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Broadlane, San Francisco, agreed in June to connect its electronic commerce system to the supplier-owned site run by Global Healthcare Exchange (GHX), Westminster, Colo. As a result, contract compliance could either improve or be more easily evaded, depending on hospitals' response to the wider choice of suppliers.
Under the deal, which participants say did not feature any equity payment by either side, Broadlane members will be able to buy from GHX suppliers through their own BroadLink e-commerce site, with all transactions automatically reported to their own accounting and inventory systems. Meanwhile, GHX suppliers will have access to Broadlane's 290 hospitals and other member facilities.
GHX estimated that the new connection will result in additional spending of $300 million annually. That represents money that Broadlane hospitals were spending on products ordered by telephone or other means because they did not have direct electronic access to the suppliers.
Increasing e-commerce use
Broadlane estimated that with the addition of GHX, most of its members will spend 60% of their annual purchasing volume online.
Lee Marsten, Broadlane's managing director of e-commerce and technology, said the decision to link up with GHX now was actually a result of supplier demand.
Since April 2001, the BroadLink site has been...