UPMC, CombineNet Forge Joint Venture to Streamline Healthcare Sourcing

System to be used during inaugural sourcing event to purchase more than $1 billion in medical supplies

System to be used during inaugural sourcing event to purchase more than $1 billion in medical supplies

Pittsburgh — January 24, 2006 — The University of Pittsburgh Medical Center (UPMC) and CombineNet have formed a joint venture, CombineMed, to lower costs and boost quality and innovation in healthcare sourcing.

The partners said they 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 Web site. 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 is designed to accelerate innovation transfer by strengthening collaboration between buyers and sellers in the supply chain, according to CombineNet. The process also 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. Healthcare providers use the 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.

Additional Articles of Interest

  • — For more information on the current state of the sourcing market, see the article "The Analyst Corner: Sourcing" in the June/July 2004 issue of Supply & Demand Chain Executive.