A Successful Corporate Innovation Effort in HealthcareIT: Bruce Johnson, CEO of GHX (Part 5)

Sramana: In that initial 9- to 12-month period when you were able to leverage the other sales forces, how many customers were you able to obtain?

Bruce Johnson: My recollection is that during the first 12 months we signed up 50 IDNs, or integrated delivery networks.

Sramana: Those were the buyers, right?

Bruce Johnson: Yes. On the supplier side we signed up an additional 30 suppliers during that time. That would be in addition to the 14 owners we had who represented the supplier side.

Today we have ownership that represents both the buy side and the sell side. We have ownership now from HCA, which is a large for-profit hospital chain. We also have ownership from group purchasing organizations, which are spending aggregators owned by hospitals themselves. We now have 20 different owners that represent the manufacturer, distributor, hospital, and PPO.

Sramana: So the original five investors have now increased to 20?

Bruce Johnson: Yes, that is correct.

Sramana: You had a very large upfront investment, some of which was used for acquisitions. What types of companies did you acquire and why?

Bruce Johnson: We acquired a technology company here in Colorado which had some content management and exchange technology that we needed. We acquired them in August 2000. The rest of our acquisition were in North American and Europe to acquire competitive exchanges which allowed us to bring in ownership from the buy side and the distributor side as well. We specifically brought in a distributor exchange in 2001. We also brought in two PPO exchanges, one of which was Neoforma in 2006.

Sramana: What does the landscape look like today? Are there other exchanges like this?

Bruce Johnson: There are a number of players who are in the B2B exchange space. That would be companies like MedAssets and Prodigo.

Sramana: You are still a private company, correct?

Bruce Johnson: Yes.

Sramana: What is the game plan on that?

Bruce Johnson: We want to continue to build out the network in order to drive greater savings. We are investing in the implantable category, which is an additional $40 billion of spending in the healthcare space that is not automated. We are also implementing new solutions that will help synchronize data between the large customer base today.

We have a critical mass of participants on our exchange. That is unique and allows us to solve problems that would be too costly to go after on your own. We are also able to do that as a trusted industry partner so that we can drive collaboration between the business partners to synchronize that information.

This segment is part 5 in the series : A Successful Corporate Innovation Effort in HealthcareIT: Bruce Johnson, CEO of GHX
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