VHA Regional Networks Pursuing New Group Purchasing Model; Four Regional Projects Have Saved a Combined $46 Million
IRVING, Texas, Nov. 10 /PRNewswire/ -- Six hospitals in the Midwest, ranging in size from 25 beds to 576 beds, have set aside their competitive priorities to participate in a regional program to standardize their supply purchases to save more money. To date, the hospitals have achieved more than $14.4 million in supply savings, a 3 to 1 return for their participation in this venture. VHA Inc., the national health care alliance, is helping its member hospitals increase efficiency and reduce supply costs by creating these regionally-focused purchasing programs. VHA serves more than 2,200 health care organizations nationwide, including 1,400 hospitals. It has 18 regional offices, and it is using these regional offices as hubs to create networks of members that will focus on supply standardization. "These health care organizations aren't simply asking suppliers for more savings, they are committing people and time to examine their clinical practices and working with the suppliers to develop business cases for standardization. That's very sophisticated work," said Scott Downing, senior vice president of integrated supply chain services for VHA. "Regional efforts like these may lead to shifts in traditional group purchasing practice." VHA members that have participated in these regional standardization programs have realized a combined savings of more than $46 million to date. VHA has offered regional purchasing options to members since 1997, after recognizing that member hospitals were demanding more creative avenues to attain better pricing with greater flexibility at the local and regional levels. VHA offers regional programs to hospitals in the Midwest, Southeast, Southwest and East Coast. The alliance is currently working with hospitals in Illinois, Colorado, and Oklahoma to develop regional programs in those states. In Florida and Georgia, VHA offers a program called Supply Cost Management Partners (SCMP). Participation in the program enables member hospitals to maximize the benefits of the VHA supply portfolio, as well as join in on new opportunities that enhance purchasing options. These hospitals have realized a combined savings of $12 million since beginning the project in 1997. VHA member hospitals in Texas and New Mexico began their own regional products standardization initiative in the fall of 2003. The group has identified savings of more than $6.5 million. VHA members in the East Coast region, encompassing New Jersey and the eastern part of Pennsylvania, have the opportunity to participate in more targeted regional standardization programs. Regional efforts began in 1999 with the creation of a pharmacy distribution initiative that realized almost $4 million in savings over three years. When combined with the projected savings for the current agreement, the pharmacy distribution initiative should exceed $14 million in savings by 2008. Seventeen VHA member hospitals in the East Coast region have also come together to leverage their buying power to obtain better prices on cardiology products. The group is currently evaluating pricing structures in their area to negotiate better local terms. In addition, East Coast member hospitals are coordinating purchasing efforts for other products with other hospitals to achieve the highest discounts available on agreements. 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. Through the cooperative, members benefit from resources to help them identify, integrate and implement best practices to improve clinical, operational and financial performance. 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 row. For more information, go to http://www.vha.com . Contact: Lynn Gentry Veronica Hunt 972/830-0798 310/658-5380 firstname.lastname@example.org email@example.com
SOURCE VHA Inc.
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