We recomment to use the landscape mode of your smartphone
Beta Version

 Creating Europe’s largest 
 Digital Hospital Sourcing Platform  Powered by AI

Our vision is to overcome this imbalance by forming an industry independent digital group purchasing organisation - digital GPO 4.0

Be the corrective by implementing a well organized Concentrated europeanwide hospital demand side equal as the already Existing well structured and highly Concentrated “Big Med tech” Industry supply side

Bridge hospitals & medtech suppliers

Offer first open & closed B2B marketplace - dedicated to support hospital and other healthcare procurers

Why

There is a market failure in the procurement of medical goods. The hospitals as clients and producers of the “product health” operate with low margins (the majority even at a loss) - the BIG MedTech suppliers have the highest profits worldwide – with up to 30-35% profit margins, SMEs – 8-10%.

European Hospitals

International Medical Industry

Infrastructure
Infrastructure
Scattered hospital market, no cross-European coordination of procurement activities ca. 15.000 European hospitals - although the majority is purchased from the same global suppliers over and over again and 80-90% of the products can be forecasted, thus don’t change when ordered.

An example: A senior physician earns after tough studies and a total of 10 years of hard qualification in Germany just about half of that. A nurse less than a quarter.
Infrastructure
Highly concentrated & well-organized - “BIG” MedTech companies. About 30 companies cover 60% of the market volume. With an estimated > 100.000 professionals highly paid, well informed sales force with people in their early thirties already earn up to 200,000 € p.a. Innovative “SME” MedTech companies have great difficulties to assert and position themselves against the US-giants on the markets. read more
Financials
Financials
Growing financial pressure on hospitals. - Consulting firm Accenture called it: An industry that operates in the "red". The Corona pandemic has dramatically worsened the situation. Nearly every government has had to support the hospital sector with billions of €.

Everyone knows what this means: There is no leeway for investments that go beyond what is necessary. The same with the salaries of the administrative employees (incl. procurers) as well as with physicians, nurses and the care. The already existing care shortage will accelerate even more.
Financials
“BIG MedTech” has been generating the highest profit margins in the world for decades, and many of these companies are profiting extremely from the pandemic. An insider recently reported that it's all about shareholder value. We can fully confirm this. read more

They are supported by large consultancies who publish and proclaim online how these high profits can be increased even further - at the expense of European taxpayers and of medical care. read more
Huge European Price Gaps
Huge European Price Gaps
Despite the internet, prices for medical devices are still one of the best kept secrets. In every European country there are up to 300-400% price differences for the exact same medical device.
Huge European Price Gaps
At European level, this is potentiated. Our database compares prices between the cheapest and the most expensive country in Europe revealing a difference of 1000% (10-fold) - for the exact same product. We will release internal European benchmarks shortly. read more
Market Transparency
Market Transparency
In 2014, European hospitals were to be encouraged by the Joint Cross-Border Public Procurement (JCBPP) Act (Directive 2014/24/EU) to tender across national borders. Main objectives: More competition and European price transparency. While this works well in other industries, to date there is not a single project between hospitals read more
Market Transparency
“BIG MedTech” is cleverly circumventing the goals of European tenders. Although hospitals tender EU-wide, only the local subsidiary ever applies - disguised as a mere sales company. Internal transfer prices push profits down to almost zero. European price transparency is circumvented by offering only the country-specific prices. Not the most favorable price in each case. The tendering process is thus led ad absurdem.
Skills & Capabilities
Skills & Capabilities
The purchaser needs to increase skill sets and deepen capabilities to engage with industry on eye level as partners
Skills & Capabilities
They don't really take the buyers seriously. The focus is often still on the medical users. Procurement Managers don’t really exist in their world.
Processes & Systems
Processes & Systems
Lack of standardization, inefficiencies in data and material management, inadequate internal data systems, lack of sophisticated approach to performance management and it tools
Processes & Systems
Very professional data management: Data sovereignty, sophisticated business intelligence tools and structured approach to serve European hospitals
Result
Result
No European market transparency, no purchasing power, no access to European low-price countries for exactly the same products, high prices, high costs for the hospitals.
Result
Full European market transparency, great sales power through an armada of sales representatives, high prices with 80-90% always the same products that do not require detailed explanation, highest profit margins worldwide.

European Hospitals

International Medical Industry

Infrastructure
Infrastructure
Scattered hospital market, no cross-European coordination of procurement activities ca. 15.000 European hospitals - although the majority is purchased from the same global suppliers over and over again and 80-90% of the products can be forecasted, thus don’t change when ordered.

