HSCA A LEADER IN GROUP HEALTH CARE PURCHASING

Health Services Corporation of America predicts that non-labor health care costs will double by 2008. Group purchasing organizations like Cape Girardeau-based HSCA seem assured of playing important roles as hospitals seek to control costs.

HSCA negotiates agreements between the acute care hospitals and other facilities it represents and vendors that provide all manner of equipment and goods used by the hospitals, including pharmacy, laboratory, medical, surgery, engineering and dietary

HSCA can save a typical mid-sized hospital like St. Francis Medical Center or Southeast Missouri Hospital -- both already members of the organization -- half a million dollars just in the first year, says Earl Norman, HSCA's chief operating officer and chairman of the board.

The fourth-largest GPO in the health care industry, HSCA is headquartered here primarily because founder Norman calls Cape Girardeau home. "I love Cape Girardeau and love living here," he says.

The quality of the region's workforce is another reason the company is here. "It is more and more recognized that Cape Girardeau is the center of a region with a strong work ethic," Norman says, "and we are able to get intelligent people."

He credits Southeast Missouri State University with providing local industries with highly competent workers.

One reason health care costs are continuing to zoom is because the process of acquiring products and getting them to the patient is not very efficient, Norman says. That's where an HSCA component called Synergies Consulting Services comes in. "We are able to design pathways that allow them to remove unnecessary steps in the supply chain," he says.

HSCA also helps reduce redundancies in the system. For example, a patient who needs a sling may be given one at the emergency room, a different one after surgery and another at the doctor's office. HSCA's job is to provide a sling that can be used throughout the system.

In 1991, HSCA established an online catalogue called CD Quick that now lists more than 600,000 line items. Typically, researching and pricing a non-stock takes a member of a hospital staff about half an hour. CD Quick reduces that job to just seconds.

When Norman founded the company that has become HSCA in 1969, the GPO represented 10 hospitals and 1,200 beds. The number is now nearly 800 acute care hospitals in addition to surgery centers, and extended care facilities. It works with 700-800 vendors in all health care disciplines.

Located at 840 S. Mount Auburn Road, HSCA employs 70 people in Cape Girardeau and another 80 people at offices around the country. HSCA hospitals are located in all 50 states. Tom Jamieson, the company's president, also is based in Cape Girardeau. The negotiating office and consulting component are located in St. Louis.

The health care industry generally is not dependent on economic factors, either positive or negative, but many hospitals are in financial trouble these days because government is paying them less than the cost of the care they are providing, Norman says. Managed care programs represent other financial challenges to hospitals, he says.

About 40 million Americans currently have no health insurance. Some of those are young people who don't think they need it, but Norman predicts a change is coming in how health care insurance is funded.

They're now looking at expansion of the insurance currently provided by the federal government," He says. "It will be more private insurance made available. That would make more sense than government providing health care."

HSCA FAST FACTS

HSCA serves 753 acute care hospitals, 202 surgery centers, 595 clinics and 565 other facilities, accounting for 124,647 beds

HSCA has about 12 percent of its market

Amount of annual purchases: $2.5 billion

HSCA has contracts on more than 1 million line items

HSCA employs 70 people in Cape Girardeau