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1.       How would you describe your company?

2.       When was the company launched?

3.       How is Medical Supply Chain different from other dot-coms or the Global Healthcare Exchange?

4.       Aren’t healthcare providers mainly just interested in medical products? What products can be accessed through Medical Supply Chain?

5.       What is your market penetration strategy?

6.       Several large Group Purchasing Organizations have created strong partnerships with and in some cases invested in E-Commerce companies. Does Medical Supply Chain plan a similar strategy?

7.       How can you get hospitals to work with you if their GPOs-and in some cases IDNs are marketing a competing e-commerce solution (i.e. Medibuy, Neoforma, Broadlane)?

8.       Will you try to force customers to standardize their products?

9.       With so many choices, why should the healthcare provider select Medical Supply Chain as their supply-chain partner?


 

1.  How would you describe your company?
Medical Supply Chain (MSC) provides self-directed supply-chain services designed to capture and manage usable data for the health system. The Company foundation is built on demand principles, thus allowing Health system material managers to more effectively manage their supply-chain and their partnerships. MSC delivers value through a balanced approach that includes a sound customer driven business model with a deep understanding of the healthcare supply-chain landscape and the challenges that face today's Health systems.

2.  When was the company launched?
The company was officially launched May 30th, of 2000 and has completed its R&D studies. The company's products and services indicate sizeable cost reductions over existing manufacturer, distributor and GPO sponsored service programs. 

3.  How is Medical Supply Chain different from other dot-coms or the Global Healthcare Exchange?

o        Medical Supply Chain is health system centered; it exists purely for the benefit of the health system. It is not a disguised store front for the selected few manufacturers, GPO’s, and distributors who can afford to build management programs then make claims about how much they are helping their customers when they are really helping themselves a whole lot more. Similar to a service company (Phone Company) our purpose is to provide services for our customers, not control how they use the service. Does the Global Healthcare Exchange (owned by a consortium of manufacturers and distributors) really have the best interests of their customers in mind or are they simply seeking to prevent competition similar to a cartel. Do the GPO’s really have the best interests of their members in mind or are they just trying to control the purchasing habits of their members while maximizing administrative fee revenues for themselves. It seems all of the existing self-interests are more focused on using their services to sell products rather than seriously addressing the needs of the health system.

o        We operate on a pull model. Most existing service companies operate on a push model. The ultimate goal of any service should be to increase efficiency and provide the lowest possible cost of doing business. Most companies, if not all, are focused on using technology to assist suppliers in pushing product through the supply-chain. Suppliers and E-Commerce companies need sales transactions to make money, which drives whatever the market will bear. In fact, much of the management of these firms are drawn from product selling organizations. The result of push is often too much inventory in the health system possession, inconsistent and inaccurate utilization data, and manufacturer production schedules that are misaligned with the health system needs. Medical Supply Chain’s solutions provide many of the elements already enjoyed by customers using MMIS or ERP systems. This allows demand or pull to be created based upon actual consumption of product thus minimizing product in the supply-chain, improving upstream flow of data to synchronize manufacturing schedules with demand, and improving cash flow for all links in the supply-chain. Our fees are based upon the value delivered by our solutions and are not an arbitrary add-on to whatever the price of a product.

o        Our revenue model is fair and value based. Most of the early dot.coms offered free services to the buyer and expected the seller to pay for everything. Savvy buyers know that getting something for nothing just does not happen. Whatever the cost to the sellers is, buyers know that cost will eventually be passed on to them. At Medical Supply Chain we respect the intelligence of health systems. For that reason, we charge a simple monthly user fee per buyer. Because our services substantially reduce total supply-chain costs for health systems we apply a minimal value based fee for our services. Our fees, which are spelled out in advance of the service covers the costs of providing our solutions and is more than offset by the lower total supply-chain cost enjoyed by our health systems customers. Using the phone company analogy, the user fee represents the monthly service fee and the value-based fee is similar to long distance that is billed based on usage. Charging the buyer a fee not only respects their intelligence but it also makes them a true partner with a vested interest in the success of their supply-chain initiatives. We believe that this approach plus a valid value proposition will create a superior rate of return for health systems.

