VHA Helping Area Hospitals Save $14 Million in Pharmacy Costs; Additional Savings Projected in Cardiology and Capital Equipment

Nov 30, 2004, 00:00 ET from VHA Inc.

    BERWYN, Pa., Nov. 30 /PRNewswire/ -- In an environment where hospitals
 seem to always be competing, VHA Inc. is bringing its member hospitals
 together to reduce health care costs.  As the country's leading health care
 supply chain management organization, VHA helps its members improve clinical
 and supply chain performance and works with members in specific regions to
 leverage their combined purchasing power to gain additional savings.
     These savings have a big impact on a hospital's bottom line, since
 pharmacy costs are one of the top three expense categories as far as supply
 utilization.  For example, VHA members in eastern Pennsylvania and New Jersey
 agreed to pursue a common distribution strategy for pharmacy products, and
 they project to save $14 million in pharmacy costs over an eight-year period.
     "VHA is helping hospitals, nationwide, reduce pharmacy costs without
 sacrificing quality," said Kathy Blandford, senior vice president and
 executive officer of the VHA East Coast region.  "Hospitals in this region are
 collaborating on their greatest needs and securing more tailored contracts,
 which may lead to a new trend in hospital group purchasing and a greater
 emphasis on regional contracting for products."
     VHA serves more than 2,200 health care organizations nationwide, including
 1,400 hospitals.  The East Coast office, located in Berwyn, Pa., is one of
 18 regional offices that VHA uses as hubs to create networks of members to
 focus on clinical and operational improvement opportunities, such as supply
     Regional efforts began in 1999, when VHA created new distribution
 agreements for its East Coast members that would help add additional savings
 on distribution services.  VHA members access these savings by using supply
 contracts created by Novation, VHA's supply chain company.  The first regional
 three-year pharmacy agreement saved more than $4 million.  The current
 distribution agreement shows more than $2 million in savings per year, and the
 overall savings for the two pharmacy agreements should exceed more than
 $14 million.
     VHA members in the East Coast region, which includes more than
 20 hospitals in eastern Pennsylvania and New Jersey, purchased $170 million in
 pharmacy products last year.  By leveraging this purchasing power, they also
 were able to obtain savings on pharmacy robotics, technology such as bar-code
 reading devices, asset management programs and an indigent care reimbursement
 pilot program.
     In addition to working with VHA to reduce pharmacy costs, VHA East Coast
 members are working on two other high cost areas -- cardiology and capital
 equipment.  Last year, VHA began collecting data from members in Pennsylvania
 and New Jersey regarding cardiology purchases in an effort to identify
 opportunities for standardization.  VHA provided members with education and
 tools to help them understand the competitiveness of their current pricing
 and, in the future, will work to provide regionally standardized contracts for
 cardiology equipment.
     Working with member hospitals, VHA identified patient beds as another
 potential target for standardization.  By working with other VHA regions up
 and down the East Coast, the VHA members in Pennsylvania and New Jersey
 reached the highest-level discount available on patient beds.  VHA plans to
 negotiate similar capital equipment agreements in the future for its members.
     To learn more about how VHA is helping hospitals save money through
 regionally standardized contracts, visit http://www.vha.com .
     About VHA -- VHA Inc. is a national cooperative of leading not-for-profit
 health care organizations that work together to improve the health of the
 communities they serve.  VHA leverages the collective strength of the
 membership to improve clinical, operational and financial performance.
 Through the VHA cooperative, members benefit from resources that assess
 critical needs and identify best practices to create customized solutions that
 lower costs and improve clinical quality.  As a cooperative, VHA distributes
 income annually to members based on their participation.  Based in Irving,
 Texas, with 18 offices across the U.S., VHA was named one of the "100 Best
 Companies to Work For" by Fortune in January 2004, for the fifth year in a
      Contact:  Lynn Gentry                Courtney Ware
                972/830-0798               804/675-8168
                lgentry@vha.com            cware@crtpr.com