(FORTUNE Magazine) – Every hospital room is filled with objects that some medical professional decided were necessary--everything from lifesaving medical equipment to syringes and trash cans. "There is an entire profession devoted to figuring out what goes into that room," says Jeff Kleck, CEO of Neoforma, a private Web startup in Santa Clara, Calif. Hospital purchasing agents spend up to 15% of a hospital's total budget on furnishings and equipment; locating and purchasing the items for a new room can take six months.

Kleck hopes his company's Website (neoforma.com) can cut that time by two-thirds. The site is an online catalog for the $150-billion-a-year clinical-products industry; Kleck aims to make it a fully functioning exchange that sells most of the estimated 1.5 million products in this category. To help suppliers whose product information exists only in paper form, Neoforma has 60-odd workers in Bangalore, India (also known as the Silicon Plateau), who will digitize their catalogs for them.

Hospital buyers can search the site by product or by the type of room they are outfitting. They can see floor plans for more than 1,000 rooms at the University of Chicago's Center for Advanced Medicine, one of the country's leading hospitals. Click on a radiology room, for instance, and a list appears of all the items that belong in that room--from magnetic resonance imaging machines to poles for intravenous feeds. Click on a product, and up pop descriptions, pictures, and prices from multiple manufacturers, along with links to their Websites. Kleck equipped the site's search engine with the world's most comprehensive taxonomy for medical products. It understands obscure medical acronyms and knows, for example, that a rigid endoscope is the same thing as an arthroscope (a tube with a tiny camera on its end used in minimally invasive surgery).

Today hospitals and suppliers checking into neoforma.com swap 10,000 to 20,000 e-mails a month about products. Suppliers with limited personnel "are now getting sales leads from customers they did not even know existed," says Kleck. By year-end the site will be a full-fledged e-commerce exchange where hospitals can actually buy products. That's when Neoforma's business will really kick in: it will collect a fee from each transaction. The potential of that revenue stream helped the company recently raise $12 million from Delphi Ventures, Venrock Associates (an investing arm of the Rockefeller family), and other investors.

Kleck, who used to plan nuclear-medicine facilities, which provide radiation treatment for cancer patients, knows that helping hospitals crawl into the Digital Age is a tricky proposition. "Remember," he says, "the health-care industry does not adopt things it does not understand." But by building trust with suppliers and buyers, he hopes to provide the industry with a much-needed panacea: a dose of rationality.

--Erick Schonfeld