    Medical Supply Chain is the single solution for all of the tangible goods purchased by the healthcare provider. Most of the remaining dot.coms are largely focused on medical products mainly because most of their management comes from a medical product sales background. This is just more focus on pushing products. We believe that true efficiency can only come from each healthcare provider having the capability to access all of their product needs for their entire organization through a single solution that the health system controls. For this reason we facilitate all product categories through a Single Source, Total Solution.

4.  Aren’t healthcare providers mainly just interested in medical products? What products can be accessed through Medical Supply Chain?
One of the challenges we have in the healthcare industry is a lack of solid data in the area of annual spend by commodity. We have extrapolated information from HIGPA and other organizations which has shown that medical products may represent as little as 25% of the annual non-labor spend of hospitals and health systems. It should be noted that other sources have presented conflicting information. The other products we are talking about are food, dietary supplies, laboratory products, office products, computers and supplies, environmental service products, MRO, and a host of other products, any tangible item purchased by a healthcare provider.

5.  What is your market penetration strategy?
The initial phase of our market strategy entails customer education and introduction to The Company’s products and services, as well as, the benefits and value generated by them. MSC management has completed extensive market research in this area and consulted with a wide audience with overwhelming acceptance to our products and services. The Company’s products and services offer many of the elements already utilized by health systems managing business processes with Material Management Information Systems (MMIS) or Enterprise Resource Planning (ERP) systems. MSC products and service can bridge these systems or can be browser driven independently through an interface for those health systems that can't afford capital expenditures of IT development. These products and services provide each individual health system with complete administrative control over the services and function required to execute an efficient supply-chain. The Company refers to this process as "Self-Directed Supply-Chain Initiatives".

6.  Several large Group Purchasing Organizations have created strong partnerships with and in some cases invested in E-Commerce companies. Does Medical Supply Chain plan a similar strategy?
There are no plans to duplicate the current GPO strategy. Like all links in the supply-chain there is a legitimate role for the GPO provided they can demonstrate a clear value to their customer. We plan to attract customers on the value of our services. We are not a GPO. That is not our role. We do not see a need for us to partner with a GPO and we do not see the need for a GPO to partner with us. There seems to be wide agreement that there is financial opportunity for anyone who can be in the middle of the purchase transaction. When the GPOs and dot.coms started getting together many seemed to assume that it was the dot.coms who needed the GPOs to provide them with customers. In fact, the reason for these partnerships may have more to do with the GPOs’ desire to find a role for themselves in the purchase transactions of their members. Creating contracts, which GPOs do, is quite different from creating supply-chain efficiencies. It is quite possible that the GPOs needed the dot.coms to ensure their place in the supply-chain.
The value of our products and services will present our customers with the opportunity to reconsider their need for a GPO relationship. However, we will not influence our customers to move in either direction and there is no need for them to do so in order to utilize our products and services.

7.  How can you get hospitals to work with you if their GPOs-and in some cases IDNs are marketing a competing e-commerce solution (i.e. Medibuy, Neoforma, Broadlane)?
We are not in competition with any link in the supply-chain including GPO's. Our customers are free to use a GPO or not. It is their decision. If a GPO member uses our services they will be free to report utilization information to their GPO through our reporting capabilities. Health systems will use our service only because it offers them the ability to manage their supply-chain in an efficient and cost effective manner. We are providing a service that facilitates supply-chain efficiencies and reduces total supply-chain cost. We are not seeking to control the actions or buying decisions of our customers. That is their prerogative and it is not our place to interfere in those decisions.

8.  Will you try to force customers to standardize their products?
Standardization is important to the healthcare provider. Fewer products to manage and fewer line items to buy will reduce process costs and drive down product costs. We will encourage standardization but it will be up to the customer to make his or her own product standardization decisions. Only they will know the proper balance between minimizing line items and meeting the needs of a diverse patient population and clinical staff preferences.

9.  With so many choices, why should the healthcare provider select Medical Supply Chain as their supply-chain partner?
Value does not exist just because we say it does. It exists because, our value is in the products and services we provide for health systems. Our value is further enhanced by our ability to keep costs low and dramatically improve the return on investment for our health system customer. We have not spent millions of dollars in development, start-up or large infrastructures; therefore it is not necessary to overcharge health systems for the services we provide. This allows for a much lower commitment of finances for our company over many of the others. Our revenue model is built from what is needed, not from what the market will bear. Health systems are the direct beneficiaries of our commitment to be financially responsible and viable.


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