UPMC and CombineNet Forge Joint Venture to Streamline Healthcare Sourcing

PITTSBURGH, PA—January 23, 2006

The University of Pittsburgh Medical Center (UPMC) and CombineNet have formed a joint venture, CombineMed, to lower costs and boost quality and innovation in healthcare sourcing. The partners will commercialize a computerized sourcing model called Expressive Commerce, which directly connects suppliers of pharmaceuticals and medical/surgical equipment with healthcare providers to allow for more efficient negotiations. In the inaugural Expressive Commerce event, starting in late January, UPMC and two other medical centers will use the system to purchase more than $1 billion in medical supplies.

As a leader and innovator in health care, UPMC is constantly evaluating technologies and practices that bring excellence to our clinical and administrative operations," said Chuck Bogosta, managing director of UPMC'S office of Strategic Business Initiatives. "Our joint venture with CombineNet is a key part of our strategy to modernize the healthcare supply chain, cut costs and, most importantly, deliver better care to our patients."

In Expressive Commerce, suppliers can submit any number of Expressive Proposals via a secure Website. Expressive Proposals are seller-prescribed, sealed proposals that are creative in nature and can include conditional facets like volume and market-share based discounts and rebates, differing payment terms, package offers, and substitute items. The process accelerates innovation transfer by strengthening collaboration between buyers and sellers in the supply chain. The process improves innovation by creating efficiencies that not only allow suppliers to express what they do best, but allow buyers to evaluate such offers taking full account of their operating policies and procedures. With unprecedented speed and accuracy, Healthcare providers use CombineNet's powerful combinatorial optimization engine to model all of their business constraints and choose the best array of goods and services to match their needs and preferences.

Across many major industries, our solutions have been heralded as the way industry wants to do business," said Tom Finn, former Executive Vice President of CombineNet and President of the new Pittsburgh-based venture. "We are ushering in a new era in healthcare supply network management that will improve patient care while helping to mitigate rising costs. We all benefit."

About Expressive Commerce

Expressive Commerce enables suppliers to differentiate themselves on the basis of their strengths and provide multiple offers that make the most sense for their business. Expressive Commerce begins with a flexible framework that allows both supply and demand to be expressed in dramatically more detail than previous technology-enabled sourcing methods. Buyers are free to articulate needs and requirements rather than lock onto specific products and the result is a system that eliminates contention and replaces it with collaboration.

Expressive Commerce is a product of a Joint Venture between the University of Pittsburgh Medical Center (UPMC) and CombineNet to create a solution for sourcing in the healthcare industry. The limited liability partnership formed between UPMC and CombineNet is called CombineMed. For more information on Expressive Commerce and the inaugural Expressive Commerce event, please visit www.expressivecommerce.com.

Healthcare Partners Participating in January Event

Two other leading healthcare organizations will participate independently in January's inaugural Expressive Commerce event to create the $1 billion spendthe Charleston Area Medical Center (CAMC) in Charleston, West Virginia and in Seattle, Washington, the Northwest Hospital and Medical Center (NWHMC).

About CombineNet

CombineNet, the advanced sourcing technology company, helps companies achieve the absolute best value and lowest total cost of ownership for goods and services. CombineNet's Advanced Sourcing Application Platform enables companies to engage in Expressive Commerce™, the strategic sourcing initiative that allows buyers and sellers to communicate supply and demand more expressively, collaboratively and strategically. The result is a win-win for both buyer and supplier, where greater innovation and efficiency are driven into the supply chain. CombineNet's ASAP consistently produces 10, 15, even 20 percent greater actual cost savings than other e-sourcing solutions, and has delivered more than 45x ROI for the largest businesses in the world including General Mills, PepsiCo, Procter & Gamble, Siemens and others. For more information, visit www.combinenet.com.

About UPMC and SBI

The University of Pittsburgh Medical Center is the largest integrated healthcare system in Pennsylvania and one of the leading nonprofit medical centers in the country. A $5.8 billion, 40,000-employee organization, UPMC is the largest employer in western Pennsylvania. It spans the full spectrum of health care delivery with its network of 19 tertiary, specialty and community hospitals and 400 outpatient sites and doctors' offices. It is also the largest provider of independent living, assisted living and skilled nursing options in the region with 14 freestanding retirement and long-term care facilities.

The Office of Strategic Business Initiatives was created last year to help find and nurture entrepreneurial companies that can build on UPMC's strengths in clinical care and health care management. SBI's goals are twofold: to fuel economic growth in western Pennsylvania and to provide new revenue for the support of UPMC's core medical missionthe delivery of the very best healthcare for its patients.

Media Contacts:

Greg Holt
CombineNet Inc.
Director of Marketing
Phone: 412.471.8200
gholt@combinenet.com