GPO Industry Shuffles the Deck
September 19, 2010
Posted by chcablogadmin in : Group Purchasing
Two interesting developments occurred this week in the GPO industry. They are perhaps leading indicators of the changes in the industry and how they may impact CHCA and our Owner Hospitals. The first involves the acquisition of The Broadlane Group by MedAssets Inc. (See highlights below or link to full article.) MedAssets Inc. has made a number of key acquisitions in the past two or three years to strengthen their portfolio of non-GPO services. Broadlane has some excellent programs in supply-chain solutions and workforce management as well as an extremely compliant GPO program. MedAssets Inc. also recently made an unsolicited attempt to buy the University HealthSystem Consortium in a similar fashion to their CHCA approach a few years back.
The second development is the decision to close down Consorta after having aligned with HealthTrust Purchasing Group. (See highlights below or link to full article.) Consorta was formed by many of the large Catholic systems to concentrate both on group purchasing and faith-based health care. The group was never able to amass enough purchasing volume and made a well-thought-out decision to align with HealthTrust which is composed primarily of HCA and other for-profit chains. Consorta had not developed alternative business lines or value propositions for its owner systems.
The industry is now very well positioned with the five or six major group purchasing organizations all having sufficient volume to maintain clout with the vendor community. Each GPO will develop additional value services for the members and owners as they try to differentiate their positions in the marketplace. Groups like CHCA, Greater New York Hospital Association and Yankee Alliance along with the 125 integrated delivery systems will seek a best-of-breed positioning with these GPOs while offering niche services to their constituents. The industry is very united around the key issues addressed by congressional oversight and working well on issues of transparency, bar coding, drug prices, vendor credentialing and effective supply-chain.
MedAssets to acquire Broadlane for $850M
MedAssets Supply Chain Systems (Alpharetta, GA) announced it will acquire The Broadlane Group (Dallas, TX) for approximately $850 million. Broadlane is mostly owned by private-equity firm TowerBrook Capital Partners LP. Terms of the acquisition call for MedAssets to initially pay $725 million at closing and an additional $125 million in January 2012. The combined company will offer supply-chain solutions, outsourcing and workforce-management services. MedAssets expects the deal to increase adjusted earnings per share by between $0.05 and $0.10 in 2011 and to increase cost savings by at least $20 million of cost savings. The acquisition is expected to close in 60 to 90 days. MedAssets will fund the deal through financial commitments from JP Morgan and Barclays Capital.
Consorta to Cease Operations
Consorta Inc (Schaumburg, IL) announced that its board recently reassessed the partnership between Consorta and HealthTrust Purchasing Group (Brentwood, TN) and now plans to transfer its remaining GPO operations to HealthTrust. Consorta will cease operations on December 31, 2010. Consorta and HealthTrust partnered in 2007 and over three years, most GPO operations have been transitioned to HealthTrust. Consorta anticipates that it will take several months for it to wind down operations, and the transition should be complete by the end of 2010. Consorta will remain as the corporate entity that binds shareholders together and brings their collective voice to HealthTrust, but it will not employ staff or provide any additional GPO services.
Comments»
no comments yet - be the first?