An example: A senior physician earns after tough studies and a total of 10 years of hard qualification in Germany just about half of that. A nurse less than a quarter.
Infrastructure
Highly concentrated & well-organized - “BIG” MedTech companies. About 30 companies cover 60% of the market volume. With an estimated > 100.000 professionals highly paid, well informed sales force with people in their early thirties already earn up to 200,000 € p.a. Innovative “SME” MedTech companies have great difficulties to assert and position themselves against the US-giants on the markets. read more
Financials
Financials
Growing financial pressure on hospitals. - Consulting firm Accenture called it: An industry that operates in the "red". The Corona pandemic has dramatically worsened the situation. Nearly every government has had to support the hospital sector with billions of €.

Everyone knows what this means: There is no leeway for investments that go beyond what is necessary. The same with the salaries of the administrative employees (incl. procurers) as well as with physicians, nurses and the care. The already existing care shortage will accelerate even more.
Financials
“BIG MedTech” has been generating the highest profit margins in the world for decades, and many of these companies are profiting extremely from the pandemic. An insider recently reported that it's all about shareholder value. We can fully confirm this. read more

They are supported by large consultancies who publish and proclaim online how these high profits can be increased even further - at the expense of European taxpayers and of medical care. read more
Huge European Price Gaps
Huge European Price Gaps
Despite the internet, prices for medical devices are still one of the best kept secrets. In every European country there are up to 300-400% price differences for the exact same medical device.
Huge European Price Gaps
At European level, this is potentiated. Our database compares prices between the cheapest and the most expensive country in Europe revealing a difference of 1000% (10-fold) - for the exact same product. We will release internal European benchmarks shortly. read more
Market Transparency
Market Transparency
In 2014, European hospitals were to be encouraged by the Joint Cross-Border Public Procurement (JCBPP) Act (Directive 2014/24/EU) to tender across national borders. Main objectives: More competition and European price transparency. While this works well in other industries, to date there is not a single project between hospitals read more
Market Transparency
“BIG MedTech” is cleverly circumventing the goals of European tenders. Although hospitals tender EU-wide, only the local subsidiary ever applies - disguised as a mere sales company. Internal transfer prices push profits down to almost zero. European price transparency is circumvented by offering only the country-specific prices. Not the most favorable price in each case. The tendering process is thus led ad absurdem.
Skills & Capabilities
Skills & Capabilities
The purchaser needs to increase skill sets and deepen capabilities to engage with industry on eye level as partners
Skills & Capabilities
They don't really take the buyers seriously. The focus is often still on the medical users. Procurement Managers don’t really exist in their world.
Processes & Systems
Processes & Systems
Lack of standardization, inefficiencies in data and material management, inadequate internal data systems, lack of sophisticated approach to performance management and it tools
Processes & Systems
Very professional data management: Data sovereignty, sophisticated business intelligence tools and structured approach to serve European hospitals
Result
Result
No European market transparency, no purchasing power, no access to European low-price countries for exactly the same products, high prices, high costs for the hospitals.
Result
Full European market transparency, great sales power through an armada of sales representatives, high prices with 80-90% always the same products that do not require detailed explanation, highest profit margins worldwide.

Conclusions:

IN TERMS OF DISTRIBUTION AND NON-TRANSPARENCY IN PRICES THE “BIG MEDTECH” BEHAVIOR IS COMPARABLE TO OTHER MONOPOLY-LIKE STRUCTURES. THIS IS THE BASIS TO DISRUPT THESE SALES CHANNELS OF „BIG MEDTECH“ WITH THE METHODS OF THE PLATFORM ECONOMY.

What

Improving procurement approaches to enable hospitals lowering costs while increasing quality

We are the corrective
and close the gap trough

Benefits for European Hospital

  • Become part of a European strategic buyers Alliance
  • By using our European price database: Access to best prices in the European market
  • Data insights & 1:1 comparisons through curated medical product database at your fingertip
  • Leverage joint cross-border procurement
  • For public hospitals: Easy access to pan-European public tenders via our digital tendering platform - of course 100% in compliance with EU tendering laws. Avoiding the following effect: Your tender EU 27-wide receiving only offers from the respective domestic subsidiaries of international suppliers.
  • Access to vendor neutral parameters/product criterias
  • Strengthens collaboration and broadens expertise for informed conversation with stakeholders (e.g. physicians)
  • European full market/product transparency
  • European buying power against “BIG MedTech” industry → for public hospitals via our EU-tender law compliant digital procurement platform

    In accordance with the European Commission Joint Cross-Border Public Procurement Act (JCBPP Directive 2014/24/EU) read more
  • sustainabilty by digitalization of the procurement value chain

