Surgical Implant Services (SIS) will establish independent, locally owned physician companies (Local Specialty LLCs) in multiple markets and with various specialists for the purpose of standardizing implant usage, cost-reduction to participating hospitals, clinical outcomes surveillance, and education.

The objective of this business model is to provide hospital systems with competitive, predictable pricing at levels that are not attainable in the current business model. These Local Specialty LLCs will become members and minority owners of one of several integrated, specialty-specific national group purchasing organizations (GPOs). The Specialty LLCs will receive distributions as returns on their investment in the GPOs.

Advisory panels are to be constituted in each Specialty LLC to evaluate implant product lines and specific manufacturers. Each of these panels will consist of physician owners who will be charged with making recommendations of clinically acceptable product lines for use by the member physicians. In addition, subsequent responsibilities may include the following: clinical outcome data collection and analysis, cost assessment, new product development, market analysis, education and research, etc.

The process of competitive bidding among the comparable suppliers by the GPO will allow the selection of one or two vendors, and it is anticipated that preferred pricing can be obtained by concentration of market share over a limited number of suppliers in contrast to the current system for that local market.