From the editor’s desk: JHC October

A sampling of content from JHC October (

Market Shift

How will the MedAssets/Broadlane combination alter the purchasing landscape?

The new, larger MedAssets will be big. Though the companies declined to calculate their combined client base, they did say that Dallas-based Broadlane serves more than 1,100 acute care hospitals and 50,000 non-acute care facilities, while MedAssets serves more than 3,300 hospitals (inclusive of 1,700 in its Spend Management segment) and 40,000 non-acute healthcare providers. By way of comparison, Premier has more than 2,400 acute care members and 70,000 non-acute members, and an annual purchasing volume of $36 billion. Novation contracts on behalf of 25,000 members of VHA and 5,500 members of Provista LLC, representing an annual purchasing volume of $37.8 billion. Amerinet reports that more than 2,500 acute care and 38,500 nonacute-care facilities use its contracts, and that 2009 purchasing volume was $7 billion.


Distributor relationships: defining the value in value-add

Today’s distributors aren’t just box-movers. But contracting executives must choose selectively from their suppliers’ value-added  offerings.

The time for a distributor to show its true colors is when the IDN is undergoing a major supply chain transition. It is during such times that the distributor can either facilitate the process, or cause the IDN to get hopelessly mired in it. Luckily, Beth Israel Deaconess Medical Center in Boston got a taste of the former when it switched GPOs.

“Our pharmacy was roughly 96 percent compliant with the old GPO,” says Joe Sheil, director of contracting. Roughly $53 million flowed through the wholesaler, Cardinal Health, half of which was on GPO contracts, the other which was not. “You don’t just go to the wholesaler and flip it all over, because there’s a risk of contracts dropping off,” he says. “We worked really hard the last 60 days to make the big switch.” On Sep. 1, the IDN did indeed turn over the entire pharmacy portfolio, representing 84 key manufacturers. “We worked very diligently with the wholesaler and the GPO to make sure all the tiers were correct,” says Sheil. In addition, the distributor needed to ensure that as a disproportionate share facility, Deaconess received discounts on its outpatient drugs through the government’s 340B program.

A similar process took place on the med/surg side. “What has really worked is the support we got from our distributor,” says Sheil. “The willingness to come to the table, to convene ongoing conference calls, and doing what they needed to do in the background to make sure we’re whole.”

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