Global Health Care Exchange grows to more than 30 members

September 13, 2000

No firm starting date as competitive group emergesThe large group of medical equipment and products companies that make up the Global Health Care Exchange still plan to go online sometime this fall but have put back the date. They hope to reach 40

No firm starting date as competitive group emerges

The large group of medical equipment and products companies that make up the Global Health Care Exchange still plan to go online sometime this fall but have put back the date. They hope to reach 40 members before then.

Meanwhile, a competing venture—The New Health Exchange—is just moving into its office space in suburban Minneapolis, and could not be reached for comment. Whereas manufacturers dominate Global, New Health is so far made up primarily of distributors, including AmeriSource, Cardinal Health, Fisher Scientific, and McKessonHBOC.

The Global Health Care Exchange was formed last spring by five of the largest healthcare suppliers: Johnson & Johnson, GE Medical Systems, Baxter International, Abbott Laboratories, and Medtronic (SCAN 4/12/00). When it is up and running, the Web site will offer online ordering with customer-directed distribution, online inquiry about order status, online order confirmation, and product catalogs.

Members will pay an annual subscription fee proportional to their annual revenue. Global’s general manager Mike Mahoney wouldn’t say what the fees will be. The group expects its customers will mostly be hospitals and other healthcare facilities.

“The most important reason why the exchange will be valuable is that it is open and equal to the manufacturers,” Mahoney said. “Each will achieve the same benefits.”

Customers will be able to search by product, manufacturer, or product ID number for price status and availability, and be connected to a product’s supplier. In addition, Global will offer links to suppliers’ Web sites, Mahoney said.

Global will not get into pricing and will not interfere with hospitals’ relationships with group purchasing organizations. Mahoney said pricing would raise antitrust issues, and that it was important for the exchange to remain open and neutral.

“Pricing is determined by existing contracts and will be (decided) by the provider (not by the exchange),” Mahoney said. “The exchange is really about access to information. We’re helping provide accurate pricing, and in the future we will also be able to provide reporting data to customers’ suppliers.”

At the moment, no members are GPOs, but some may join the exchange in the future.

“That wouldn’t be a conflict,” Mahoney said. “We’re working with them and it would be a logical extension. Customers value their GPO relationships, and we hope to deliver strong value to the customers, so it’s logical many GPOs would want to participate.”

Although all of the five original Global members, and many of the others, have or plan to have their own online ordering systems, the exchange’s broad and diverse product offering should assure it of a dominant market position. Global also plans to deliver extensive clinical content.

The original startup date was end of September in the U.S. with worldwide expansion coming later, but Global is now unwilling to commit to a specific date. Mahoney said the target date for pilot sites is late September or early October.

Global Health Care Exchange recently bought Boulder, CO, technology organization Centrimed. As soon as the acquisition is formalized, Centrimed will set up the exchange’s technology platform.

As for clinical content, Mahoney sees that as bringing clinicians into the access channels created for commercial transactions.

Mahoney left GE Medical Systems in May. He was manager of PACS sales and marketing.

In addition to the five founding members, other partners in the Global Health Care Exchange are Agfa, Bayer Diagnostics, Becton Dickinson, Bitronik, Boston Scientific, Burrows, CR Bard, Datex-Ohmeda, Ferno-Washington, Guidant, Hill-Rom, Integra LifeSciences, Medisystems, Normandin Pacific, North Shore Long Island Jewish Health System, Nycomed Amersham, St. Jude Medical, Smith & Nephew, Sonora Medical, Sulzer Medica, Toshiba America Medical, Tyco Healthcare, Utah Medical Products, Varian, and Vermed.

Mahoney expects to have 40 companies by the time the exchange goes online, with several more to be announced in the next few weeks.