Broadlane e-commerce exchange adds features

Broadlane Inc., a provider of supply chain services to the healthcare industry, announced that its private e-commerce exchange has successfully processed more than 3,500 hospital purchase orders in its first 44 days of operation.

Since it began processing transactions on April 10, the Broadlane Exchange has handled 35,000 purchase order line items from 53 Tenet Healthcare hospitals that bought medical supplies from Owens & Minor, Medline, and Tri-Anim. Tenet is a national operator of hospitals and related healthcare services, with 111 acute care hospitals in 17 states. Owens & Minor is the leading distributor of healthcare supplies in the United States. Medline and Tri-Anim are suppliers of a variety of medical-surgical supplies. By the end of May, Broadlane said it expects to have completed the integration of 100 Tenet hospitals with Owens & Minor, its primary distributor for medical/surgical products.

Broadlane counts among its customers 572 acute care hospitals and 2,335 sub-acute healthcare facilities. With the successful launch of its Exchange, the company is rapidly integrating its healthcare customers with additional key suppliers.

"The Broadlane Exchange will be of enormous benefit to our provider customers because it allows them to implement proven strategies to drive down their supply costs," said Trevor Fetter, chairman and chief executive officer of Broadlane. "And our supplier business partners are supporting our Exchange because of the benefits that will accrue to them. Those benefits include compiling and analyzing vital marketing data and more timely product usage information to help them plan their supply chain activities.

"I believe that it will be far easier for Broadlane than any other company to quickly build e-commerce transaction volume because of the unique characteristics of our largest hospital customers and their suppliers," said Fetter. "For example, integrating our seven largest existing customers with their seven largest suppliers will result in transaction volume for our Exchange in excess of $1 billion."

The Broadlane Exchange provides an order routing infrastructure and central repository for capturing purchasing information for the company's hospital customers. This is particularly attractive to Broadlane's large, multi-hospital customers that lack convenient methods of collecting and tracking procurement activity.

This was born out in a recent study conducted at one of Broadlane's customers by an independent accounting firm. At that multi-hospital system, the accounting firm found a potential five percent savings in supply cost from the application of e-commerce. Contrary to the conventional wisdom that e-commerce's primary benefit is in process cost savings, the study found that 71 percent of the savings were procurement related. This included such things as paying different prices for the same product, paying higher prices than previously contracted, and failing to take advantage of available discounts.

The comprehensive view of purchase activity provided by the Broadlane Exchange is the key to achieving these potential savings.

The Broadlane Exchange technology will allow the company's hospital customers to choose from three methods by which to integrate with suppliers using secure connections. Trading partners will be able to select from EDI, XML, or web-based ordering methods, depending on what best suits their existing technology platforms. Those methods utilize the public Internet, private Value Added Networks (VANs) or Broadlane's own website at www.broadlane.com.

To enable direct integration between customers and suppliers using the public Internet, the Broadlane Exchange provides a secure, reliable method of document transportation using the Internet. The Exchange affords a high level of security through the use of public/private key encryption while seamlessly integrating with a wide variety of legacy systems in use today by many of Broadlane's customers and suppliers. This option provides immediate savings for Broadlane's provider customers in the form of reduced VAN charges.

For customers who don't have sufficient volume to justify direct integration via EDI or XML, Broadlane provides access to the company's Exchange services directly through a web browser connecting to www.broadlane.com.

"We have created a flexible, scalable, and reliable e-commerce exchange that I believe will set a new standard in the industry," said Lee Marston, Broadlane's head of technology. "But for us, the end game is not transaction processing. It is to web-enable all of our information systems to deliver outstanding contract and procurement analysis services to our trading partners. Doing so will allow us to more rapidly deploy the collaboration and joint decision making opportunities that drive down supply-chain costs."

Through the remainder of the year, Broadlane plans to add a number of features to its Exchange. These include new transactions sets for invoicing, catalog updates, and advance-ship notification. The Broadlane Exchange will also provide supply-chain visibility features such as product usage statistics, contract compliance analysis, and comparative benchmark data for Broadlane's supplier trading partners. The product catalog component is also being expanded to provide comprehensive product cross-referencing, pricing audit analysis, and web-enabled contract management services.

Apart from its e-commerce technology developments, Broadlane has been rapidly building its core group purchasing organization (GPO) business. The company now operates the nation's fastest growing GPO. Recently Broadlane signed agreements with two large not-for-profit healthcare provider systems, Kaiser Permanente and Continuum Health Partners, as well as with MedCath, an operator of specialized cardiology and cardiovascular facilities.

Broadlane's customer profile has changed significantly in the past year, and its healthcare provider customers are now equally represented by not-for-profit and investor-owned organizations, as measured by annual supply spend.

About Broadlane

Through an extensive suite of services, Broadlane delivers supply chain services to the healthcare industry. Those services include group purchasing, procurement strategy and outsourcing and e-commerce services. Among the companies that focus on improving efficiencies within the healthcare supply chain, only Broadlane offers this full array of services.

Broadlane's customers include leading healthcare providers, in order of size, such as Kaiser Permanente, Tenet Healthcare Corporation, Universal Health Services, Community Health Systems, the Cleveland Clinic Foundation, IASIS Healthcare, Continuum Health Partners, Brim Healthcare, and others. Broadlane has offices in San Francisco, Oakland, Dallas and New York. For more information, visit www.broadlane.com.

Source: Broadlane Inc.

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