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At the end of the 1990s, LifePoint and Triad decided to spin o
from the Hospital Corporation of America (HCA). As head of sup-
ply chain operations for HCA, Jim Fitzgerald and his team were
seeking an e ective way to continue combining the purchasing
power of all three IDNs to leverage the industry-best pricing they
had obtained as an HCA collective.
He recalls that as they looked at alternative structures to support
the business goals, from a legal standpoint, the structure inherent
in starting their own group purchasing organization (GPO) made
the most sense. In addition to supporting the three founding part-
ners of the business, growing this new GPO became a longer-term
goal. They did that by inviting other business partners to join who
shared a common vision and culture related to improving both
patient care and operations.
While HCA leadership had strong support for the idea of this new
GPO, Fitzgerald indicates there was also some healthy skepticism
that they could actually pull it o . However, since Fitzgerald and
the supply chain team were fortunate to have built a strong track
record with HCA operators over the years, they were given the go-
ahead to establish the "yet to be named" purchasing group.
Initially, they struggled with finding a name that was not already
registered to someone else. The team looked internally at HCA-
owned names and found the name "HealthTrust." Turns out it was
the name of a hospital company founded by Clayton McWhorter
that had been acquired by Columbia-HCA in the early 1990s. So,
while the name "HealthTrust" was o cially retired, it was still
owned by HCA. Fitzgerald made a personal call to McWhorter, ask-
ing for permission to use the name. And, with that, HealthTrust---the
purchasing group---was launched.
Build It and They Will Come
In the early years, HealthTrust experienced some modest growth
by attracting outside members, with Vanguard as the first non-HCA
IDN to join. Although at first the industry perceived HealthTrust
as a GPO that was controlled by HCA and its former a liates, that
perception began to change when Fitzgerald was introduced to
Johnny Owenby, senior vice president of supply chain for Health
Management Associates (HMA). Owenby was struggling with his
current GPO and looking for a business model that would improve
"I owe Johnny and HMA a great deal of gratitude for taking a leap
of faith and joining us. They became our first non-HCA a liated
equity partner," Fitzgerald says.
Growth accelerated after that. Struggling with the same former
GPO issues, Tim Marlette with Community Health Systems
(CHS) took Owenby's recommendation and came on board as
HealthTrust's next partner in 2005. By that time, with membership
growing in excess of 20 percent, HealthTrust's value proposition
was measureable and real.
In 2007, the organization had the opportunity to begin working
with what was known then as the Consorta GPO that was owned
and directed by 10 large Catholic nonprofit hospitals. Feeling that the
HealthTrust business model and culture were a good fit, Consorta
CEO John Strong recommended to his board that they become
an equity partner as well.
Fitzgerald points out that this partnership was a significant
event in HealthTrust's history. While HealthTrust had a large
number of nonprofit members at that time, it was the first time they
had brought in large IDNs that were fortunate to have a religious
a liation. Fitzgerald expresses his gratitude for leaders like Lou
Fierens, senior vice president of supply chain for Trinity Health
(and chair of Consorta's board at the time) and Florence Doyle,
senior vice president of supply chain for Catholic Health East
(CHE), as well as the larger team from both organizations that later
made an o cial merger happen in late 2010.
After hearing positive things from CHS and HMA about their
experience with HealthTrust, Universal Health Systems (UHS)
decided to join in 2008.
While Fitzgerald says it happened incrementally over time, each
partner has brought significant value to the organization.
"Our board is made of people who care and have a passion
for the IDNs they represent and the people they serve," he says.
"They've donated their expertise to build and support HealthTrust
and because of them, we have broadened our perspective and
knowledge of the challenges of supply chain and providing high
BOARD OF DIRECTORS
Regarding the contributions of its Member Advisory
Board of Directors, Fitzgerald says, "Every one of these
partners has brought unique value and insights as to the
needs of our customers and broadened our knowledge.
We have valued and appreciated the time that each of
these board representatives have spent in helping us build
our business." Board members are:
TIM MARLETTE, Community Health Systems
GREG HOSTETTLER, LifePoint
DIANE ROSSI, Universal Health Services Inc.
JOHNNY OWENBY, Health Management Associates Inc.
FLORENCE DOYLE, Catholic Health East
LOU FIERENS, Trinity Health
STEVE KEHRBERG, Catholic Health Initiatives
BOB BEYER, Hospital Sisters Health System
JEFFREY FRANCIS, Ministry Health Care
ROBERT LANGLAND, St. John Health System
JOEL HOFF, Sisters of St. Francis Health Services Inc.
CAL FRYE, Via Christi Health, Inc.
MICHAEL LEPORE, Wheaton Franciscan Services Inc.
JON WACHS, Consorta
continued on page 34
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