LOCAL GPO FIRM, A NATIONAL LEADER, IN 3RD DECADE

A large grocery store operation will handle from 22,000 to 25,000 items for sale. Multiply that by six and you can start realizing the scope of Health Service Corporation of America (HSCA) as a group purchasing organization (GPO) for the nation's health industry.

"We can provide the health field with a million and a half items," said Earl Norman, board chairman and chief executive officer of HSCA, headquartered at 840 South Mount Auburn Road in Cape Girardeau.

The local firm, which was founded in the late 1960s, is one of the nation's oldest GPOs, and the largest in the healthcare industry, in its third decade of providing group purchasing services for hospitals and health care-related facilities.

"Things are going `gangbusters' for us," said Norman this week. "We're growing. We added some health care facilities last month which added another 11,000 beds to our business."

HSCA now services contracts with more than 1,600 health care facilities 985 acute care hospitals and the rest surgery centers, clinics and extended care facilities representing 150,000 beds in 48 states and the District of Columbia. The only states not currently served by HSCA are Maine and Vermont.

"That's a 20 percent market share," said Norman. "There are a total of 750,000 beds exclusive of state and federal health centers."

The company, with offices in Cape Girardeau, St. Louis, Milwaukee, Wis., Nashville, Tenn., and Richmond, Va., employs about 100 people, 50 of them in the local office.

Tom Jamieson, president of the firm, works out of the Cape Girardeau office.

That's a far cry from the 10 hospitals and 1,200 beds that provided the market for the official opening of Mid-America Shared Services on Feb. 1, 1969.

During the late 1960s, Norman was affiliated with Addressograph-Multigraph Corp., a firm that sold special "charge control" data systems to hospitals.

"At that time, the concept of hospitals joining together to leverage their combined buying power was just beginning to gain acceptance," said Norman. "In order to give a break to the hospitals we were servicing, we combined to purchase the paper for the data systems, and found that we could get it at savings of 78 cents per 1,000 sheets."

Norman recognized the growing need of independent hospitals to group together as a means of lowering their operations costs.

"An administrator at Southeast Missouri Hospital James R. Stricker encouraged me to take on several products, contact more hospitals and start a purchasing group."

As GPOs became more widely accepted in the decade of the 1970s, Norman's business was in a position for growth.

During the early 1980s, the company acquired the Cooperative Purchasing Association of Arizona, Shared Services Corporation ofMontana, and Commodities Purchasing Association of Colorado.

Norman changed the company name to HSCA to reflect both the national scope and the size of the organization.

In 1986, HSCA had become the largest health purchasing company in the U.S., and founded AmeriNet, along with three other groups Hospital Shared Services, Pittsburgh; Intermountain Health Care, Salt Lake City; and Vector Healthsystems, Providence, R.I.

AmeriNet, as the then largest health purchasing firm, represented about 3,000 health care institutions, including 1,800 hospitals.

Norman became president and chief executive of the new organization.

In February of 1990, HSCA announced it was leaving AmeriNet.

"We had some differences of philosophies," said Norman. "I was disappointed in the management styles being adopted by AmeriNet. We had been the largest health care purchasing group before AmeriNet, and we felt we could again become the market leader."

Within 60 days, HSCA had put together a new negotiating team.

"By August of 1990, 90 percent of HSCA facilities and 100 percent of our affiliated groups had signed commitment forms, indicating they would start using our programs and discontinue use of AmeriNet programs.

"In a matter of three months, our HSCA teams had performed a miracle," said Norman. "They constructed our entire portfolio of contracts, involving more than 800 companies. That's a job that normally takes a year."

Norman sees no letup in the health services industry.

"The future looks bright for health care, and for our business," he said. "We think the government will cure a lot of ills in the health care field."

Norman said he fully expects the government to require all businesses to provide health insurance in the future.

"Right now, there are 37 million people out there who have no insurance," he said. "With more of them on group insurance plans, they will want care."

This will result in the need for more health care workers.

HSCA will be lending a hand in providing these workers.

"We recently formed a foundation that is expected to contribute at least $2.5 million for health careers education," said Norman. "HSCA has set aside $250,000 for the Health Careers Foundations, in its first year of operation."

Funds from the Foundation will be used for scholarships and loans to students interested in health careers.

"HSCA anticipates funding the foundation at the same level annually for at least the next 10 years," said Norman.

Scholarships and loans will be available to high school or college students seeking a degree or certificate in health care. However, the program is being offered exclusively to those seeking a career in the allied health professions, not medicine or hospital administration.

HSCA intends to make applications available through its member hospitals. It is also seeking additional funding from vendors.

The one-year scholarships and loans will range from $500 to $3,000.