But Dallas-based Broadlane Inc. added a few new wrinkles into the mix, including hosting a competitive – and live – equipment assessment and bidding event 12 times a year (generally once a month) at its headquarters that features a variety of technologies with assistance by ECRI Institute. These "Live Group Buy Events" typically draw radiology directors and technologists, physicians, materials managers and administrators from Broadlane’s client base, as well as "viable" suppliers as determined by a client committee, according to Patricia Coffey, director of portfolio management.

"This strategy is different from other GPOs because we are not offering a capital ‘promotion,’ but rather, securing aggressive pricing, terms and conditions for a committed purchase," said Jocelyn Bradshaw, Broadlane’s vice president, capital equipment. "Committed purchases mean that if a client will purchase equipment during the term of the Group Buy contract, they will purchase from the awarded supplier."

Noted Coffey: "The traditional approach to ‘group buy’ is a promotion to an existing agreement. Broadlane believes that by hosting a competitive, live bidding process, the suppliers will offer their latest technology at aggressive price points. We achieve successful results because of our clients’ commitment to the process and suppliers realizing the value in gaining committed business. Additionally, while all of Broadlane’s contracts are awarded by our clients, this unique and interactive event promotes active client participation in negotiation and contract awards."

During a media briefing with Healthcare Purchasing News at the Association for Healthcare Resource and Materials Management’s 2008 annual conference in late July in San Antonio, Broadlane President and CEO David Ricker extolled the clinical and financial benefits of the Live Group Buys.

"The initial reason for doing it this way is that it’s a physician bonding strategy," Ricker told HPN. "It’s three days of physician interaction while the process is led by ECRI Institute. We think of it as a distinctive sourcing event. We compress all of the time and investment in evaluating equipment into those three days. It’s an education process where participants learn how the drive train works on equipment.

ECRI Institute manages technology assessment services for us, giving participants that deep dive into the technical aspects of equipment on display," he continued. "We also employ an elaborate scoring methodology that awards contracts to specific vendors. We use an electronic voting system that anonymously scores vendors by preferences."

Using this format, Broadlane has been able to narrow price differences between competing vendors, according to Ricker, the quote review system even going so far as to eliminate the 17 percent overcharge that is customary.

The Live Group Buy program works like this. Clients submit capital budgets and Broadlane selects modality events based on what those clients plan to purchase, Coffey noted.

Then Broadlane recruits participants, ranging from physicians, materials managers and end users at large integrated delivery networks to physician offices, which offer valuable insights into practices and procedures as well as a "unique interactive experience" that attendees seem to favor, Coffey said.

Broadlane encourages clients to go on site visits, organizing and providing evaluation forms for the process. "Clients who participate in site visits are generally more knowledgeable about the equipment when they arrive at the Live Group Buy," Coffey said. "Site visits also demonstrate to suppliers the commitment of our clients to this process."

Prior to the Live Group Buy participants attend a Pre-Group Buy conference call. "This meeting is essential because the clients develop the rating criteria on the call," Coffey said. "They review the technology, product specifications, warranty and service offerings as well as the model configuration used in the analysis model during the Live Group Buy Event."

Using ECRI Institute for "unbiased assistance in reviewing the supplier’s technology and providing insight to trends in the marketplace and emerging technology," Broadlane ensures that participants have an "apples to apples" comparison on all technology on display, she added.

During the event, each supplier presents its technology and bid offering to the client committee, which is an extension of Broadlane’s negotiating arm with the suppliers, according to Coffey. The technology is rated and the analysis is reviewed based on the clinical and technical assessment, operational support and total cost of ownership, she added.

While the client committee maintains negotiating power during the event, the clients determine which supplier should get their business, Coffey noted. "Broadlane makes a concerted effort to include all suppliers in its Live Group Buy program," she continued. "In fact, we continually research the marketplace to ensure that all viable suppliers are included in the RFP process. Additionally, the client committees are encouraged to inform us of any supplier that could participate. At times, the client committee makes a determination that a supplier should not move forward based on the technology criteria set during the pre-Group Buy conference call."

Pitfalls of used equipment

Equipment Financing

Group Buy

Terminology