Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Charles Strauzer – CJS Securities.
Charles Strauzer – CJS Securities
A couple of questions, if we can talk a little bit more Joe about the Novation deal and maybe shed a little bit more light on the potential kind of long term opportunity there from a revenue standpoint if you can? And also, are there other types of contracts like this out there in your competitors hands that maybe over time you could be successful in kind of garnering this away.
Joseph P. Morgan, Jr.
The opportunity there is greater than $50 million in overall spend. Candidly it’s a bit of a fishing license, by winning this contract it gives us an opportunity by being on the contract to do what we do so the opportunity is sizeable. To give you an example, in one relatively short time, several days, we were able to contact approximately 2,000 institutions and start to present our capability to them so it is a sizeable opportunity. Projecting it specifically is challenging but just to give you some idea as to the opportunity, it represents the potential of 20% of the current unit in healthcare just as we currently focus on it.
In terms of other opportunities, if you look at our market share today in healthcare, acute care health around documents that we provide, we have a market share that’s below 25%. So, by definition there is an opportunity that is pretty sizeable. The best way to approach that is there is one way to do it which would be one hospital at a time, another way would be through organizations that are aggregated. The GPOs are one way, we have all six of those so that’s given us a great opportunity, there’s still a sizeable market that is not part of those contracts and so there are larger buying groups IDMs and all that have many hospitals that we would also be focusing on.
I would also tell you that there are tangential opportunities in similar markets but not exactly the same. For example, in managed care and assisted living where we’re also pursuing some opportunities. So, I think the key to focus on honestly would be there is a large opportunity with this largest GPO no question but then also from a relative standpoint our market share is not greater than 50 so we’re less than 25 so there’s a substantial runway for us as we go forward.
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