Medical Device Link.

Originally Published MX July/August 2003

ADVERTISING, DISTRIBUTION, & SALES

The contraction of the dot-com bubble of the 1990s weeded out the weakest of the Internet healthcare companies and drove the more imaginative and forward-looking to reconstitute themselves, occasionally through mergers and strategic alliances with the surviving trading exchanges.

MedAssets, for example, was founded in April 1999 as an exchange for used capital equipment. Today, it is one of the fastest-growing group purchasing organizations (GPOs) in the industry.

Similarly, Broadlane migrated to the GPO model after its launch in early 2000 by Tenet Healthcare and Ventro, a now-defunct builder of vertical marketplaces, as a venture to sell medical products over the Internet to hospitals and physicians. Broadlane continues to offer a proprietary trading exchange for its customers.

An early technology start-up in 1996, Neoforma today is more closely associated with its GPO majority owner, Novation, and primarily serves hospital members of the large GPO. Its services are, however, available to a broader market.

Launched in August 1998, Medibuy was intended to be a buyer-centric and vendor-neutral exchange. In 2001, it acquired the e-commerce units created by the GPO Premier and the healthcare services giant HCA Inc. Last year, Medibuy merged with GHX (see below) to form the world's largest trading exchange (based on number of participants).

In 2000, five leading distributors created what became known as HealthNexis. The intention was not to compete with other exchanges, but rather to focus on issues related to industry standards, electronic catalogs, and the rebate process. HealthNexis, too, merged with GHX.

Global Healthcare Exchange (GHX) was founded by five medical technology companies in March 2000 and is now owned by companies representing the entire supply chain. Designed as an open and neutral electronic trading exchange, GHX distinguished itself by its revenue-neutral business model. It maintains strategic alliances with most U.S. GPOs and is integrated with both the Neoforma and the Broadlane exchanges. The latter arrangement enables GHX suppliers to conduct business through one Internet connection with providers participating in the other two exchanges.

Copyright ©2003 MX