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Industry leaders create Internet health care exchange
Advocates claim the online exchange should make business more efficient and less expensive.
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CHICAGO — Five major health care companies announced the creation of an independent Internet venture designed to facilitate the business process related to the purchase and distribution of medical devices and health care products and services worldwide.
Johnson & Johnson, GE Medical Systems, Baxter International Inc., Abbott Laboratories and Medtronic Inc. joined to begin the formation of a global health care exchange, an innovative way for customers to gain access to a variety of health care manufacturers, suppliers and distributors at a single Web site.
The exchange will integrate with the existing information systems at hospitals, allowing electronic access to a variety of medical device and health care product suppliers. “[Professionals at] a hospital that subscribes to the service can easily go in, place their order and access various services associated with their order,” said Sara Colamarino, a spokesperson for Johnson & Johnson Health Care Systems. Subscribers will be able to monitor their orders, check delivery status and gain valuable clinical data online.
This will be an improvement over the antiquated methods of purchasing that now exist, she said. Current methods do not provide a singular management system, are not capable of offering clinical data and generally require multiple suppliers and an abundance of paperwork.
A cost-effective tool
Proponents claim an overwhelming advantage of the exchange for both customers and patients is the potential for a reduction in health care costs.
“This new online exchange has the potential to dramatically reduce the number of technology systems we currently need to procure and purchase products, as well as provide access to accurate and timely information. It should save time and money and enhance our focus on what we do best: providing the best possible care for our patients,” said William J. Donelan, executive vice president of Duke University Health System.
James Lenehan, worldwide chairman of Johnson & Johnson’s Medical Devices, Diagnostics and Health Systems Group, agreed. “Every health care system around the world is under enormous pressure to create efficiency and take out costs. This exchange is a big part of the solution — access to state-of-the-art supply chain management and clinical content without the capital expense,” he said.
Global exchange expansion
The exchange will go online in the third quarter of this year, focusing initially on a U.S. customer base. Plans are in the works to expand and offer the services of the exchange globally to health care providers by 2001.
When it is launched, the exchange will offer a variety of online services, including customer-directed ordering and distribution, order status inquiries, order confirmation, product catalogues and access to contract terms. Customers also will have the opportunity to browse through clinical information on a broad range of products.
Although the exchange is still under development, support for the program among industry giants continues to grow. Only 2 weeks after the five original health care companies revealed their global exchange objectives, three other health care device manufacturers — Becton Dickinson, Guidant Corp. and Boston Scientific Corp. — pledged their commitment to the program.
“The goal is to make this as open as can be and to involve as many manufacturers as possible,” Ms. Colamarino said. “The reason is that it continues to simplify the buying process for hospitals.”
Customer service, ordering efficiency and a reduction in cost are the primary factors that have led these newcomers to the exchange. “We believe that effective communication with our customers will ultimately lead to better care for our patients around the world,” said Ronald W. Dollens, president and chief executive officer of Guidant.
According to Jim Tobin, president and chief executive officer of Boston Scientific, “This exchange will help us better serve our customers and their patients by making it easier and less expensive to obtain high quality, innovative products from us and the other contributors to the exchange.”
Editor’s note:This article originally appeared in Orthopedics Today, a SLACK, Incorporated publication.