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HealthTrust Europe

HealthTrust Europe. Purchasing Power for Healthcare Fiona Chew – Director of Account Management International Innovation Case Study – Entry of a US GPO into UK Healthcare Purchasing. US GPO Landscape.

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HealthTrust Europe

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  1. HealthTrust Europe Purchasing Power for Healthcare Fiona Chew – Director of Account Management International Innovation Case Study – Entry of a US GPO into UK Healthcare Purchasing

  2. US GPO Landscape • Group Purchasing Organisations – aggregate purchasing volumes of US healthcare organisations to utilise leverage and negotiate effective contracts. • First US GPO created 1910. Numbers grew slowly until last quarter of 20th C. • Nearly every hospital facility in the US now uses the services of at least one GPO. • Period of consolidation in the market. • Some “shopping around” by facilities to find the best GPO • Top 4 GPOs account for $155bn purchasing spend. • Saturated market – further consolidation and vertical integration expected.

  3. HealthTrust Purchasing Group (HPG) • Established in 1999 • Commonly listed as 4th largest US GPO (following MedAssets, Premier & Novation) • Headquartered in Brentwood, Tennessee (Nashville)

  4. HealthTrust Purchasing Group (HPG) • Manage over 1200+ supplier agreements representing over $21B of annual contracting volume • Serves as the exclusive Group Purchasing Organization for over 4000 USA healthcare facilities • Approximately 25% (1400) of the hospitals in the USA utilize HealthTrust as their sole Group Purchasing Organization • Broad contract portfolio with “One Price For All” philosophy • Customer focused - 99% customer retention rate • 7-12% price advantage over other GPOs • Acquisition of Consorta GPO - 2011

  5. Horizontal Integration: HPG Innovation Enters the UK • 1st April 2011 – HPG established “HealthTrust Europe” • Formed via the purchase of Healthcare Purchasing Consortium – an NHS collaborative procurement hub. • Jointly owned by HPG and HCA International • HCA International - owner of 6 private hospitals in the UK e.g. London Bridge Hospital and 3 joint ventures with the NHS e.g. Harley Street at UCLH • UK – strategic market entry

  6. HealthTrust Europe Our Mission “HealthTrust Europe is committed to providing best value, significant savings and supply chain expertise to the health care sector across the broadest range of products and services. HealthTrust Europe will achieve its vision of becoming Europe’s number one group purchasing organisation by improving services to patients and the care they receive through best procurement solutions”. Our Vision “To be the leading European group purchasing organisation: delivering excellence to our members through dynamic and efficient procurement and commercial solutions”. • Represent NHS Trusts nationwide • Contract in medical, pharmacy and corporate areas for our members

  7. HPG Worldwide Locations • We are global in scope • Headquarters for HCA, Parallon and HealthTrust Purchasing Group are based in the U.S. • HealthTrust Global Sourcing office based in Shanghai, China • HealthTrust Europe based in Birmingham, with offices in London

  8. Member Alignment & Vendor Administration Fees • Members are expected to maintain a highly committed relationship with HTE by avoiding: • Self contracting efforts • Use of non-HTE services when service is available from HTE • Use of other group purchasing organizations • US GPO model is funded on basis of vendor admin fees • Small percentage fee paid by contracted vendors • Permitted by US “Safe Harbor” regulations • Admin fee is paid when a member uses the contract • Surpluses are repaid to members • Same model applied to creation of HealthTrust Europe • Enabled lower member “subscription” fees • Innovative model = challenge to suppliers = pockets of resistance

  9. European Expansion • HealthTrust Europe = Strategic launch point for HPG into Europe • Germany – strong existing GPO landscape • Poland – no collaborative purchasing • Challenge – local infrastructure, language barriers

  10. Vertical Integration - Parallon Consultative Services Analyze, assess need and provide solution sets End-to-end Revenue Cycle Improved financial performance, cash flow and efficiencies Workforce Strategic labor, staffing and recruiting Healthcare Technology Turnkey services, data warehousing and disaster recovery Supply Chain Procure to pay, including logistics Group Purchasing Immediate and sustainable procurement savings across all product and service categories Project Optimization Activates strategies and provides best-in-class PM support Population Health Management Physician affiliation structures, governance, management structure and key processes to address shared risk

  11. CoreTrust Europe Launched in 2006 in the U.S. Over 45 contract offerings in the U.S. and 6 offerings in Europe 210+ members – domestic and international $1 Billion in captured spend

  12. CoreTrust Europe CoreTrustMilestones: • 2006: Partnered with Blackstone • 2008: Partnered with KKR, Bain, Welsh-Carson & others • 2009: Completed “refresh” in multiple strategic categories • 2011: EU-based resources in the United Kingdom • 2012: Use of CoreTrust Europe agreements in EMEA & APAC Membership Sample:

  13. Thank-you for listeningFiona ChewDirector of Account ManagementM: 07984 598 576E: fiona.chew@healthtrusteurope.com

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