Canada
Global HealthCare
Exchange Canada
Trade Exchange Adoption
A MIS 6150 Case Study
Monty Perham
Michael Aldor
Chen Ming Lee
Outline
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Canada
Organizational description
Organizational problem
Information aspect of problem
IT/IS impact on information
IT/IS-based alternatives
Pros & cons of alternatives
Chosen solution
Messages for modern leaders
Slide 2
Canada
Organizational Description
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GHX Background

Ownership
◦ Industry

Structure
◦ Global presence
◦ GHX Canada
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Management
◦ Separate and distinct
Organizational
Org Description
Description
Org Problem
Info Aspect
IT/IS Impact
Alternatives
Pros & Cons
Solution
Messages
Slide 3
Canada
Organizational Description
President/CEO
Executive
Coordinator
Chief Financial
Officer
VP Human
Resources
Exec. Director
Premier
Relationship
Organizational
Org Description
Description
Exec. Director
HCA
Relationship
Org Problem
Info Aspect
VP
Operations
IT/IS Impact
VP
Sales &
Marketing
Alternatives
VP General
Council
VP
Professional
Services
Pros & Cons
Solution
General
Manager
Europe
Messages
Slide 4
Canada
Organizational Description
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The GHX business model
◦ Open and neutral exchange
◦ “eBay” for healthcare supplies

Lower supply chain costs
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Organizational
Org Description
Description
Maximize products purchased electronically
Minimize the cost of connectivity
Automate manual processes
Reduce errors in the purchasing process
Org Problem
Info Aspect
IT/IS Impact
Alternatives
Pros & Cons
Solution
Messages
Slide 5
Canada
Organizational Description
2001 Health Care Expenditures
Pharmaceuticals
Public Health
Other
Professionals
Physicians
Residential Care
Capital
Hospital
Spending
Organizational
Org Description
Description
Org Problem
Info Aspect
IT/IS Impact
Alternatives
Pros & Cons
Solution
Messages
Slide 6
Canada
Organizational Problem
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Drive adoption rates
◦ Facilitate hospital and supplier adoption
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Recover costs
◦ Begin charging hospitals
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Overcome existing barriers
◦ Technology barriers
◦ Regulation
◦ Current processes and relationships
Org Description
Organizational
Org Problem
Problem
Info Aspect
IT/IS Impact
Alternatives
Pros & Cons
Solution
Messages
Slide 7
Information Aspect of Problem
Canada
◦ Hospitals
 Supply procurement is different for each hospital
 Who sells what and when can they deliver
 How to get the best price
◦ Suppliers
 Difficulty establishing relationships with hospitals
 Issues with billing and shipping services
 Provide up-to-date product info including pricing
◦ GHXC
 How to best manage above information
Org Description
Org Problem
Information
Info Aspect
Aspect
IT/IS Impact
Alternatives
Pros & Cons
Solution
Messages
Slide 8
Information Aspect of Problem
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Canada
Connecting Hospitals with Suppliers
◦ Existing: Point-to-point electronic connection
◦ Proposed: “Hub” method of exchange electronic
connection
Org Description
Org Problem
Information
Info Aspect
Aspect
IT/IS Impact
Alternatives
Pros & Cons
Solution
Messages
Slide 9
Information Aspect of Problem

