jim fitzgerald gpo april 2013
DESCRIPTION
TRANSCRIPT
CEO FORUMApril 2, 2013
Jim FitzgeraldSenior Advisor, CA
Special Operating Partner, FCA
Overview
1. GPO’s
2. Parallon
3. CoreTrust
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?
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
Jim Fitzgerald
April 2, 2013
Introduction to HealthTrust, CoreTrust &
Parallon Business Solutions
HealthTrust - A Global GPO
2010 – HealthTrust Europe, Birmingham, U.K.
2011 – CoreTrust Europe, London, England
2010 – Global Sourcing, Shanghai, China
• Owned by five investor-owned and 10 not-for-profit institutions including: HCA, CHS, HMA, Lifepoint, UHS and Consorta
•Serving three market segments:– HealthTrust – 1,400+ hospitals– AdvantageTrust – 10,000+ sites– CoreTrust – 400+ non-healthcare
companies
2006 – AdvantageTrust, Schaumburg, IL
1999 – HealthTrust,Brentwood, TN
HealthTrust Overview
• Established as a Group Purchasing
Organization in 1999– Operating as a committed model– Providing total cost management
solutions– Driven by member advisory boards
• Dynamic member growth– Leveraging $21 billion in annualized
compliant purchasing volume – 99% member retention rate
since inception– Partners with 7 of 9 largest
for-profit IDNs
Committed Spend ($ billions)
$9.8
$14.1
$17.0 $18.1 $19.0
$21.2
0
5
10
15
20
25
2007 2008 2009 2010 2011 2012
Equity IDNs
Strength Through Diverse Members
Hospitals / Systems
Alternate Sites
HealthTrust’s Foundation – An Aligned Membership
• “Patients First” philosophy – Member-led Advisory Boards approve all
contract awards
• Broadest Contract Coverage– Portfolio covers at least 85% of typical
spend, including non-traditional areas
• One-Price-for-All– Due diligence history of 7 - 12% savings– Extended to sub-acute classes via
AdvantageTrust
• Total Cost Management Solution– Category expertise in custom
contracting for medical devices and purchased services
– Comprehensive supply chain and clinical expertise supporting all consulting offerings
• Integrity and Culture– Unsurpassed ethics, no conflicts of
interest
SustainablePrice
Advantage*
*Internal due diligence over prior 18 months
7.2%8.0%
10.7%
12.2%
0%
2%
4%
6%
8%
10%
12%
14%
GPO A GPO B GPO C GPO D
Data Analytics - inSight• Standardize Master Files• Create an enterprise data warehouse• Develop analytic tools• Measure Key Performance Indicators• Reference price, operating and outcomes benchmarks
Integrated Supply Chain – Total Cost Management
Expense Management
• Leverage GPO portfolio & expertise
• Implement strategic custom contracting− SourceTrust− ServiceTrust
• Ensure robust Value Analysis process, including− Formulary development− Clinical intervention− Standardization
initiatives− Utilization review
• Develop standard operating model
• Optimize technology• Integrate supply chain
management in clinical areas (OR and Rx)
• Evaluate Shared Service opportunities
• Implement pharmacy remote order entry
EVALUATION
EFFICIENCYEFFECTIVEN
ESS
Point of Care
Delivery
Right Product, Right Price, Right Place
Supply Chain Operations
11
…extending the HealthTrust portfolio to non-health-care companies to increase
scaleand value for all HealthTrust members
12
CoreTrust…a division of HealthTrust
By The Numbers:
99% 21+ 30+
Retention Rate
Billion Compliant Purchasing Volume
Private Equity Relationships
65+ Categorie
s
415+ Members
FormedMar 2006
Blackstone Relationship
Bain CapitalK.K.R.
Welsh Carson
Vestar Capital
2006 2007 2008 2009 2010 2011 Today
Onex, CDR andApax Partners
32 Members 60 Members 126 Members 310 Members210 Members
Warburg Pincus
THLee
• CoreTrust– 2006 - extended leveraged buying model to
the commercial sector
– Primary driver of initial growth – 7 of largest 10 private equity firms sponsor CoreTrust to their portfolio companies
– Combined leverage enhances price value for all
– $1B in committed volume across 30+ indirect spend categories, e.g. HR, IT, office supplies, parcel, rental cars
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CoreTrust’s Foundation – an Aligned Model
• Member driven decision making
– Advisory boards led by subject matter experts in collaboration with HealthTrust
– Private equity advisors
– Summit meetings – forum for alignment, negotiations and communications
– Integrity and culture – no conflicts of interest, safe harbor rules
Vendor QualificationAdvisory Board approved
RFP IssuanceMust satisfy prerequisite terms and conditions
Financial AnalysisMember-specific
Board Review& ConsensusAlign on sole, dual, or multi source vendor
Contract AwardSummary & tools Account conversion support
• Unparalleled Value – One-Price-for-all philosophy
– Broadest contract coverage in indirect spend
– Due diligence history of 10%+ sustainable savings
• Exceptional Vendor Support– Dedicated account resources
– Executive sponsorship
– Superior contract terms & conditions
14
CoreTrust Membership Process
Step 1
Sign non-disclosure agreement
Step 2
Provide data for market
basket analysis
Step 3
Review savings
assessment summary
Step 4
Sign ParticipationAgreement
Step 5
Vendors are notified and
programs are implemented
Assessment Decision
Implementation
Day 1 Day 45Speed to Savings
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Type Offering Vendors Details
Committed
IT Hardware/Software/Storage •Desktops, laptops, servers, printers & peripherals
Office Supplies•Expansive core list with discounted staples alternatives•Quarterly price refresh based on wholesale index
Small Parcel•Very competitive rates on domestic and Int’l parcel •Includes Ground & Express
Rental Car•Includes National, Enterprise and Alamo•Emerald status preserved for conversions•US & Canada, customized city surcharges
Optional
Pharmacy Benefits Management•Fastest growing pharmacy collective in the market• Open architecture; implementation allowances
Life/Disability/Travel Insurance•Dedicated services at the national account level•Guarantees, price protection, implementation allowances
Temp Labor• Full staffing plus vendor management service options• One markup rate nationally for most employee types
Copiers• Aggressively discounted click-charges include service and supplies, periodic maintenance, & repairs
•Purchase, lease or rent options
Extended Warranty• Extend the useful life of IT assets, No EOSL•Reduce the annual maintenance cost
Conferencing•Reservationless audio, web and Video conferencing •Global Network access
Corp. Purchase & Travel Card•Rebates on all AMEX payment offerings•Includes T-, P-card, B2B Payment Solutions (BIP & vPay)
Key CoreTrust Offerings
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CoreTrust Members You Recognize or Know
© 2011 Parallon Business Solutions, LLC.
…HealthTrust is closely integrated with the provider-proven
capabilities of Parallon Business Solutions
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The Evolution of Parallon Business Solutions
1993
1999
2008
2011
HCA Shared Service Initiatives
MarketOfferings
All About Staffing Formed
Rev Cycle Operationsconsolidate
d into 8 centers
All About Staffing
signed first IDN
HealthTrust Launched
Parallon Launched
HealthTrust Europe
Acquisition
Supply Chain
Consolidated into 18 centers
IT and Project Mgmt
Services developed
2009
160 hospitals120 ASCs
Market Dynami
cParallo
n Charter
Sharing “operator” expertise built upon 12 years of shared-service success to provide progressive solutions in a dynamic market
Intensifying financial and operating pressures related to reform, technology and point-of-care delivery evolution
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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)
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Parallon Client Snapshot
Business Performanc
e
Technology Solutions
HealthTrust Supply Chain
Workforce Manageme
nt