Novation company provides online platform for supply contracts

Novation, one of the largest group purchasing organizations in the U.S., formed a new company that will offer hospitals and other healthcare providers an online platform to negotiate tailored contracts for medical supplies.

Over the past year, several traditional GPOs as well as other companies have launched online or social media-based platforms that aim to streamline hospital purchasing practices as well as provide easier access to price information and clinical data.

Novation's new company, called Aptitude, will be available to hospitals and suppliers regardless of membership in Novation's network. It will operate as a wholly owned subsidiary of Irving, Texas-based Novation.

Aptitude executives say the platform can increase efficiency in negotiations for so-called local contracts, which are individualized contracts between suppliers and hospitals. Standard contracts are established by GPOs for their members.

“It was really born out of an effort to think differently and in a much more innovative way around the healthcare supply chain,” Novation President and CEO Jody Hatcher said. “How do we radically define the way buyers and sellers come together in the marketplace?”

Ongoing cost pressures and ensuing efforts to reduce supply costs are driving the development of the new technology. In addition, providers are increasingly looking for better data about the relationship between medical supplies' price and clinical outcomes as they determine what products they plan to purchase.

Hatcher also noted that while some elements of Aptitude's business are complementary to what Novation offers, in many ways they compete with the services and incentives of a traditional GPO.

“Otherwise I think someone else is going to do it for us,” he said.

Premier, another large GPO, launched PremierConnect in June of last year. The platform provides members with access to the company's clinical and financial databases as well as real-time data from electronic health records at hundreds of hospitals.

PremierConnect is a “reflection of where consumer market has been going for years,” said Bill Marquardt, vice president of portfolio management for the Premier healthcare alliance.

Curtis McEntire, a former pharmacy sourcing manager for the Intermountain Healthcare system in Utah, last year launched Mazree, a Salt Lake City-based business-to-business social network focused on the supply chain.

Among Mazree's offerings is a platform to solicit, sort and review requests for proposals in a standard format.

“The healthcare supply chain has many participants that don't communicate or collaborate very effectively,” Brent Johnson, Intermountain's chief purchasing officer and vice president of supply chain and imaging services, said in a news release announcing Mazree's launch in October. “It's a complex and costly supply chain. Mazree is a tool that has great potential to add significant value to the healthcare supply chain.“

Vendormate, an Atlanta-based provider of vendor credentialing and other services, is another company that has developed a supply chain-focused platform, called Medzo. The online tool pairs Vendormate-credentialed suppliers with hospitals and, the company says, can help providers find information about new vendors or emerging technologies.

Follow Jaimy Lee on Twitter: @MHjlee