Canada
Point-to-point simulation
◦ Each of you has a bag with a SKU (do not open)
◦ Hospital can only talk to one supplier at a time
◦ Need a volunteer to find SKU ABC123
Org Description
Org Problem
Information
Info Aspect
Aspect
IT/IS Impact
Alternatives
Pros & Cons
Solution
Messages
Slide 10
Information Aspect of Problem
Org Description
Org Problem
Information
Info Aspect
Aspect
IT/IS Impact
Alternatives
Pros & Cons
Solution
Messages
Canada
Slide 11
Information Aspect of Problem
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Canada
Hub simulation
◦ Need a volunteer to find SKU 59800021
Supplier
Pashniak, Dan
Bannister, Leah A.
Bedi, Parmeet K.
Buchholz, Mark G.
Chartrand, Shane A.
Derksen, Tanya G.
Fox, Casey N.
Gandhi, Michael
Gavinchuk, Trevor L.
Gerrard, Kimberley
Loewen, Christopher W.
Mann, Abby
Olson, Raymond Sean
Sanders, Christine J.
Swanson, Glen H.
Travica, Bob
Org Description
Org Problem
Information
Info Aspect
Aspect
Supplier SKU
ABC123
123XYZ
EEP123
CEC123
KIT123
KIT321
KIT222
KIT111
SMT123
TMS987
SMT383
SMT587
AEB123
BEA098
EAB474
EAN844
IT/IS Impact
Unified SKU
598000021
598000021
598000021
598000021
598000033
598000033
598000033
598000033
598000023
598000023
598000023
598000023
598000011
598000011
598000011
598000011
Alternatives
Pros & Cons
Solution
Messages
Slide 12
Information Aspect of Problem
Org Description
Org Problem
Information
Info Aspect
Aspect
IT/IS Impact
Alternatives
Pros & Cons
Solution
Messages
Canada
Slide 13
Information Aspect of Problem
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Org Description
Canada
GHXC has to show value in following areas to
hospitals and suppliers
Org Problem
Information
Info Aspect
Aspect
IT/IS Impact
Alternatives
Pros & Cons
Solution
Messages
Slide 14
Canada
IT/IS Impact on Information
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Many different types of systems
◦ Web-based
◦ EDI
◦ Custom solutions
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Org Description
High cost to get Hospitals and Suppliers
integrated
Org Problem
Info Aspect
IT/IS
IT/IS Impact
Impact
Alternatives
Pros & Cons
Solution
Messages
Slide 15
IT/IS Impact on Information
Org Description
Org Problem
Info Aspect
IT/IS
IT/IS Impact
Impact
Alternatives
Pros & Cons
Solution
Canada
Messages
Slide 16
Canada
IT/IS-based Alternatives
Solutions revolve around connectivity options:
 1. Single technology focus
◦ Web-based
◦ EDI
◦ Custom solutions
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2. Hybrid approach
◦ Combination of technologies above
Org Description
Org Problem
Info Aspect
IT/IS Impact
Alternatives
Alternatives
Pros & Cons
Solution
Messages
Slide 17
Canada
Pros & Cons of Alternatives
Single technology focus
Pros
Cons
Focus on needs of
distinct market class
 Reduces support costs
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Org Description
Org Problem
Info Aspect
IT/IS Impact
Limits customer
flexibility
 Reduces size of target
market
 Against “open” and
“neutral” business
model
Alternatives
Pros & Cons
Pros
Cons
Solution
Messages
Slide 18
Canada
Pros & Cons of Alternatives
Hybrid approach
Pros
Cons
Flexibility with
technical connectivity
 Meets needs unique to
each hospital
 Larger market
potential
 Follows “open” and
“neutral” business
model
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Org Description
Org Problem
Info Aspect
IT/IS Impact
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Increased complexity
Increased costs
Alternatives
Pros & Cons
Pros
Cons
Solution
Messages
Slide 19
Canada
Chosen Solution
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Hybrid approach chosen
◦ Flexibility of connectivity options
◦ More market and revenue potential
◦ Meets “open” and “neutral” business model
GHXC
Exchange
Org Description
Org Problem
Info Aspect
IT/IS Impact
Alternatives
Pros & Cons
Solution
Solution
Messages
Slide 20
Canada
Chosen Solution
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Regardless of technology, organizational
problem is adoption
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GHXC needs to:
◦ Distinguish exchange from traditional purchasing
◦ Convince customers that exchange provides
value
Org Description
Org Problem
Info Aspect
IT/IS Impact
Alternatives
Pros & Cons
Solution
Solution
Messages
Slide 21
Canada
Chosen Solution
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Strategies to facilitate adoption include:
◦ Education on cultural change of purchasing
◦ Financing for technology setup costs
◦ Generating perceived value by charging
hospitals
◦ Offer option of transactional versus subscriptionbased billing
◦ Partner with competitors to ease customer
connectivity
Org Description
Org Problem
Info Aspect
IT/IS Impact
Alternatives
Pros & Cons
Solution
Solution
Messages
Slide 22
Messages for Modern Leader
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Org Description
Canada
Communicate value to customers
Meet unique needs of different customers
Identify and reduce barriers
Take change management seriously
Leverage exponential benefit of networks
One system better than many independent ones
Effectively measure costs and benefits of IT
Use IT to drive costs out of the supply chain
Org Problem
Info Aspect
IT/IS Impact
Alternatives
Pros & Cons
Solution
Messages
Messages
Slide 23
Question & Answer
Canada
Slide 24