Broadlane Concludes Agreement to Provide Sourcing and Contracting Services to Nation's Leading...

Business/Health Editors

SAN FRANCISCO--(BUSINESS WIRE)--Feb. 6, 2001

Kaiser Permanente to Outsource Much of its Supply Chain Management

Broadlane Inc., a leader in delivering supply chain services to the healthcare industry, announced that it has concluded an agreement

Under the 10-year agreement, which becomes effective today, Broadlane takes responsibility for much of Kaiser Permanente's contracting and group purchasing services, which is expected to result in significant savings for Kaiser Permanente's 35 hospitals and multiple other healthcare delivery sites in 11 states and the District of Columbia.

Those savings will come from Broadlane's supply chain expertise as well as from combining Broadlane's existing customer purchase volume with that of Kaiser Permanente. Both Broadlane and Kaiser Permanente are noted in the industry for the high degree of compliance they are able to demonstrate with supplier contracts. High compliance is one of the key elements that leads to lowest-possible pricing.

"This is the largest such collaborative agreement that I know of in the healthcare industry and it is a clear example of the ways that the most progressive and innovative healthcare providers are looking to pull costs out of their supply chain," said Trevor Fetter, chairman and chief executive officer of Broadlane. "Since signing an agreement in principle with Kaiser Permanente in December, our two organizations have been working very smoothly in preparation for this important day."

Under the agreement, Broadlane is opening an office in Oakland, Calif. where Kaiser Permanente's national office is located. That office will be staffed by Broadlane employees, some of whom have been hired from Kaiser Permanente.

In addition, Kaiser Permanente will be given two seats on Broadlane's Board of Directors. Joseph Wm. Hummel, senior vice president, National Contracting and Purchasing for Kaiser Foundation Health Plan Inc. and Oliver Goldsmith, M.D., medical director and chairman of the board for the Southern California Permanente Medical Group, are expected to be elected to those seats.

Kaiser Permanente will also assume the chairmanship of Broadlane's new Advisory Board, which is in formation. The board, which will consist of key Broadlane business partners, will provide strategic advice to Broadlane as the company expands its service offerings.

"As a non-profit healthcare organization committed to providing the highest quality care to our eight million members, this agreement ensures our healthcare providers continue to have broad access to quality medical equipment and supplies while honoring our responsibility to manage our members' premium dollars effectively," said Dale Crandall, president of Kaiser Foundation Health Plan.

About Broadlane

Through an extensive suite of services, Broadlane delivers integrated supply management solutions to the healthcare industry. Those services include strategic sourcing and contracting, contract compliance and utilization management, and automated procurement and data management. Among the companies that focus on improving efficiencies within the healthcare supply chain, only Broadlane offers this full array of services.

Formed in December 1999, Broadlane's customers include Tenet Healthcare Corporation (NYSE: THC), Universal Health Services (NYSE: UHS), Community Health Systems (NYSE: CYH), IASIS Healthcare, the Cleveland Clinic Foundation, and others. Broadlane has offices in San Francisco, Calif., and Dallas, Texas. For more information visit www.broadlane.com.

About Kaiser Permanente

Kaiser Permanente is America's leading integrated health care organization. Founded in 1945, it is a non-profit, group-practice prepayment program with headquarters in Oakland, Calif. Kaiser Permanente serves the health care needs of more than eight million members in 11 states and the District of Columbia. Today, it encompasses Kaiser Foundation Health Plan Inc.; Kaiser Foundation Hospitals; and the Permanente Medical Groups, as well as an affiliation with Group Health Cooperative based in Seattle, Wash. Nationwide, Kaiser Permanente includes approximately 90,000 employees and about 11,000 physicians representing all specialties. http://www.kaiserpermanente.org/