Benefits for International Med. Industry

  • Become part of a European strategic supplier Alliance
  • Easy and cost effective access to European hospitals for Small &Medium Enterprises (SME) - also from outside the EU.
  • Approach us actively: According to your wishes, we actively carry out an EU-wide tender for you or your products on our digital platform within our hospital network.
  • For BIG MedTech: Reduction of the biggest cost factor - the very expensive sales organization which is 2-3 times more expensive than manufacturing and R&D read more “The Milkmen in a Megastore”
  • Avoid early on the mistakes that other industries have made (e.g. automotive, tourism, media, consumer electronics, fashion, music streaming, banking) - with the result that suddenly other billion dollar tech companies emerge as new competitors.
  • Especially for suppliers on the German market: With us, you can return to the path of legal, EU-law compliant procurement. What the commercial German purchasing groups does not comply with the procurement laws and is therefore illegal.

Our approach: The reverse auction principle

EU-wide sourcing based on „reverse auction“
Goal: more projects, more volume, better prices over time – for all participants – also backdated. Powered by technology.

  • Each project starts country specific
  • As a result, continuously declining prices at a low level can be achieved for all platform participants over time
  • Of course, it is our goal to reach the price level of the cheapest European countries
  • We achieve this “best European price” by gradually bundling the market power from the individual countries onto our platform
  • If we have the necessary buyer power against industry, prices will be inherited not only by country but also by “best European price”

No. of Purchasing Projects / Hospital

4-step process:

Your participation to access “best European prices” while increasing transparency & transforming your procurement processes into a connected & digitalized value supply chain

1

Kick-Off

Run spend analysis & review performance management to identify realistic savings for your hospital Tracking status quo & identifying potential substitutes:
  • Costs
  • Analytics capabilities
  • Processes & risk management
2

Platform strategy

Defining your best path to achieve optimal outcomes and gain insights by increasing efficiency through pan-European networking effects Establish structured sourcing process and performance management (e.g. demand management, vendor consolidation)
3

Onboarding

Process to integrate your hospital into our B2B European Procurement Trading Platform.
  • Implementation of analytics & digital procurement processes
  • Staff Training
  • Realization of your savings potential
4

Continuous evaluation

Monitoring on how to ensure
  • Cost optimization
  • Skills enhancement
  • Risk assessments

Our platform is powered by:

Big Data Analytics

AI & Machine Learning Data Processing

Ready for Block Chain based Process Automation

EU GDPR standards by design

Just as revolutionary as the approach of a central European procurement platform for medical devices, just as revolutionary is our business model.

First of all: What we don´t do:

  • We do not receive any commission from the industry, as they are dependent on turnover.
  • Such a business model of marketplaces that work according to this method has the consequence that this would lead to the absurd situation, the higher the price for the hospital, the higher the sales for the industry, the higher the commission for us.
  • This has nothing to do with representing the interests of hospital purchasers. These models support the med industry, which wants to try out new distribution channels at low cost. Once again, hospitals are expected to bear the risks, and once again BIG MedTech wants to generate high profits.
  • Such business models lead to
    • a dependency on the one who pays: the medical industry. We strictly reject this !
    • the fact that the commission paid by the industry is added to the price for the hospital beforehand. We strictly reject this !

What we do:

  • We buy the medical goods on our account and sell them on to our customers via our fully digitalized trading platform.
  • For public hospitals: We carry out EU-compliant public tenders on behalf of our public hospital clients - fully digitalized via our digital tender platform. The actual settlement then takes place via the trading platform.
  • We determine the resulting savings and receive the agreed percentage of the savings from our customers.
  • As a result this means:
    • The higher the savings for our customers, the higher our commission.
    • There is 100% equality of interest and 100% price transparency between our customers and us.
    • Since we do not receive any commissions from the industry, we can act completely independently – this is core to our activities and of utmost importance to us

Why We mainly focus on hospitals because

1. ... we are very familiar with European hospital purchasing since decades - this is our "home turf"

2. ... we have built the largest European hospital & healthcare purchasing ecosystem in the last two years Ecosystem Partners

3. ... all characteristics cry out for disruption. That results in reorganizing this market, which has not changed for decades despite the "Internet Platform Economy".

The Medical Devices submarket is characterized by:

Asymmetric supply and demand sides lead to paradox cost/profit relations. At the burden of the European hospitals and the taxpayers.

