University HealthSystem Consortium Helps Member Hospitals Achieve Record Supply Chain Savings of $261 Million in 2010

Price Leadership and Data-Driven Analytics Drive Savings and Performance Improvement

Mar 02, 2011, 09:33 ET from University HealthSystem Consortium

OAK BROOK, Ill., March 2, 2011 /PRNewswire/ -- The University HealthSystem Consortium (UHC) announced today that its member academic medical centers achieved record supply chain savings and value of $261 million in 2010.  The savings amount represents 3.7% of UHC members' record aggregated spend of $7 billion and includes cash returns as well as operational savings.

UHC's Supply Chain program distributed $111 million in cash to members through their participation in Novation, UHC's supply contracting company. In addition, UHC members documented operational savings of $150 million, which surpassed projections.  This achievement was a result of UHC's assistance with clinical preference items, improvements in supply utilization, as well as Novation's focus on continuous contract price improvement, price protection, and new contracts. As the largest group purchasing organization in the United States, Novation's aggregated buying power provides economies of scale that lower cost and provide a high return to participants.  

"UHC's academic medical center members have extensive needs for medical products and services to support complex patient care. After labor costs, supplies are the next largest expense for these organizations," said Roberta Graham, executive vice president. "The growth in UHC members' spend signifies their recognition of the savings opportunities and overall value provided by UHC and Novation."

UHC's programs, tools and resources help participating hospitals optimize supply chain efficiency.  Its unique data integration ties together operational, supply chain and clinical data, giving hospitals enterprise-wide spend visibility.  SpendLINK™, UHC's spend analytics tool, helps to identify savings opportunities and provides actionable information for achieving sustainable cost reduction across the supply chain continuum.

"We are very pleased to continue providing industry leading competitive pricing and savings opportunities for our members, particularly during a time of economic strain and capital squeeze," said Jake Groenewold, UHC senior vice president, Supply Chain. "It is part of our strategic vision to help members attain national leadership in health care by achieving excellence in quality, safety, and cost-effectiveness," he added.

About UHC

The University HealthSystem Consortium (UHC), formed in 1984, is an alliance of 112 academic medical centers and 256 of their affiliated hospitals, representing approximately 90% of the nation's nonprofit academic medical centers. UHC offers its members specific programs and services to improve clinical, operational, financial, and patient safety performance. The mission of UHC is to create knowledge, foster collaboration, and promote change to help members succeed. For more information, visit

About Novation

Founded in 1998, Novation is the leading health care supply contracting company for more than 25,000 members of VHA Inc. and the University HealthSystem Consortium (UHC), two national health care alliances, and 5,500 members of Provista, LLC, representing 28,000 sites. Novation provides alliance members contract and price management and spend management services. Based in Irving, Texas, Novation develops and manages competitive contracts with more than 600 suppliers. VHA, UHC and Provista members used Novation contracts to purchase nearly $40 billion in 2010.

SOURCE University HealthSystem Consortium