"We would never do that, said Rick Bayer, president and CEO, Healthcare Logistics Solutions LLC, Westerville, OH. "We simply manage information flow.
We're not trying to disintermediate anyone.We simply target the freight line item on the invoice.That's what our customers are interested in.
"Now if an IDN wants to eliminate the need for a distributor it's a strategy we fit into but it's not something we drive," he
continued."We are not going to providers to show them how to get into the distribution business."Bayer, who launched HLS five years ago with its HLS MedFreight "provider-driven" freight management program, is a former medical supply distribution company CEO himself (Bayer Medical Supply), a board member of the Health Industry Distributors Association and one of the key leaders of the HIDA-driven Efficient Healthcare Consumer Response Initiative (EHCR) in the late 1990s.
"Our whole slant is helping providers take control of freight information to help them drive freight costs down," Bayer
said."It's not really our role to take out distributors.We want to help providers take control over their information.They're paying a higher price for freight than they should, in terms of manufacturer shipping costs."In fact, Bayer
estimated that providers who use the company's HLS MedFreight system can save 40 percent on freight costs alone, an argument so potent that by the end of the month more than 500 hospitals - including some of the leading IDNs - will be using the system endorsed by all of the major GPOs, according to Bayer
The HLS MedFreight system hinges on what Bayer calls "mode optimization."Essentially, it's shipping product in the least costly way.Customers can go to the HLS Web site, for example, to access the company database on shipping options.
"Some hospitals and IDNs
may know how much they spend for freight as a top line item but aren't able to drill down for more specific information, such as how much per category or per facility or department," Bayer
admitted that freight management is a tremendous example of what EHCR tried to accomplish, so much that it lured him out of retirement."Managing freight better could take $300 million to $500 million out of the supply chain," he