Joint venture to streamline health-care sourcing

Feb. 1, 2006
University of Pittsburgh Medical Center and CombineNet to commercialize a computerized sourcing model to connect suppliers of pharmaceuticals and medical/surgical equipment with health-care providers.

PITTSBURGH -- The University of Pittsburgh Medical Center and CombineNet have formed a joint venture, CombineMed, to lower costs and boost quality and innovation in health-care sourcing.

The partners will commercialize a computerized sourcing model called Expressive Commerce, which directly connects suppliers of pharmaceuticals and medical/surgical equipment with healthcare providers to allow for more efficient negotiations.

In the inaugural Expressive Commerce event, starting in late January, UPMC and two other medical centers will use the system to purchase more than $1 billion in medical supplies.

"As a leader and innovator in health care, UPMC is constantly evaluating technologies and practices that bring excellence to our clinical and administrative operations," said Chuck Bogosta, managing director of UPMC'S office of Strategic Business Initiatives.

"Our joint venture with CombineNet is a key part of our strategy to modernize the healthcare supply chain, cut costs and, most importantly, deliver better care to our patients."

In Expressive Commerce, suppliers can submit any number of Expressive Proposals via a secure Website. Expressive Proposals are seller-prescribed, sealed proposals that are creative in nature and can include conditional facets like volume and market-share based discounts and rebates, differing payment terms, package offers, and substitute items.

The process accelerates innovation transfer by strengthening collaboration
between buyers and sellers in the supply chain. The process improves innovation by creating efficiencies that not only allow suppliers to express what they do best, but allow buyers to evaluate such offers taking full account of their operating policies and procedures.

With unprecedented speed and accuracy, Healthcare providers use CombineNet's powerful combinatorial optimization engine to model all of their business constraints and choose the best array of goods and services to match their needs and preferences.

"Across many major industries, our solutions have been heralded as the way industry wants to do business," said Tom Finn, former Executive Vice President of CombineNet and President of the new Pittsburgh-based venture.

"We are ushering in a new era in healthcare supply network management that will improve patient care while helping to mitigate rising costs. We all benefit."