A Medical Device Daily

Group purchasing organizations Consorta (Schaumburg, Illinois) and HealthTrust Purchasing Group (Brentwood, Tennessee) last week reported that they have signed a letter of intent to establish Consorta as HealthTrust’s sixth equity partner.

“Consorta had a record-breaking year in 2006 and we are excited to start 2007 announcing plans to partner with HealthTrust Purchasing Group,” said John Strong, president/CEO of Consorta. “We conducted thorough due diligence to align with the right partner, and it was clear that HealthTrust would be the best fit with our mission, culture and patient focus moving forward. The economic benefit is very compelling, and we are excited about combining our resources to offer increased cost savings and value to our members, now and well into the future.”

The combination, expected to close by Feb. 28, will create one of the country’s largest group purchasing organizations, with more than $13 billion in combined volume. Consorta said it expects the transaction to yield current and future cost savings of $535 million for shareholders and members.

Following the transaction, Consorta will remain an independent organization, serving as its shareholders’ voice on the HealthTrust board of advisors. Consorta shareholders and members will become members of HealthTrust. Consorta will help recruit new HealthTrust members, provide educational and analytical programs and manage member compliance.

Once the combination is finalized, Consorta said it expects to reduce its Schaumburg headquarters over a period of 18 months. Consorta’s board of directors and senior management is expected to remain in their current positions in support of their shareholders.

The two organizations joined in 2005 with other industry leaders to form the Healthcare Group Purchasing Industry Initiative, an organization created to monitor and promote best ethical and business practices within the industry. The Initiative now has nine members, functioning as a resource, it says, “for best practices in compliance and transparency.”