See Johnson&Johnson Q1/2021 financial results as an example:
  • 22,3 bn $ sales/7,4 bn $ op. profit (33%)
  • Gross Profit (68%)
  • 7 bn $ production costs (31%)
  • 5,4 bn $ selling, etc (24%)- almost as high as production costs. 3-5 fold more expensive than in other industries – almost twice as high as R&D spendings
  • 3,2 bn $ R&D(14%) – not quite half of selling costs
  • Effective Tax Rate: 16,5%
There are a lot of other markets with asymmetric supply and demand structures.

e.g. consumer electronics, sporting goods, food, toys, where a few BIG companies dominate the World/European markets.

The difference: to prevent these multinationals from dictating prices at will, there are usually Group Purchasing Associations (GPO) (read more) or large retail chains that act as a corrective or regulator for the consumer.

This usually leads to fierce price competition in favour of the consumer and, as a consequence, to justifiable single-digit/low double-digit margins for the manufacturers.

This is not the case with medical devices and equipment. The medical GPO´s or Medical Internet Marketplaces that exist here (read more) get their money from the medical industry.

This would lead to the absurd situation, the higher the sales price for the industry, the higher the commission for the GPO the Medical Market Place, the higher the costs for the hospital.
Recurring, similar orders (80-90%) with high volumes easy to process digitally, hardly any product requires explanation once they have been introduced
Due to extreme concentration on the supply side: sameness of products
The high gross profits of over 70-75% % mean relatively low manufacturing costs of under 25-30%.

The biggest fixed cost block is sales - 3-5 times higher than in other industries (see more). Add to this R&D costs: total 40-45%.

To reduce this fixed cost block relatively, these costs have to be allocated to the single device. The percentage share decreases with the number of units.

This is the reason why BIG MEDTECH is so extremely turnover-fixated – or top-line oriented.

This is also the reason why these distribution costs can be extremely reduced with the corresponding Europe-wide bundling of demand.

If the pure production costs were much higher, no significant price advantages could be achieved even with the Internet platform economy.
The med industry is dominated by non-EU companies. Which does not create any jobs worth mentioning. Apart from a few highly paid managers and sales people (link to ..)
On the other hand, the savings will benefit millions of EU citizens, as chronically underfunded hospitals will regain more financial leeway.
Hospitals are also the central healthcare facilities of any country. They enjoy high political backing. Also at EU level. Such an initiative receives a great deal of political support.

How to implement the fully digital procurement landscape in your Hospital

Step 1

Analysis

Step 2

Strategy

Step 3

Easy & Fast Onboarding

Step 4

Sustainable Purchasing

Step 5

Controlling

Hospital Level

Data Gathering & Analysis read more

Digital Sourcing Platform Level

Output

Potential Identification & Analysis with recommendation

Hospital Level

Strategic approach & Decision-making by the hospital: Yes or No.

If yes:
  1. Agreement on which products to start with.
  2. Starting deep dive discussion with doctors/medical users read more
If No: The hospital does not incur any costs – Termination.

Digital Sourcing Platform Level

read more
  • Substitution database (> 10 MIO ITEMS)
  • Collaborative assessment (digital negotiation)
  • Creating tender specifications for Medical Users

Output

Realistic Savings forecast

Hospital Level

  • To quickly achieve savings with products that are already on the XMED iQ platform, a fast onboarding takes place
  • The other products will then be added one by one

Digital Sourcing Platform Level

Output

Realize „quick win“ savings

Hospital Level

  • Fully digitalized procurement process read more

Digital Sourcing Platform Level

Output

Guaranteed Supply – no hidden price increases

Hospital Level

  • Fully digitalized spend analytics - quarterly reports
  • Ongoing recommendations for savings opportunities
  • Monitoring of the agreements with the medical users

Digital Sourcing Platform Level

read more
  • Purchase controlling
  • Spend analytics
  • Contract management

Output

Lasting saving – basis for ongoing cost reductions

Who we are

Having seen the extreme differences in procurement of medical supplies in hospitals across Europe and beyond the other paradoxes described in detail, across Europe when it comes to the purchase of medical goods, we have taken the decision to make our knowledge accessible to a broader community. Combination of tech and ecosystem builder.

Therefore we have transformed our successful 15 year industry independent procurement consulting approach where we could only support a selected number of hospitals throughout the year into a digital platform to ensure a broader access to that information in order to reshape our hospital‘s financial “health status” together.

  • >100 years of consulting experience
  • approx. 200 procurement projects in the last 10 years
  • > 20-60% permanent savings p.a. achieved
  • 10 European countries covered (public & private sector)

C-Level Management

Elisa Frenz

Chief Digital Officer

Christoph Hölzlwimmer

Chief Investment Officer

Dr. Markus Maucher

Chief Data Engineering

Dieter Zocholl

Founder & Chief Executive Officer

Supervisory Board

Praful Mehta

CEO Vamstar

Information

©2021 Innoloft GmbH