aptitude potential spend grows to $10 billion in first year

Hospitals, supply companies use healthcare's first online market to close direct deals within weeks instead of months

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Apr 22, 2014, 09:00 ET

IRVING, Texas, April 22, 2014 /PRNewswire/ -- It's been a year since aptitude LLC launched healthcare's first online market, forever changing the way hospitals and medical supply companies arrange to buy and sell supplies.

When the initial pilot program concluded in January 2013 – three months prior to the market launch of aptitude -- there were just 10 users: five hospitals and five supply companies. Since then, aptitude has grown to over 600 hospitals that boast a combined purchasing power of more than $10 billion along with supply companies that offer more than a million different products via the aptitude online portal.

The results have been breathtaking. Hospitals are saving an average of 10 to 15 percent off the current pricing agreements. Direct deals with suppliers that once took several months to close are now being finalized in an average of 38 days. Indeed, users are telling aptitude that it's the speed to value they find most attractive.

"Since our hospital's fees are tied to the volume cost of materials, we'll be able to deliver more efficient, less costly care to patients without jeopardizing quality, especially as online contracting takes hold," said Tim Ingram, director of materials management at Longmont Hospital in Colorado.

He continued, "aptitude offers the best of both worlds: additional savings with customized deals directly with a supplier." And because the whole process is automated, the contracts are managing themselves - cutting the time his hospital has to spend working on contracts. In fact, aptitude has already saved Longmont 16 percent in one category and 10 percent in another.

Chrissy Brooks, senior director national accounts at DeRoyal, a medical products manufacturer based in Knoxville, Tenn., said the online market has made the process of working with hospitals more transparent, helping them better understand the potential which in turn makes it easier to work out agreements.

"We embrace the opportunity to provide competitive pricing offers that are relevant to each buyer's individualized contract needs," Ms. Brooks said. "Our direct contracting efforts through aptitude have shown a positive ROI allowing us to better understand our business and improve our internal practices."

By automating the entire direct contracting process, supply companies are now able to monitor contracting performance. This assures them of receiving the same market share they bargained for in the price per volume they negotiated for in the contract, something that was once very difficult to do.

"By bringing the process online, hospitals now have a very easy way to control their costs and increase their access to a wider range of products," said Troy Kirchenbauer, general manager of aptitude. "And by offering supply companies a fast and easy way to market their products to hospitals, we bring value and innovation to both buyers and sellers in the healthcare supply chain."

For decades, hospitals around the country relied on large group purchasing organizations to pre-negotiate discounts with pre-selected suppliers on their behalf. But the approach doesn't always fit. In fact, studies have shown hospitals and supply companies will choose to work out their own direct deals nearly 40 percent of the time, a $55 billion spend nationwide.

About aptitude:

As healthcare's direct contracting market, aptitude LLC is meeting the evolving demands of today's healthcare organizations. Hospitals and suppliers are intrigued by how aptitude re-imagines the contracting model and provides the driving force for a more logical market in which both parties can achieve mutually beneficial, committed purchasing relationships for a better value proposition for both.

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SOURCE aptitude LLC