Global Healthcare Exchange (GHX) has announced that it has signed a definitive agreement to acquire Pittsburgh, Penn.-based Prodigo Solutions, Inc. (Prodigo), a supply chain and data enablement technology company.
In 2023, hospitals are seeking a return to profitability even as they continue to experience the same challenges that made 2022 the most financially difficult year since the start of the COVID-19 pandemic, including persistent inflation, higher labor expenses, and lower patient volumes.
Prodigo’s offerings help to broaden the healthcare supply chain’s span of control, expanding the potential for savings across multiple categories of spend (including non-traditional categories such as purchased services, minor equipment, and labor) and across a quickly expanding continuum of care (including acute, non-acute, clinics, offices, and direct-to-patient care). Prodigo shapes demand by directing spending toward contractually compliant and cost-optimized product options during the procurement process. As a result, health systems achieve higher contract utilization, maximize savings associated with committed contract terms, and support sustainability objectives that are becoming essential components of modern supply chains.
Prodigo’s Path to Value Benchmark Study concluded that health system supply chains have less than 45 percent of supply chain spend flowing through ERP managed Item Master items, with less than 60 percent of purchases in healthcare being tied to valid, active contracts.
“Studies like this confirm the urgency health system executives feel to become more lean and efficient,” said Tina Vatanka Murphy, president and CEO at GHX. “Achieving 5-8 percent cost reduction through active contract price management is a critical lever in helping organizations achieve their aggressive savings goals. We are delighted to welcome the Prodigo team to GHX.”
According to McKinsey, supply input costs have risen 15-25 percent between 2019 and 2022 and by 2027, inflation could result in an additional $370 billion in healthcare spending above the expected baseline increase.
“Connecting Prodigo’s directed buying capabilities with GHX’s industry leading platform and collection of enriched and validated supply chain data, will allow healthcare providers to better identify opportunities to increase financial control, reduce supply chain costs, eliminate waste, and improve contract compliance,” said Prodigo’s executive chairman and president, Joseph Mayernik. “We are excited for the opportunity to create even greater impact for our joint customers and the broader industry.”
Prodigo represents the fourth acquisition by GHX in as many years, focused on delivering solutions that simplify the patient-centered business of healthcare to improve outcomes. In February 2022 GHX added Syft, a leading provider of AI-enhanced inventory control and end-to-end supply chain management software and services.
Following the transaction close, Prodigo will operate as a wholly owned subsidiary of GHX. Financial terms of the transaction were not disclosed. Cleary Gottlieb acted as legal advisor to GHX. Bass Berry & Sims acted as legal advisor to Prodigo Solutions.
Prodigo was founded in 2008 by UPMC, the world-renowned Pittsburgh-based healthcare provider and insurer. Today, Prodigo is supported by UPMC Enterprises, the innovation and commercialization arm of UPMC, and serves some of the largest, leading health systems in the U.S. GHX will retain the Cranberry Township location.