what we call “unproductive disruption,” the space where the technology, processes, and infrastructure and other environmental factors are not yet in place to make the vision a reality. At the other extreme, more conservative approaches by single manufacturers attempting to use their proprietary websites as a competitive advantage were too close to the status quo, offering no meaningful progress for the industry. Doing nothing risked leaving a market opening for a third party to enter and dictate how the industry would interact with its customers—also not a good option.
That was the edge of disruption upon which GHX was founded—somewhere between the hyperbole of the internet startup mania and the industry status quo. To avoid duplicating e-commerce investments and third-party disintermediation, which would worsen already spiraling healthcare-system costs, five competitive manufacturers created a digital data exchange that would benefit the industry.
GHX has successfully become the obvious choice for much of its industry. It grew from a first-year target of $20 million in transactions annually flowing through its exchange to more than $60 billion annually today, with its systems handling more than 168 million transactions per year. Ironically, some people who in 2000 were, at best, avoiding being involved with GHX now like to fondly remember their early support for it, revising history a bit in the process! As an example of the shift that has occurred since the company’s launch, Bruce noted that one of the early companies on the exchange back in 2001 took the minimum possible steps to be on it, sharing only very hesitantly and incrementally out of a fear of losing control of its data and contracts. Today it is one of the most active and vibrant members of the exchange, using its supply chain offering as a differentiator. It was tough at times, but GHX brought customers along to the edge of disruption with them. In doing so, GHX provided those customers with their own path to becoming the obvious choice for their customers.
With more than 417,000 unique trading partner pairs connected to the exchange, 22,000 healthcare facilities, and 85 percent of medical/surgical products represented by integrated GHX suppliers, the company is thriving. With metrics like that, GHX clearly has a track record in delivering from the healthcare industry’s edge of disruption, providing more value, and as a result becoming the obvious choice for the suppliers and providers they serve. Even more, it delivers to both sides of the market—suppliers and providers. As Bruce Johnson told us in our interview with him, the ability of GHX to provide solutions that work across the supply chain gives the company an elevated perspective about what will advance the industry as a whole, rather than simply helping one side to win over the other.
“Defining your edge of disruption should be driven by the question, What are the problems we are uniquely positioned to solve with a scalable solution?”
As GHX has learned what matters most to its customers and worked to deliver it, its elevated impact has pushed the industry into new potential edges of disruption, in the process opening up new opportunity for GHX to create more value. As we mentioned in the introduction, GHX has now tackled several edges of disruption. As Bruce explained to us, “Defining your edge of disruption should be driven by the question, What are the problems we are uniquely positioned to solve with a scalable solution?” As GHX grew, so, too, did its unique ability to solve problems that spanned multiple industry players—an ability supported by its engagement with both suppliers and providers.
It is worth pausing to consider the word “unique,” and it’s one to think about as you pursue your own edge of disruption. Keep in mind that one qualifier for “unique” may simply be that you are willing to take on a challenge where others are not. That shouldn’t be your only qualifier, but it can be a powerful one. “Scalable” is another word that jumps out. Can you envision a solution where you can get to enough scale to have a reasonable impact? Remember that scale is relative—if you are in consumer products, it might mean millions of buyers in an off year, whereas if you are in the business of customizing jets like the 787 Dreamliner, it might mean dozens of buyers in a good year. Regardless of your market’s actual size, “scalable” means you can address enough of it with your solution for it to matter.
Coming back to GHX, the company gained momentum in the market during its first decade, working through startup mode to stabilize itself and grow. In the process, it built up its ability to discover new edges of disruption that leveraged its unique capabilities, including its aptitude for standing in the center of a complex and often contentious environment, between competitors, providers, suppliers, distributors, and others. The team learned to see its inherent neutrality not as a limiter but as a distinguisher in terms of problems it is uniquely able to solve. As it solved for and scaled the first edge of disruption it was charted to deliver, the ability to have e-commerce between suppliers and providers, they quickly moved on to more ambitious edges. And as we mentioned earlier, GHX more recently has taken on leading the industry in defining the solution for documenting implantables used in patient care. We’ll be getting deeper into that, together with advances it has made in tracking pharmaceuticals, in Chapter 2, “Learn.” Given how often the company has done it, defining new edges of disruption is almost a core competency of GHX!
In any edge of disruption it defines, GHX looks for the challenge that matters most to the suppliers and providers that use the exchange, and to the broader population—including you as a potential patient. You might be wondering how all of this work on electronic data interchange could be relevant to you. Isn’t it really just about suppliers getting paid faster and providers getting more accurate billing? What does it have to do with patient outcomes or your experience at the doctor?
Consider this. Imagine you are at the doctor’s office, and you have a latex allergy. With interoperable systems sharing accurate data about product descriptions, it is possible for your electronic medical record to be matched to the inventory being used for your doctor’s visit. This could help ensure that the nurse setting up the tray is flagged to pull the right latex-free gloves from inventory and confirm that they are being used during all aspects of your treatment. Without accurate supply data, your risk of coming in contact with latex is exponentially higher. Clearly, the work that GHX and others in the supply chain do influences not just the flow of money but also the quality of care patients receive. Because of GHX’s ability to scale solutions to inventory problems, the edges of disruption it tackles deliver against all of the Triple Aim goals, not just cost containment.
Developing an elevated perspective about the right edge of disruption is critical to success. In a space where trust between industry participants was a major barrier, GHX had to learn to navigate among its competitors, customers, and customers’ customers. Through the trust it has earned, the results delivered, and the value created, GHX has been able to anchor itself as a neutral arbitrator of industry solutions that require broad participation and support to deliver. This position enables GHX to drive solutions across the industry for even more complex challenges—the ones that matter more—like the ability to track and trace implantables. That’s a perfect edge of disruption for GHX to address, because the company has unique access to data, people, and the market to challenge industry assumptions, think optimistically about how to solve problems, and ask the yet unanswered questions about crafting a full solution.
You might be thinking that healthcare is so rich in opportunity that it is easy to find a “good” edge of disruption there and run with it—who wouldn’t want to solve for something like tracking implantables? But let’s think about that differently. Step back and consider some of the different edges of disruption available in healthcare. Consider for a moment that it is unlikely that GHX or its clients would benefit from GHX developing, for instance, a nuanced and in-depth perspective on the cost of medical education that synthesized all of the current issues in a credentialed and meaningful way. Could GHX do that? Probably. There are a lot of smart people working there who could direct attention to it. Would GHX working on this issue drive significant outcomes in terms of positive change in solving the problem, or in advancing the GHX core strategy, or that of its customers? Unlikely. Is GHX uniquely placed to have a meaningful and sustainable position on the issues
