volume
– 99% member retention rate
since inception 5
– Partners with 7 of 9 largest
for-profit IDNs 0
2007 2008 2009 2010 2011 2012
9. HealthTrust’s Foundation – An Aligned Membership
• “Patients First” philosophy
– Member-led Advisory Boards approve all Sustainable
contract awards Price Advantage*
14%
• Broadest Contract Coverage
12.2%
– Portfolio covers at least 85% of typical spend, 12%
including non-traditional areas 10.7%
10%
• One-Price-for-All 8.0%
– Due diligence history of 7 - 12% savings 8% 7.2%
– Extended to sub-acute classes via
6%
AdvantageTrust
• Total Cost Management Solution 4%
– Category expertise in custom contracting for 2%
medical devices and purchased services
– Comprehensive supply chain and clinical 0%
GPO A GPO B GPO C GPO D
expertise supporting all consulting offerings
*Internal due diligence over
• Integrity and Culture prior 18 months
– Unsurpassed ethics, no conflicts of interest
10. Integrated Supply Chain – Total Cost Management
EFFECTIVENESS EFFICIENCY
Point of
Expense Management Care Supply Chain Operations
• Leverage GPO portfolio & • Develop standard operating
expertise Delivery model
• Implement strategic custom • Optimize technology
contracting • Integrate supply chain
− SourceTrust
− ServiceTrust Right Product, Right Price, Right Place management in clinical
areas (OR and Rx)
• Ensure robust Value • Evaluate Shared Service
Analysis process, including opportunities
− Formulary development
EVALUATION
• Implement pharmacy
− Clinical intervention
remote order entry
− Standardization initiatives
− Utilization review
Data Analytics - inSight
• Standardize Master Files
• Create an enterprise data warehouse
• Develop analytic tools
• Measure Key Performance Indicators
• Reference price, operating and outcomes benchmarks
11. …extending the HealthTrust portfolio to
non-health-care companies to increase scale
and value for all HealthTrust members
11
12. CoreTrust…a division of HealthTrust
Formed 65+
Mar 2006 32 Members 60 Members 126 Members 210 Members 310 Members Categories
2006 2007 2008 2009 2010 2011 Today
Vestar Capital Onex, CDR and
Blackstone K.K.R. Bain Capital Warburg Pincus Apax Partners
415+
Relationship Welsh Carson Members
THLee
• CoreTrust By The
– 2006 - extended leveraged buying model to the Numbers:
commercial sector Retention Rate
– Primary driver of initial growth – 7 of largest 10
private equity firms sponsor CoreTrust to their
portfolio companies
99% Billion Compliant
Purchasing Volume
– Combined leverage enhances price value for all
– $1B in committed volume across 30+ indirect
21+ Private Equity
spend categories, e.g. HR, IT, office supplies, Relationships
parcel, rental cars
30+
12
13. CoreTrust’s Foundation – an Aligned Model
• Member driven decision making • Unparalleled Value
– Advisory boards led by subject – One-Price-for-all philosophy
matter experts in collaboration – Broadest contract coverage in
with HealthTrust indirect spend
– Private equity advisors – Due diligence history of 10%+
– Summit meetings – forum for sustainable savings
alignment, negotiations and
communications
• Exceptional Vendor Support
– Integrity and culture – no conflicts – Dedicated account resources
of interest, safe harbor rules – Executive sponsorship
– Superior contract terms & conditions
Vendor RFP Issuance Financial Board Review Contract
Qualification Must satisfy Analysis & Consensus Award
Advisory Board prerequisite terms
Member-specific Align on sole, dual, Summary & tools
approved and conditions
or multi source Account conversion
vendor support
13
14. CoreTrust Membership Process
Step 1 Step 2 Step 3 Step 4 Step 5
Sign non- Provide data Review savings Sign Vendors are
disclosure for market assessment Participation notified and
agreement basket analysis summary Agreement programs are
implemented
Assessment Decision Implementation
Day 1 Speed to Savings Day 45
14
15. Key CoreTrust Offerings
Type Offering Vendors Details
IT Hardware/Software/Storage •Desktops, laptops, servers, printers & peripherals
Committed
•Expansive core list with discounted staples alternatives
Office Supplies •Quarterly price refresh based on wholesale index
•Very competitive rates on domestic and Int’l parcel
Small Parcel •Includes Ground & Express
•Includes National, Enterprise and Alamo
Rental Car •Emerald status preserved for conversions
•US & Canada, customized city surcharges
•Fastest growing pharmacy collective in the market
Pharmacy Benefits Management • Open architecture; implementation allowances
•Dedicated services at the national account level
Life/Disability/Travel Insurance •Guarantees, price protection, implementation allowances
• Full staffing plus vendor management service options
Temp Labor • One markup rate nationally for most employee types
Optional
• Aggressively discounted click-charges include service
Copiers and supplies, periodic maintenance, & repairs
•Purchase, lease or rent options
• Extend the useful life of IT assets, No EOSL
Extended Warranty •Reduce the annual maintenance cost
•Reservationless audio, web and Video conferencing
Conferencing •Global Network access
•Rebates on all AMEX payment offerings
Corp. Purchase & Travel Card •Includes T-, P-card, B2B Payment Solutions (BIP & vPay)
15
18. The Evolution of Parallon Business Solutions
Market Intensifying financial and operating pressures related to reform,
Dynamic technology and point-of-care delivery evolution
Parallon Sharing “operator” expertise built upon 12 years of shared-service
Charter success to provide progressive solutions in a dynamic market
HCA Shared All About
Rev Cycle Supply Chain IT and
Service Operations Consolidated Project Mgmt
Staffing
consolidated into 18 Services
Initiatives Formed
into 8 centers centers developed
160 hospitals
120 ASCs 1999 2008 2009 2011
1993
All About
Market HealthTrust HealthTrust
Staffing Parallon
Europe
Offerings Launched signed first Launched
Acquisition
IDN
18
19. Parallon’s Objectives for Clients
Partner with health-care systems to build long-term client success
Focus on improving cost efficiency and cash flow enhancement
Allow clients to focus and protect their clinical core
Provide deep expertise in health-care operations
Develop innovative solutions to meet evolving market/government
requirements
Integrate solutions into client culture that optimize client outcomes
(quality, service, satisfaction, financial)
19
